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CMS: We Pay Dead People
It's close enough to the truth. Medicare didn't actually pay dead doctors. Paying dead doctors probably would have been less costly, because they can't cash checks. Fraudsters who used dead doctors' Medicare numbers did get paid, however. And lots of live people cashed big checks from CMS based on prescriptions allegedly written by doctors who were cold in the ground at the time the equipment was ordered.
We're lucky we found out.
It took a congressional investigation to determine that CMS paid nearly 500,000 claims to medical equipment providers who billed the behemoth for medical equipment that probably was not only ordered fraudulently, but was also probably never delivered to anyone. In any case, they certainly didn't have a legit doctor's prescription for the stuff, which is required for reimbursement. The Senate Permanent Subcommittee on Investigations estimates that somewhere between $60 million and $92 million (they're really not sure exactly how much they lost to fraud, but what's a few dozen million among friends?) was paid to fraudulent billers using dead doctors' ID numbers between 2000 and 2007.
That's mind-boggling to most of us, but it's a rounding error in the nearly $400 billion CMS shells out to hospitals, doctors, and other healthcare providers each year.
If you're like most healthcare leaders, your hospital or nursing home or physician practice could use some of that money. After all, you follow the rules.
So for following the rules, what do you get? Reimbursements ratcheted down each year. A Band-Aid slapped on at the end of the fiscal year to avoid a yearly physician payment cut that springs from a now-inconvenient law like the Balanced Budget Act of 1997 that outlived its political usefulness about a day after it was passed. Temporary and convoluted "solutions" by career politicians who have never said "no" to anybody and can't imagine doing anything but telling the rest of us what to do. What about the regulatory front? You suffer under initiatives aimed at saving Medicare money that put onerous overhead costs directly on you. I'm painting with a broad brush here, of course, but that's what happens when you're fed up.
Note to Medicare: Not paying for "never events" is a great idea, but so is matching up Medicare's physician numbers with monthly death reports from Social Security so that you don't pay claims based on prescriptions that could have only been sent from beyond the grave. Apparently, it never occurred to anyone at CMS to do this before all this embarrassing stuff came out.
Oh, and by the way: Herb B. Kuhn, CMS's deputy director and the unlucky guy who had to explain this stuff to Congress last week, says he shares senators' concerns that Medicare continues to pay claims based on dead doctors' prescriptions.
Sheesh.
Is this the blueprint for nationalized healthcare? I sure hope not.
Philip Betbeze is finance editor with HealthLeaders magazine. He can be reached at pbetbeze@healthleadersmedia.com.
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srosebelcher (7/25/2008 at 10:48 AM)
The Senate Permanent Subcommittee on Investigations estimates that Medicare paid out between $60 million and $92 million in fraudulent claims to medical equipment providers. This may seem like a drop in the bucket for an agency that pays out $400 billion each year to hospitals, doctors and other healthcare providers, but it is only the tip of the proverbial iceberg. Industry experts estimate that 35 percent of all healthcare provider data about doctors and other medical professionals is inaccurate. Inaccurate data costs health plans, including Medicare, an average of $20 each time a payment must be reissued or re-adjudicated due to an undeliverable address, duplicate entry or a deceased doctor. If Medicare is unable to catch millions of dollars in fraudulent submissions for dead doctors, how much of our money is the agency spending on errors and fraudulent claims caused by other healthcare provider data problems? This incident clearly shows that government hasn't made the time or demonstrated the expertise to obtain and maintain accurate provider information. Furthermore, the government has not been able to accurately match claims to the correct provider for something as basic as whether or not the doctor or other medical professional is alive. The good news is that fraud and waste can be avoided, even eliminated. All that Medicare needs to do is partner with the private sector. Today, many of America's leading health plans have already adopted commercially available information solutions that reduce the risk of fraud, and lower the cost of doing business through significant improvements in the accuracy of provider databases. Now, if those with oversight responsibility would insist on this course of action for Medicare, taxpayers could be saved millions of dollars, and the money could be used to pay providers who actually follow the rules, and deserve much more than the continual cutbacks in reimbursements! Stephanie Rose-Belcher, Enclarity, Inc.
jefles (7/21/2008 at 3:03 PM)
The truly sad part about this is the fact that my company has presented a solution to CMS that would prevent this and other types of fraud. Our solution is easy to implement, uses proven technology which is already in the field, and is inexpensive. We estimate with a 1% reduction in fraud, our ROI is over 100%.