3 Medicare fraud and abuse risk areas to target

Government agencies and contractors must make a more concerted effort to reduce improper payments, which cost Medicare about $50 million last year, U.S. Department of Health and Human Services Deputy Inspector General Gloria Jarmon told lawmakers at a congressional hearing last week. Improper fee-for-service payments accounted for 10 percent of all Medicare payments in 2013, up from 8.5 percent in 2012, Jarmon said.

"I think most Americans, when they hear these numbers, are scandalized," Rep. Peter Roskam (R-Ill.) said, USA Today reported, adding that Democrats and Republicans alike were angered by the Centers for Medicare & Medicaid Services' inability to curb Medicare fraud, waste and abuse.

Jarmon's testimony highlighted three key areas of Medicare program integrity concern:

1. Payments for ineligible persons

Medicare has overpaid millions of dollars on behalf of ineligible people, including the unlawfully present, entitlement-terminated, jailed and deceased beneficiaries. CMS must collect more accurate and timely information to trigger edits that prevent such payments, Jarmon recommended.

2. Payments for prescription drugs

Part D has paid millions for prescriptions from unauthorized prescribers, including massage therapists and sports trainers. Part D paid an estimated $25 million for Schedule II drugs billed as refills in 2009. And the government flagged extreme prescribing patterns by doctors and pharmacies and has opened a growing number of drug diversion cases, particularly for respiratory, antipsychotic and HIV/AIDS medications.

3. Payments to hospitals

Medicare could save about $600 million in two years by applying a hospital transfer payment policy for early discharges to hospice care, Jarmon testified. The program could save about $38 million more by ensuring that admissions related to short-stay hospital claims involving canceled elective surgeries meet Medicare requirements that admissions are reasonable and necessary.

Moreover, CMS should make better use of data reported by Medicare recovery audit contractors to improve Parts C and D oversight, Jameson told Congress. And CMS must address contractor performance problems in a timely manner.

Another expert recommended CMS begin conducting prepayment and postpayment claims reviews to identify the nature, extent and underlying causes of improper payments, USA Today noted.

For more:
- read Jarmon's testimony (.pdf)
- here's the USA Today article