Hearing Description: The House Committee on Oversight and Government Reform recently examined how CMS is combating Medicare fraud and the problems facing good actors because of abuse. The witnesses reported that headway is being made in reducing fraud and abuse, but there is much to be done.
Hearing Date: May 20, 2014
Hearing Summary: Prepared for AAPS by the Market Institute
The Oversight and Government Reform committee recently met to assess the ongoing effort for the government to reclaim misspent Medicare funds. Chairman James Lankford (R-OK) said in his opening statement that Medicare wastes as much as $50 billion in 2013 in improper payments. GAO has classified Medicare as “high risk” since 1990. Centers for Medicare and Medicaid is making an effort to combat fraud. However, improving consistency of these efforts is paramount.
The first witness, Shantanu Agrawal, Deputy Administrator and Director, Center for Program Integrity at CMS testified in his openign statement that his agency has made important strides in addressing improper payments and reducing waste, abuse and fraud across their programs. CMS is using a multi-faceted approach to target all causes of waste, abuse, and fraud that result in inappropriate payments by shifting towards prevention-oriented activities. FY 2015 President’s Budget includes investments that will yield $13.5 billion in gross savings for Medicare and Medicaid over 10 years. The Affordable Care Act also required CMS to screen all existing 1.5 million Medicare suppliers and providers under the new screening requirements. Since March 2011, more than 770,000 providers and suppliers have been subject to the new screening requirements and over 260,000 provider and supplier practice locations had their billing privileges deactivated for non-response as a result of those screening efforts. In July 2012, the creation of the Healthcare Fraud Prevention Partnership (HFPP) was designed to exchange facts and information to identify trends and patterns that will uncover waste, abuse, and fraud that could not otherwise be identified.
The second witness, Kathleen King, Director, Health Care, at the Government Accountability Office testified i her opening statement that HHS has made progress improving improper payment prevention and recoupment efforts in the Medicare fee-for-service (FFS) program, but further actions are needed. CMS has implemented an automated edit to identify services billed in medically unlikely amounts, but has not implemented a GAO recommendation to examine certain edits to determine whether they should be revised to reflect more restrictive payment limits. Although CMS has taken important steps to strengthen key strategies for identifying and preventing improper payments, the agency must continue to improve upon these efforts. Identifying the nature, extent, and underlying causes of improper payments and developing adequate corrective action processes to address vulnerabilities are essential prerequisites to reducing them.
The third witness, Brian Ritchie, Assistant Inspector General for Audit Services at HHS testified in his opening statement that , more action is needed from the Centers for Medicare & Medicaid Services, its contractors, and HHS to combat fraud and waste. The Medicare appeals system needs fundamental changes to resolve issues about improper payments efficiently, effectively, and fairly. The Department has has already implemented some of OIG’s recommendations, resulting in cost savings, improved program operations, and enhanced protections for beneficiaries. In FY 2013, OIG audits and investigations resulted in expected recoveries of $5.8 billion. However, it is estimated that improper Medicare payments cost taxpayers and beneficiaries about $50 billion a year. Thousands of retail pharmacies demonstrated extremely high billing for at least one of the eight measures of questionable billing they developed. They have also uncovered extreme prescribing patterns by hundreds of physicians. Key OIG recommendations to CMS related to the issues described include :
- Require Part D plans to verify that prescribers have the authority to prescribe,
- Instruct the Medicare program integrity contractor to expand its analysis of prescribers, and
- Provide Part D plans with additional guidance on monitoring prescribing patterns.
In response to questioning, Shantanu Agrawal said:
- CMS is not yet ready to discuss the $15 billion dollars owed to the government by the state of New York from overpayments
- 1% of Medicare claims are audited
- 1 million appeals are backlogged, with potentially as many as 520,000 being overturned
In response to questioning, Brian Ritchie said:
- Keeping people informed about their policies will ultimately keep the appeals backlog lower
- Fraud prevention has shown promise
Hearing Website:
http://oversight.house.gov/hearing/medicare-mismanagement-oversight-federal-government-effort-recapture-misspent-funds/
Links to Testimony:
Testimony – Shantanu Agrawal, M.D.
Deputy Administrator and Director
Center for Program Integrity, CMS
Ms. Kathleen King
Director, Health Care
U.S. Government Accountability Office
Mr. Brian P. Ritchie
Assistant Inspector General for Audit Services
Office of Inspector General, HHS
