Everyone celebrates his or her birthday in a different way. Some opt for a full-blown bash, telling everyone within earshot a detailed story of their birth. Others jump to the other end of the spectrum: Tell no one and pretend it doesn't exist. If I don't acknowledge it, I'm not getting older. That's how it works, right?
As you may have heard, Medicare and Medicaid turned 50 last month. I know this because it seems as though everyone is screaming it from the rooftops, followed by a constant stream of opinions exulting or bemoaning the program's health.
"Look how good Medicare looks!" someone gushes. "So comprehensive and well-managed."
"I don't know," says another. "Looks awfully bloated to me. Maybe it's time to get some work done?"
"Shouldn't we start looking at nursing homes?" another chimes in.
Since Medicare and Medicaid are multibillion-dollar government programs, they don't get much choice in how they celebrate. Rather, their birthday serves as an opportunity for us to nitpick the last 50 years, while making wild predictions about the next five decades. So much for silent introspection.
I'm not one to miss out on a party, especially one that quickly transforms into a feeding frenzy. I don't have any answers regarding the viability or longevity of the Medicare and Medicaid programs, but the discussions over the last month made me wonder: How has fraud prevention evolved since President Lyndon B. Johnson established the program in 1965?
What I found is that while fraud prevention has evolved dramatically in the last 50 years, the fraud schemes themselves aren't drastically different. According to a 1976 hearing by the Senate's Special Committee on Aging, the first signs of healthcare fraud emerged in the late 1960s when investigators estimated overpayments to New York City nursing homes had reached $70 million over a five-year period. Months prior, another hearing had exposed the danger of "Medicaid Mills," medical offices established in poor areas of the country that were at the core of emerging fraud schemes. Fifty years later, the only difference is fraudsters sometimes ply the poor with sneakers.
Interestingly, Johnson and his cohorts never really addressed fraud prevention in the Social Security Act Amendments of 1965 that officially established the Medicare and Medicaid programs. In fact, the law included just one provision that prohibited providers from making false claims to the program. Translation: "Don't do it... Please."
Essentially, that was the only fraud enforcement during the first 12 years of the program's life until concerns surrounding Medicaid Mills and nursing home overpayments crescendoed to a roar, prompting Congress to pass the Medicare-Medicaid Anti-Fraud and Abuse Amendments of 1977. Prior to that, prosecutors relied on the Social Security Amendments of 1972, which established the original anti-kickback statute. But it wasn't until 1976, when then U.S. Attorney Samuel Skinner—referred to at the time as "the most active U.S. attorney in terms of Medicaid fraud prosecutions"—litigated the first convictions under the law.
But the Medicare-Medicaid Anti-Fraud and Abuse Amendments of 1977 was the first legislation to establish a more rigorous—although voluntary—means of Medicaid fraud prevention by providing each state with federal funding to establish a Medicaid Fraud Control Unit (MFCU). By the following year, 17 units were federally certified. It wasn't until 1995 that states were required to establish MFCUs.
At the same time, Congress established the Department of Health and Human Services (HHS) Office of Inspector General (OIG) to oversee fraud and abuse within both healthcare programs. For the first time, Medicare and Medicaid had a watchdog to look over their spending.
For some, that watchdog was too tame. When President Ronald Regan came to office in 1981—after running on the platform that he would eradicate fraud, waste, and abuse—he promptly fired 15 inspectors general and instituted his own aggressive replacements.
''We want to find and have people that are meaner than a junkyard dog when it comes to ferreting out waste and mismanagement," the White House Press Secretary James S. Brady said at the time.
At the time, the Medicare and Medicaid programs were still in their teens, wild and untamed, and that "junkyard dog" moniker represented a harsher approach to fraud enforcement. The junkyard dog assigned to the Medicare and Medicaid programs was Richard Kusserow. According to the book "The Criminalization of Medicine: America's War on Doctors," Kusserow represented a new "tyrannical enforcement system" that relied on a bounty system in which OIG agents were expected to meet conviction quotas (an approach that was eventually eliminated).
It set the tone for future fraud enforcement, and five years later, when Medicare and Medicaid turned 21, it received a life-changing gift: New amendments to the False Claims Act (FCA) that allowed the government to better use whistleblower claims and increased the awards for whistleblowers to 15-30 percent of the funds recovered in a case. The amendments also allowed the government to assess fines ranging from $5,000 to $10,000 per claim and recover triple the damages.
Those changes to a law laid the groundwork for an impressive string of prosecution. Between 1987 and 2014, FCA settlements and judgements totaled more than $44 billion. More than $29 billion of that is attributed to FCA actions through HHS.
In 1996, additional fraud control measures were added through the Health Insurance Portability and Accountability Act (HIPAA), which established a Health Care Fraud and Abuse Control Program designed to coordinate federal, state and local law enforcement activities concerning healthcare fraud. HIPAA also made the leap to criminalize fraud, enacting heavier penalties for fraudsters.
As Medicare and Medicaid entered its 40s, the government developed a more refined approach to fraud prevention and enforcement, in response to new emerging schemes involving power wheelchairs and Part D drugs. In 2007, the federal government created Medicare Fraud Strike Force Teams in geographical hotspots around the country and in 2009, President Barack Obama created the Health Care Fraud Prevention and Enforcement Action Team, expanding the strike force teams to seven additional cities and reinforcing partnerships between HHS and the Department of Justice.
Medicare and Medicaid had established a level of wealth they could harldly control, and in 2010, the Affordable Care Act added to enforcement efforts by devoting more money and resources toward protecting that wealth by offering better screening policies, instituting harsher fraud penalties and perhaps most importantly, improving access to claims data.
It's possible that at 50, Medicare and Medicaid are in the midst of a full-blown mid-life crisis. Gone are the days when enforcement relied on a pay-and-chase approach that took years to catch up to criminals. Technology and the accessibility of multiple data sources have changed the game entirely. Now, the government—and the healthcare insurance industry as a whole—are switching gears, using predictive analytics to stop fraud before any payments are made.
Aligned side by side, it's stunning to see the changes in fraud enforcement from 1965, when Medicare and Medicaid had virtually no protections, to 2015, where systems track and disseminate billions of data points. But look at all the smaller steps in between and the evolution is more congruent. It's a reminder that fraud prevention is constantly evolving. Who knows? In five more decades, we may be looking at an entirely new approach. - Evan (@HealthPayer)