Weaknesses Plague Medicare Enrollment

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Original story posted on: July 6, 2012

WASHINGTON, D.C. – The Centers for Medicare & Medicaid Services (CMS) has made big strides in implementing several key anti-fraud strategies recommended by the federal Government Accountability Office (GAO), but there is plenty of work left to do in that respect, according to recent testimony delivered by GAO Director of Healthcare Kathleen King before the U.S. House of Representatives’ Committee on Energy and Commerce.

The GAO’s previous work found “persistent weaknesses” in Medicare’s enrollment standards and procedures, detriments that increased the risk of enrolling entities defrauding the program, a summary of King’s testimony indicated. The good news, the summary noted, is that CMS during recent years has strengthened safeguards against such actions – for example, in February 2011 it set up a system designating three levels of risk (limited, moderate and high) and began applying different screening procedures for providers that fall under those categories.

However, there are recommended actions CMS has yet to take, including implementation of some provisions of the Patient Protection and Affordable Care Act, the legality of which was confirmed in the recent decision handed down by the U.S. Supreme Court. Specifically, King noted in her testimony, CMS has not a) determined  which providers will be required to post surety bonds to help ensure that payments made for fraudulent billing can be recovered; b) contracted for fingerprint-based criminal background checks; c) issued a final regulation to require additional provider disclosures of information; and d) established core elements for provider compliance programs.

The GAO also previously found that enhanced efforts to review claims on a prepayment basis can prevent payments from being made for potentially fraudulent claims, the summary of King’s testimony indicated – such efforts also can benefit systems used by CMS and its contractors to review claims on a post-payment basis, and could help such entities better identify patterns of potentially fraudulent billing for further investigation.

CMS has controls in Medicare’s claims-processing systems to determine if claims should be paid, denied or reviewed further, King noted, adding that these controls require timely and accurate information about providers that GAO has recommended that CMS strengthen. GAO currently is examining CMS’s new Fraud Prevention System, which uses analytic methods to examine claims before payment to develop investigative leads for Zone Program Integrity Contractors (ZPIC), the contractors responsible for detecting and investigating certain types of potential fraud.

Having mechanisms in place to resolve vulnerabilities that lead to erroneous payments is critical to effective program management and could help address fraud, King concluded. Such vulnerabilities include service- or system-specific weaknesses that can lead to payment errors, she said – for example, providers receiving multiple payments as a result of incorrect coding.

The GAO previously has identified weaknesses in CMS’s process for addressing identified vulnerabilities, and the U.S. Department of Health and Human Services Office of Inspector General recently reported on CMS’s inaction in addressing vulnerabilities identified by its contractors, King noted. The GAO is “evaluating the current status of the process for assessing and developing corrective actions to address vulnerabilities,” King noted in the summary of her testimony.

“GAO has designated Medicare as a high-risk program,” King’s office noted in an explanatory note about why such scrutiny is being applied to the world of federal involvement in healthcare. “Since 1990, every two years GAO has provided Congress with an update on this program, which highlights government operations that are at high risk for waste, fraud, abuse mismanagement or in need of broad reform. Medicare has been included in this program in part because its complexity makes it particularly vulnerable to fraud.”

“The deceptive nature of fraud makes its extent in the Medicare program difficult to measure in a reliable way,” the note added, “but it is clear that fraud contributes to Medicare’s fiscal problems. Reducing fraud could help rein in the escalating costs of the program.

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Mark Spivey is a correspondent for RACmonitor.

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Mark Spivey

Mark Spivey is a national correspondent for ICDmonitor.com, RACmonitor and ICD10monitor who has been writing on numerous topics facing the nation’s healthcare system (and federal oversight of it) for eight years.

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