Saturday, August 16, 2014

$60 billion in fraud occurs every year in Medicare, only $4.3 billion of that was recovered in 2013 despite $600 million new anti-fraud program, contractor system faulted-NY Times

8/15/14, "Pervasive Medicare Fraud Proves Hard to Stop," NY Times, b

An array of outside contractors used by the government is poorly managed, rife with conflicts of interest and vulnerable to political winds, according to interviews with current and former government officials, contractors and experts inside and outside of the administration. Authority and responsibilities among the contractors are often unclear and in competition with one another. Private companies — like insurers and technology companies — have responsibility for enforcement, often with little government oversight.

Fraud and systematic overcharging are estimated at roughly $60 billion, or 10 percent, of Medicare’s costs every year, but the administration recovered only about $4.3 billion last year. The Centers for Medicare and Medicaid Services, which is responsible for overseeing the effort, manually reviews just three million of the estimated 1.2 billion claims it receives each year.

“It’s pretty dysfunctional because the contractors don’t communicate with each other,” said Orlando Balladares, a fraud investigator who has worked for both the government and private firms....

But even some of the administration’s successes shed light on the crackdown’s limitations.

So-called recovery audit contractors, hired to reduce hospital overbilling, have an unparalleled record of returning money to Medicare, accounting for $8 billion in returned money since 2009. But hospital resistance to the contractors and an overburdened appeals process have largely stopped the recovery efforts.

“They’ve been brought to a halt by their very success,” said Marsha Simon, an expert on health policy and legislative strategy in Washington.

Just this summer, Medicare shut down a successful hotline in fraud-plagued South Florida, saying it was no longer necessary. The hotline is credited with leading to more than 1,000 fraud investigations and identifying tens of millions of dollars in questionable payments in the last five years. Trained staff members hired by an outside contractor answered calls and passed relevant tips to investigators within 48 hours.

Calls are now being routed to a general Medicare number, where it can take months for a complaint to be addressed, according to the most recent evaluation of the program.

The Obama administration has allocated much of its antifraud money to traditional efforts, including nine federal strike forces that coordinate responses among different government agencies. Earlier this year, for example, teams in Miami, Brooklyn, Detroit and elsewhere announced charges against 90 people accused of a total of $260 million in fraudulent billings.

But the biggest role goes to a network of private contractors that has always been a distinguishing feature of Medicare’s operation and sets it apart from so many other huge federal bureaucracies. 

From its inception in 1965, the program has relied on private insurance companies to handle claims from beneficiaries.

The acronyms by which the contractors are known internally are almost a parody of bureaucratic entanglement. Claim payments are handled by Medicare administrative contractors, or MACs, which are generally divisions of private insurers like WellPoint. Recovery audit contractors, or RACs, concentrate on overbilling rather than outright fraud. They include CGI Federal, the same organization that was criticized for its work on

Medicare also employs zone program integrity contractors, known as the ZPICs (pronounced ZEE-pix), that specialize in fraud. They include a unit of Hewlett-Packard and a division of Blue Cross of Alabama. Even the contractors have contractors to oversee them. And UPICs (YOU-pix), which represent the combination of fraud contractors specializing in Medicare and Medicaid, are coming.

The decision to outsource major responsibilities has been a longstanding source of frustration even to many of the agency’s officials. Ted Doolittle, who worked as a deputy director at the Center for Program Integrity and left in April, described fighting fraud through contractors as being “almost reduced to working with a puppet. You’re working the strings above.”

Former and current law enforcement officials and people who have worked with the contractors say there is little sharing of information among the companies or even with the government.

The recovery audit contractors, for example, do not report to the Center for Program Integrity but to another division within Medicare. When they pass on evidence of possible fraud, a rare occurrence, Medicare often fails to follow up, according to a report by the Office of the Inspector General.

Because they are paid on a contingency basis, ranging from 9 to 12.5 percent of the improper billing that they find, recovery audit contractors have been criticized by hospitals as little more than bounty hunters. The high number of hospital appeals has helped create a backlog of an estimated two years for an administrative law judge to hear a disputed case. After Congress halted some of the audits, Medicare suspended the program until new contracts were awarded. This month, because the awards are delayed, the agency began to allow a limited number of reviews.
The integrity contractors have also been criticized, in part for their ties to the companies responsible for paying claims, creating a significant potential conflict of interest, according to a government report released in 2012. The report also faulted Medicare for not having “a written policy for reviewing conflict and financial interest information submitted.” Medicare officials say appropriate procedures are in place, and that the contractors are investigating providers, not the organizations paying claims....

Trying to review the system after its first year, the Office of Inspector General said missing, inconsistent and possibly inaccurate information made it impossible to know whether there were any savings. In a second report, in June, the office said it could verify only $54 million in savings from the new computer system, even though Medicare said it had identified $211 million. A quarter of that amount was actually recovered, according to the Office of Inspector General report."...


The last paragraph of the NY Times article reveals the problem: No matter who's president or who controls the Senate, pathetic thug Senators like Orrin Hatch watch fraud go by for years, do nothing to stop it, just say it's "concerning:"

NY  Times: "Senator Orrin G. Hatch, Republican of Utah, is among those in Congress who have been skeptical of the system’s effectiveness.It is concerning that they have only found $54 million in adjusted savings in its second year,” the senator said. “There is a difference between simply identifying waste and actually taking steps to prevent and recover it.”"


Comment: Everyone knows federal programs invite massive theft. Most accept it because they see what happens to those who speak out against adding more federal programs with built-in fraud: they're demonized as anti-government racists. Medicare is just one example. Fraud is common in federal government operations because there are no consequences for bad behavior. It's not their money so they don't care. This is true no matter who's president. They complain they need more taxes, they get more taxes either overtly or covertly by regulation, then allow the "revenue" to be stolen. This can't be explained except to call it what it is, organized crime. Why wouldn't you stop it if you could? Answer: You'd suffer serious consequences. This is what the Tea Party was originally about before it was co-opted in its crib.


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