Thread: Medicare hid fraud, report says

Medicare hid fraud, report says

A federal report suggested that Medicare deceived Congress by ordering auditors to ignore the agency's own policies to detect fraud, waste and abuse.
Posted on Fri, Aug. 22, 2008

BY JAY WEAVER
jweaver@MiamiHerald.com

Medicare officials may have manipulated their 2006 audit to mislead Congress about the agency's fight against fraud in the medical equipment industry, according to a damning inspector general report expected to be released early next week.

Some veteran members of Congress said Thursday they felt deceived by the agency managing the giant entitlement program for the elderly and predicted lawmakers would hold oversight hearings in the fall to grill Medicare officials.

A draft of the report said Medicare boasted it was gaining control over fraud, waste and abuse in the health insurance program, when in fact the agency's payment error rate was four times higher than it was touting for medical equipment reimbursements, according to a leading lawmaker.

The actual error rate: 31.5 percent.

Sen. Chuck Grassley of Iowa, ranking Republican on the Senate Finance Committee, criticized the Centers for Medicare and Medicaid Services for irregularities cited in the draft report by the U.S. Department of Health and Human Services' Office of Inspector General.

''I want to know what happened, who's responsible, who will be held accountable and what the [Human Services] secretary will do about it,'' said the senator, who was briefed on the draft report. ``If people cooked the books, manipulated the methodology or told the contractor to ignore the rules, those individuals need to take the heat.''

Details of the draft report were leaked and reported Thursday in the New York Times, just weeks after a Miami Herald series exposed rampant corruption in two regional healthcare fields -- medical equipment suppliers and HIV drug-infusion clinics. They fuel South Florida's reputation as the nation's capital of Medicare fraud.

The Miami Herald series underscored Medicare's failure to root out fraudulent claims, leading to the annual loss of at least $2.5 billion in South Florida and an estimated $60 billion or more nationwide.

A veteran South Florida lawmaker said Thursday that Congress needs honest answers from Medicare, which is sharply criticized in the report for advising outside auditors to ignore federal policies that would have accurately measured waste, abuse and fraud.

HEARINGS LIKELY

Rep. Ileana Ros-Lehtinen, R-Miami, predicted that the House Committee on Oversight and Government Reform, headed by California Democrat Henry Waxman, would call for hearings on the issue this fall. Other congressional panels could also have hearings. ''Congress is not going to be fooled,'' she said. ``We've been trying to get at these fraudulent claims for a long time.''

Medicare officials denied the allegations.

''While we agree with the inspector general that the [medical equipment] error rate we reported should have been higher, allegations of manipulation of this error rate are preposterous,'' said Jeff Nelligan, Medicare's director of media affairs.

The New York Times reported Thursday that Medicare officials told Congress they had reduced the cost of fraud in medical equipment reimbursements to $700 million in 2006. But the newspaper said that, based on the higher payment error rate in the inspector general's draft report, the actual loss was $2.8 billion that year. The Times also said that Medicare officials were lobbying Health and Human Services' inspector general to downplay the draft report's conclusions.

REPORT DISPUTED

Nelligan disputed the Times report. ''In addition, the $3 billion figure for improper [medical equipment] payments is an unsupported extrapolation at this time because the report only cited percentages,'' he said.

Among other things, the report says that Medicare officials told private auditors not to compare medical equipment companies' invoices for wheelchairs, oxygen machines and other supplies with doctors' records to verify patients received such services.

''Everyone is royally upset at the way that Medicare is trying to scam Congress by telling us they're fighting fraud when they're telling their auditors to ignore government policies on audits to make themselves look better,'' Ros-Lehtinen said.

But Nelligan said Medicare, working with private auditor AdvanceMed, has aggressively targeted fraud and improper payments in the medical equipment field, which accounts for about two to three percent of Medicare's $456 billion annual budget.

In 2006, Medicare said that its overall payment error rate for medical equipment and other healthcare services was 4.4 percent -- a significant decrease from the 5.2 percent reported in 2005 and drastically lower than the 10.1 percent rate reported the previous year. ''We have far exceeded our expectations, having reduced the error rate beyond the 2006 goal of 5.1 percent,'' Medicare officials said.

BILLING MISTAKES

But the reality is, Medicare officials told The Miami Herald, they don't have a specific amount for the cost of corruption nationwide. Internal audits focus mainly on billing mistakes, excessive payments and other waste with only a fractional measure of fraud. Therefore, the agency estimates its combined loss is $11 billion annually, about half the 2004 amount.

The root of the problem is that Medicare contractors review claims before authorizing payments, but they focus mainly on errors and not outright false claims.

Contractors now use computer software to block invalid equipment codes used by scofflaw Medicare operators, said Kimberly Brandt, Medicare's integrity program director, saving hundreds of millions of dollars yearly.

But critics counter that only some dubious claims are caught before payment. The operators are still able to come up with new claims codes to get around the software barriers.

In addition to the fraud with medical equipment suppliers, a Miami Herald investigation also found that dozens of clinics and doctors billed Medicare for more than $1.1 million in false claims for obsolete HIV-infusion therapy for a single Miami-Dade County patient, who collected thousands of dollars in kickbacks after selling his government issued healthcare card number to them.

http://www.miamiherald.com/835/story/652782.html

Rep. Ileana Ros-Lehtinen, R-Miami, predicted that the House Committee on Oversight and Government Reform, headed by California Democrat Henry Waxman, would call for hearings on the issue this fall. Other congressional panels could also have hearings. ''Congress is not going to be fooled,'' she said. ``We've been trying to get at these fraudulent claims for a long time.''

LOL!! yea...we know how smart Congress is! Your trying so hard You do not seem to mind the 'fraud' being perpetrated against this country and it's citizens at the hands of illegal invaders on a daily basis.

Yet you expect us to believe Congress has Medicare fraud covered!

OK, whatever you say Waxman....

let those that want universal health care take notice. You really want the govenment handling your health decisions?

ICE GET AUDITORS IN TO CHECK THIS OUT