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Medicare News
Medicare Says it Saved Over $2 Billion in Fraudulent
Claims by Providers
Using new contractors to help identify fraud, waste
and abuse
October 11, 2006 – The Centers for Medicare &
Medicaid Services said today it has save over $2 billion in claims
through aggressive local oversight and specially targeted fraud and
abuse initiatives. Much of the savings have come from focusing on
charges by Independent Diagnostic Testing Facilities. More than 980
referrals have been made to law enforcement since October 2004.
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In addition, CMS says it is continuing its
aggressive local efforts in fee-for-service oversight and helping to
identify and combat fraud in the new Medicare prescription drug benefit
with the addition of four new Medicare Drug Integrity Contractors (MEDICs).
“CMS is using every tool available to find and
fight waste, fraud and abuse across Medicare and Medicaid, to help
ensure that drug benefit dollars are spent appropriately,” said CMS
Administrator Mark B. McClellan, M.D., Ph.D.
“Our fraud and abuse prevention programs are
already working to save money, and today’s actions will provide even
more protections for beneficiaries and taxpayers.”
In 2006, CMS expanded its satellite offices in
Miami and Los Angeles, providing additional on-the-ground efforts to
identify and report fraud, waste and abuse in Medicare. In Los Angeles,
Medicare has:
● Revoked the billing numbers of 117 Medicare
providers who submitted false claims or invalid business operations,
generating a savings of approximately $200 million.
● Implemented claims processing edits which
prevent the payment of claims submitted with a deceased provider’s
identification number, resulting in savings of more than $4 million.
● Implemented plans that have denied
approximately $163 million in charges for Independent Diagnostic Testing
Facilities (IDTF), revoked the billing privileges of 83 IDTFs and denied
$445 million in claims for beneficiary Sharing or “Capping.”
● Denied the enrollment of highly suspicious
providers in Medicare, resulting in the prevention of potentially
inappropriate payments of more than $10 million.
In the Miami Office, CMS is:
● Working with the Governor’s office, federal and
state law enforcement officials, state health and licensure agencies,
the Medicare carrier and Payment Safeguard Contractors, CMS is
participating in the Florida Infusion Fraud Federal/State Task Force.
Through the use of administrative actions, auto
denial and medical record reviews, site visits, data analysis and
complaint investigations, the initiative has saved more than $1 billion
and resulted in the suspension of 104 payment claims submitted by more
than 300 providers. Approximately 400 new investigations have resulted
from this effort.
● Using a variety of prepayment edits that have
contributed to the Medicare savings (Medically Unbelievable Services
Edits - $200+ million; High Claim Volume Infusion Beneficiary Edits -
$400+ million; Service-Specific edits - $200+ million). In addition,
the U.S. Department of Justice opened 63 criminal and 38 civil Medicare
fraud cases since October, 2005.
The Agency for Health Care Administration has
suspended or revoked 11 clinic licenses and the Department of Health
revoked the licenses of 5 practitioners involved in criminal activity
associated with these clinics. CMS and the State are also pursuing
legislative and regulatory changes to address programmatic
vulnerabilities.
● Leading an identity theft initiative in South
Florida involving 2,500 Medicare beneficiaries whose Medicare numbers
have been compromised or who are participating in fraud. Through the
use of prepayment edits, more than $600 million has been saved .
● Revoking the provider numbers of more than 500
Durable Medical Equipment suppliers, resulting in a drop in Medicare
billing from $93 million in 2004 to $16 million in 2005 and in Medicare
payment from $74 million to $13 million in that same timeframe.
By using the Medicare Integrity Contractors, CMS is
able to use new and innovative techniques to monitor and analyze data to
help identify fraud; work with law enforcement, prescription drug plans,
consumer groups and other key partners to protect consumers and enforce
Medicare’s rules; and provide basic tips for consumers so they can
protect themselves from potential scams. The three new regional MEDICs
are:
● Science Applications International Corporation
in the West;
● Electronic Data Systems (EDS) in the North and
Northeast; and
● Health Integrity (the current MEDIC serving the
entire country, which will now cover) the Southeast only.
In addition to the three regional MEDIC
Contractors, CMS awarded a fourth MEDIC contract entitled the “One
Program Integrity System Integrator” (One PI) to EDS. EDS is tasked
with assisting CMS in the development of a centralized data approach for
program integrity activities. The One PI MEDIC will assist CMS by:
● Providing data analysis tools necessary for
CMS, the three regional MEDICs and other CMS contractors to detect
potential fraud, waste and abuse in Medicare and Medicaid programs;
● Using data analysis methods to uncover
potential fraud, waste and abuse on a national level;
● Identifying duplicate payments for Medicare
Part B and Part D medications; and
● Assisting CMS, the three regional MEDICs and
other CMS contractors with the fulfillment of data requests from law
enforcement and other entities.
The work of the new MEDICs will add to the range of
steps already in place to prevent fraud and abuse in the Medicare
prescription drug benefit. MEDICs are already responding to and
investigating beneficiary complaints; looking proactively at claims and
enrollment data to identify suspicious activities; and conducting
education and outreach activities to plans, law enforcement, and other
agencies. More specifically, with the support of the MEDICs, CMS has:
● Referred to HHS Office of the Inspector General
(OIG) and the Federal Bureau of Investigation the $299 ring, a scam
where beneficiaries are offered a “Medicare sponsored prescription drug
plan” in exchange for an initial “payment” of $299 or up to $379. In
some instances, the callers have prior access to the beneficiary’s
personal data such as Medicare related numbers or Social Security
numbers. CMS and local partners, including state Attorneys General and
insurance commissioners, worked to increase awareness of these scams,
resulting in nearly 300 complaints and a significant reduction in the
number of potential victims to the scam.
● Identified and referred cases to the OIG where
beneficiaries may have been enrolled in plans against their will.
● Identified and referred potential cases of drug
diversion to the OIG.
“Vigilance in protecting beneficiaries and
taxpayers from waste, fraud and abuse is one of our top priorities in
Medicare,” said McClellan.
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