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Your Daily Posterous Spaces Update November 15th, 2011 Health

Officials Struggle To Monitor Medicare Fraud Contractors As Problems

Persist, Report Finds | Fox

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Health Officials Struggle to Monitor Medicare Fraud Contractors as Problems

Persist, Report Finds

Published November 14, 2011

| Associated Press

MIAMI – Contractors paid tens of millions of taxpayer dollars to detect

fraudulent

Medicare<http://www.foxnews.com/topics/health/healthy-aging/medicare.htm#r_src=r\

amp>claims

are using inaccurate and inconsistent data that makes it extremely

difficult to catch bogus bills submitted by crooks, according to an

inspector general's report released Monday.

Medicare's contractor system has morphed into a complicated labyrinth, with

one set of contractors paying claims and another combing through those

claims in an effort to stop an estimated $60 billion a year in fraud. The

U.S. Department of Health and Human Services inspector general's report --

obtained by The Associated Press before its official release -- found

repeated problems among the fraud contractors over a decade and systemic

failures by federal health officials to adequately supervise them.Embedded

media -- click here to see

it.<http://ptmanagerblog.com/health-officials-struggle-to-monitor-medicare>

Investigators found that health officials did not consistently evaluate key

measures such as how many investigations were initiated by contractors.

Investigators examined two contractors in charge of fraud hot spots in

Florida and Texas during a nine-month period.

Contractors also used different types of data, some of which was

inaccurate. That makes it impossible to determine if the contractors are

effective, leading critics to question how it's possible to adequately

monitor them.

The same issues were identified 10 years ago by inspector general

investigators, and dozens of reports in the past decade also have found

problems. In 2001, acting Inspector General Mangano testified that

the Centers for Medicare &

Medicaid<http://www.foxnews.com/topics/politics/healthcare/health-care.htm#r_src\

=ramp>Services

(CMS) wasn't doing a good job of holding contractors accountable.

" The issues we identified have been problematic for some time and present a

serious obstacle " to overseeing the contractors, Inspector General

R. Levinson wrote in Monday's report.

CMS has repeatedly said the latest system of fraud contractors was designed

to fix the problems with earlier contractors and allow the agency to better

monitor them.

Critics say fraud contractors have been revamped over the years, but

nagging problems persist.

Investigators found that one contractor referred only two cases of

potential fraud to CMS between 2005 and 2008; another did not refer any.

But they may have no incentive to refer cases because they are not paid

contingency fees for doing so, investigators said. Many experts agree.

" Very few private contractors have financial incentives which are genuinely

linked to protection of public funds, " said Malcolm Sparrow, a health care

fraud expert at Harvard University.

In 2010, inspector general officials testified on Capitol

Hill<http://www.foxnews.com/topics/politics/capitol-hill.htm#r_src=ramp>that

contractors reviewing fraud in Medicare's prescription drug program

also faced serious problems. One contractor didn't receive certain data

until nearly one year after being awarded the contract. Once it received

the data, key parts were missing or incorrect. Another contractor didn't

have access to certain data before its contract ended.

In Monday's report, contractors also said they had difficulty obtaining

data they needed and said that daily access to real-time Medicare claims

data is critical. One contractor said it eventually had to buy the data

from another contractor, which caused a 30-day delay.

The contractors generated only about 100 cases each of potential fraud

using the limited data during a nine-month period. Critics say those

figures are anemic compared to the billions of dollars of fraud occurring

annually.

U.S. Sens. Tom

Carper<http://www.foxnews.com/topics/politics/thomas-carper.htm#r_src=ramp>,

D-Del., and Tom

Coburn<http://www.foxnews.com/topics/politics/tom-coburn.htm#r_src=ramp>,

R-Okla., have introduced legislation that would require Medicare officials

to share fraud data with law enforcement and contractors, as well as put

accuracy requirements into the payment administration contracts.

CMS officials said they are working diligently to give contractors access

to data. They also said the investigation was conducted during early stages

of the transition, so many issues have since been addressed. They agreed

contractors should have access to data, but the agency has not indicated

that improved access has been put in place.

Historically, Medicare has paid claims first and reviewed them later, which

worked when most providers were hospitals. But the " pay and chase " method

gives criminals weeks of lag time to get paid for fraudulent claims and

skip town before authorities catch on.

Critics say separating contractors who pay claims from fraud contractors

has created a system where the two are essentially working against each

other. Fraud detection must be built into the payment system so contractors

can track fraudulent claims as soon as crooks send them in, not days or

weeks later, said Kirk Ogrosky, former head of the Justice Department's

division that investigates health care fraud.

" By divorcing the job of paying claims from detecting fraud, CMS encourages

an ineffective `pay-and-chase' system, " he said.

via

foxnews.com<http://www.foxnews.com/politics/2011/11/14/problems-persist-with-med\

icare-fraud-contractors/>

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