Feds gain power over billions in Medicare fraud

Updated 3h 47m ago
By Alison Young, USA TODAY

Proposed regulations being unveiled today seek to crack down on Medicare and Medicaid fraud by subjecting operators of certain medical firms to fingerprinting and stopping payments when credible fraud allegations are made, documents show.

The rules would give federal health officials key powers to identify fraud early and reduce the estimated $55 billion in improper payments made each year in the Medicare and Medicaid programs, said Peter Budetti, director of the new anti-fraud office at the federal Centers for Medicare & Medicaid Services.

"Our initiative will allow us to go beyond what we've always called 'pay and chase' and to actually have the tools and mechanisms to prevent much of the fraud we've seen in recent years," Budetti said in an interview Sunday with USA TODAY.

Nora Super, a director at AARP, which advocates for seniors whose health care is paid for by Medicare, praised the rules. "AARP members tell us they see fraud all the time in the form of items on their bills that were never ordered, supplies never received and services never rendered," she said.

The proposed rules are part of the nation's new health law, which plans to expand coverage to millions of Americans in part by saving money on waste and fraud in the public and private health care systems. It's not known how much money these proposed rules would save, Budetti said.

They would provide increased scrutiny to $900 billion in annual spending in federal Medicare, and the state-federal Medicaid and Children's Health Insurance Program (CHIP) by:

•Suspending payments to a provider as soon as there's been a "credible allegation" of fraud that merits further investigation, including tips from consumers.

•Requiring state Medicaid programs to stop using medical providers that have been kicked out of Medicare or another state's Medicaid or CHIP program.

•Visiting more medical firms to ensure they are legitimate.

•Rating all types of medical providers by their risk for engaging in fraud. Those at highest risk would undergo fingerprinting and criminal background checks. New home-health agencies and suppliers of home-health equipment that are not publicly traded companies would initially get this increased screening, Budetti said.

Such firms have been prosecuted by a federal strike force, which since 2007 has obtained indictments against more than 800 people for falsely billing Medicare more than $1.85 billion. Michael Reinemer, of the American Association for Homecare, said the group supports anti-fraud efforts: "Nobody is more anxious to stop fraud than we are because the legitimate providers are the ones that suffer."

The proposed rules will be published Thursday, beginning 60 days for comments. Budetti expects final regulations by year's end.

The regulations can be previewed at: www.ofr.gov/inspection.aspx .

Louis Saccoccio, who heads the National Health Care Anti-Fraud Association, praised the proposed rules. "It's long overdue," said Saccoccio, whose group represents private insurers, law enforcement and other government agencies. "It shows there's a focus now on prevention as opposed to we pay these folks and then we try to get the money back and prosecute them."

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