Incomplete provider screening leaves Medicare, Medicaid open to fraud

Subpar provider enrollment screening processes continue to plague Medicare and Medicaid, leaving both programs vulnerable to fraud and contributing to nearly $90 billion in improper payments in 2015, according to testimony during a House subcommittee hearing.

In her testimony Tuesday, Ann Maxwell, assistant inspector general at the Office of Inspector General (OIG), noted that provider enrollment is a "key component" to minimizing improper payments. She also urged the Department of Health and Human Services (HHS) to "redouble its efforts" to ensure it is paying the right provider for the right service. Previous reports have indicated that eliminating improper payment is critical to sustaining Medicaid, and a recent independent audit found HHS failed to hit its target improper payment rate of less than 10 percent.   

"The enrollment process is Medicaid and Medicare's chance to make sure they are not doing business with those whose business it is to commit fraud," she said.

Her testimony was supported by three new reports released by the OIG highlighting enrollment vulnerabilities within each program. In Medicare, the OIG found that more than three-quarters of providers had names registered with the Centers for Medicare & Medicaid Services (CMS) that did not match the names submitted to the OIG, and nearly all provider names did not match those submitted to state Medicaid programs. Just two of the 11 Medicare contractors checked exclusion databases when enrolling providers.

The OIG found similar vulnerabilities with state Medicaid programs. Fourteen state programs did not verify the accuracy of provider ownership information or check exclusion databases. A third report found the majority of states still don't conduct fingerprint-based background checks required under the Affordable Care Act. Eleven states have also failed to implement site visits to screen high-risk providers.

During his testimony, Seto Bagdoyan, director of forensic audits and investigative service at the Government Accountability Office pointed to a June 2015 report that found 22 percent of Medicare physicians list a potentially invalid address. Bagdoyan added that the absence of flags built into enrollment software "increased Medicare's vulnerability to potential fraud." However, according to testimony from Shantanu Agrawal, M.D., deputy administrator and director for the Center for Program Integrity, CMS incorporated new address verification software earlier this year.

For more:
- watch the subcommittee hearing
- here's Ann Maxwell's testimony
- see the OIG report on Medicare vulnerabilities
- here's the OIG report on Medicaid vulnerabilities
- read the OIG report on enhanced Medicaid provider screenings
- here's Seto Bagdoyan's testimony
- read Shantanu Agrawal's testimony

Related Articles:
GAO to Congress: CMS needs to do more to prevent Medicaid fraud
Medicare physician enrollment screening overlooks questionable addresses, license reviews
Report: Eliminating improper payments is critical to sustaining Medicaid
HHS misses key opportunities for improper payment recovery
Senate hearing addresses Medicare and Medicaid overpayments
Provider revalidation a lone bright spot amid gaps in enrollment screening

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