FACT – Medicare fraud costs taxpayers roughly $60 billion a year.

FACT – The government pays tens of million dollars annually to contractors to detect Medicare fraud.

FACT – Whatever the health officials are doing in an attempt to stop Medicare fraud is not enough.

Attempts to Stop Medicare Fraud

A report, not yet issued by the Department of Health and Human Services (but obtained by the Associated Press before its official release), accentuates this very point.  Problems with fraud contractors and proper supervision were apparent 10 years ago, and despite efforts to fix them, many of the same issues persist today. Why? In a nutshell, ineffective management of the resources dedicated and required to address the problem.

Lack of Access to Medicare Data

Contractors are hired to detect fraudulent behavior by sifting through data looking for spikes or anomalies, such as type of services given, number of services given, costs, etc.  To do this, they obviously need access to the Medicare data.  Incredibly, that access has been a systematic problem for a decade. The Associated Press reported how one contractor did not receive the data until nearly one year after being awarded the contract, while another’s contract expired before receiving all the data required to complete the assignment. The ability to trace and track is obviously compromised when there are no controls in place for the transfer of Medicare data in a reliable and consistent manner.

The report also points out that some contractors were not monitored in terms of cases they opened, including at least one example of a contactor never referring a single fraud case in a four year period. Talk about being asleep at the wheel!

Tracking Fraudulent Behavior After the Fact

No doubt contributing to the problem is the fact that those paying the claims are not the ones assigned to look for the fraud.  Medicare processes 1.2 billion claims a year by computer. That many claims and that much money, you would think there would be computer program on the front end to flag anomalies that would immediately be kicked over to the contractors for follow-up investigation. Currently, the claims are paid and then the fraud detectors go to work, how smart is that?  In a third party system there is no direct accountability or oversight at the “point of sale” – that is when the patient requests and receives a service for a set price.  Critics also point out that contractors would find more cases of fraud if there were financial incentives for them to do so. What a novel “capitalistic” idea?

The ironic thing is the government wants to take on more of the healthcare business. I would advise the feds to focus on the problems at hand by effectively managing the resources currently contracted and getting access to critical data. That will allow the opportunity to put a dent into the $60 billion fraud problem. What do you think?

Thanks for reading!

Healthcare Advocate

Rebecca Busch