Medicare poorly polices payments to suspicious providers

Despite billings that raise red flags, Medicare often continues to fork over thousands or even millions of dollars to unscrupulous providers, sometimes for years, the Wall Street Journal reports.

In one case WSJ uncovered, a physical therapist in Brooklyn billed for $2.5 million in 2008 alone, so much in services that it would have been impossible for him to do all that work according to state and Medicare guidelines, fraud experts said. Yet Medicare continues to pay him.

In another case, even after a Medicare antifraud contractor flagged a doctor who pulled in more than $1.8 from Medicare in 2007, the agency paid him another $6.7 million over more than two years.

To be sure, Medicare has its reasons for not stopping questionable payments as soon as possible. First off, it must pay nearly everybody within 30 days. And Medicare doesn't want to suspend payments to providers who made honest mistakes, because it could hurt beneficiaries to go without treatment.

Then there's evidence that organized crime is infiltrating Medicare, and could cost taxpayers $1 million a day for each Medicare provider license these criminals get a hold of.

Yet law-enforcement agencies and Medicare contractors face so many Medicare fraud cases that they can't investigate them all. In some cases, prosecutors and investigators may ask Medicare to keep paying so targeted providers don't catch wind of the investigation.

WSJ contends that Medicare's main problem is a failure to fully dig through its claims database, which contains a record of every claim submitted and every dollar paid to providers. And while Medicare may be on the right path in its antifraud efforts, Kimberly Brandt, who headed up the agency's antifraud efforts from 2004 to June of this year said the transition wouldn't be easy or automatic.

Medicare is moving on from its historic "pay-and-chase" approach. Instead of trying to recover incorrect payments that have already gone out the door, Peter Budetti, who heads CMS' new antifraud arm, wants to see Medicare model itself after the credit-card industry, whose software flags fishy or suspicious charges before paying them. "Fraud prevention is our new emphasis," he said.

To learn more:
- read the Wall Street Journal article

Related Articles:
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OIG asks for authority over Medicare fraud
Medicare fraud attracts organized crime
Grassley: CMS ignored repeated Medicare fraud warnings
Busted: 94 charged with $251 million in false Medicare claims

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