War on Health Care Fraud Suffers from Lack of Oversight By Tod Aronovitz | 09/02/14 | 0 Comment

Despite a $100 million computer system and strike forces in Medicare fraud hot spots like Miami, the government’s declared war on health care fraud remains ceaseless and relentless.

According to a news story in the August 15 New York Times, part of the issue may be how the $600 million annual anti-fraud effort is structured. Outside contractors hired to fight fraud have little government oversight, are often in competition with each other, and are not compelled to share information amongst each other or with the government, according to the article.

Ten percent of Medicare’s costs every year, or about $60 billion, can be attributed to fraud and systematic overcharging, the article reported, but only about $4.3 billion of that was recovered last year. The Centers for Medicare and Medicaid Services (CMS) manually reviews just three million of the estimated 1.2 billion claims it receives each year.

Although much of the allocated funds go to traditional efforts like nine federal strike forces that coordinate responses throughout the country, an even bigger chunk goes to a network of private contractors that have been part of the Medicare program since its beginnings in 1965, the article said.

These insurance companies, or Medicare administrative contractors (MACs), handle claims from beneficiaries. They are often divisions of private insurers like WellPoint. There are also recovery audit contractors (RACs) like CGI Federal who focus on overbillings at hospitals and elsewhere. RACs have returned $8 billion since 2009 but, the article revealed, their efforts have been hampered by hospital resistance and a high number of appeals that have created a two-year backlog.

Medicare also utilizes ZPICs (“zee-pix) which are zone program integrity contractors, including a unit of Hewlett-Packard and a division of Blue Cross of Alabama, that specialize in fraud. UPICs (“you-pix”) are also in the works, which represent the combination of fraud contractors specializing in Medicare and Medicaid.

Law enforcement and others working with these contractors, however, have pointed out that each group acts in their individual silos. RACs, for example, do not report to the Center for Program Integrity (Medicare’s antifraud center) like the ZPICs, but to another division within Medicare. In the off chance that RACs pass on information of possible fraud, Medicare often does not follow up, according to a report by the Office of the Inspector General (OIG).

It also appears there is a potential conflict of interest between the companies responsible for paying claims and the integrity contractors who often have ties to them, according to a government report released in 2012. This report also reproached Medicare for not having “a written policy for reviewing conflict and financial interest information submitted.” Medicare responded that appropriate procedures are in place, and that the contractors are ‘investigating providers’ not the organizations paying claims.

Last October, a federal Government Accountability Office report also faulted Medicare for its lack of oversight, such as not directly rewarding the contractors for helping meet agency goals like aiming at high-risk providers.

Even other methods of combating fraud are a victim of their success. This summer, Medicare shut down a successful hotline in South Florida staffed with trained personnel who passed tips on to investigators within 48 hours. In the past five years, the hotline led to more than 1,000 fraud investigations which found tens of millions of dollars in questionable payments. Instead, calls will now go to a general Medicare number, with an expected turnaround time of months rather than days, according to a recent program review.

Finally, when evaluating the new computer system, the OIG’s assessment said that missing, inconsistent and possibly inaccurate information made it difficult to determine whether there were any savings. A second report in June said that the office could confirm $54 million in savings, even though Medicare attributed $211 million in savings to the new computer system. One fourth of that amount was actually recovered, according to the OIG report.

Dr. Shantanu Agrawal, who took the job of overseeing the Center for Program Integrity earlier this year, reiterated that fighting fraud remains a top priority and added that Medicare is already adopting some of suggestions resulting from these reports, such as setting priorities for its contractors.

How to Report Miami Medicare Fraud

Healthcare professionals or medical billing employees who have knowledge of questionable Medicare billing practices can file a confidential legal claim under the False Claims Act. By acting as a “whistleblower” in what is known as a “qui tam” lawsuit, a private party may collect up to 30 percent of the amount recovered, depending on how the case is prosecuted.

ARONOVITZ LAW: Miami Whistleblower / Qui Tam Law Firm

The Miami Qui Tam law firm of ARONOVITZ LAW routinely works with whistleblowers to document Medicare fraud and other forms of fraud against the government. Contact Miami Whistleblower / Qui Tam lawyer Tod Aronovitz to discuss your case.