8/15/14, "Pervasive Medicare Fraud Proves Hard to Stop," NY Times, b
An
array of outside contractors used by the government is poorly managed,
rife with conflicts of interest and vulnerable to political winds,
according to interviews with current and former government officials,
contractors and experts inside and outside of the administration.
Authority and responsibilities among the contractors are often unclear
and in competition with one another. Private companies — like insurers
and technology companies — have responsibility for enforcement, often
with little government oversight.
Fraud
and systematic overcharging are estimated at roughly $60 billion, or 10
percent, of Medicare’s costs every year, but the administration
recovered only about $4.3 billion last year. The Centers for Medicare
and Medicaid Services, which is responsible for overseeing the effort,
manually reviews just three million of the estimated 1.2 billion claims
it receives each year.
“It’s
pretty dysfunctional because the contractors don’t communicate with
each other,” said Orlando Balladares, a fraud investigator who has
worked for both the government and private firms....
But even some of the administration’s successes shed
light on the crackdown’s limitations.
So-called
recovery audit contractors, hired to reduce hospital overbilling, have
an unparalleled record of returning money to Medicare, accounting for $8
billion in returned money since 2009. But hospital resistance to the
contractors and an overburdened appeals process have largely stopped the
recovery efforts.
“They’ve
been brought to a halt by their very success,” said Marsha Simon, an
expert on health policy and legislative strategy in Washington.
Just
this summer, Medicare shut down a successful hotline in fraud-plagued
South Florida, saying it was no longer necessary. The hotline is
credited with leading to more than 1,000 fraud investigations and
identifying tens of millions of dollars in questionable payments in the
last five years. Trained staff members hired by an outside contractor
answered calls and passed relevant tips to investigators within 48
hours.
Calls
are now being routed to a general Medicare number, where it can take
months for a complaint to be addressed, according to the most recent
evaluation of the program.
The
Obama administration has allocated much of its antifraud money to
traditional efforts, including nine federal strike forces that
coordinate responses among different government agencies. Earlier this
year, for example, teams in Miami, Brooklyn, Detroit and elsewhere
announced charges against 90 people accused of a total of $260 million
in fraudulent billings.
But
the biggest role goes to a network of private contractors that has
always been a distinguishing feature of Medicare’s operation and sets it
apart from so many other huge federal bureaucracies.
From its inception
in 1965, the program has relied on private insurance companies to
handle claims from beneficiaries.
The
acronyms by which the contractors are known internally are almost a
parody of bureaucratic entanglement. Claim payments are handled by
Medicare administrative contractors, or MACs, which are generally
divisions of private insurers like WellPoint. Recovery audit
contractors, or RACs, concentrate on overbilling rather than outright
fraud. They include CGI Federal, the same organization that was
criticized for its work on HealthCare.gov.
Medicare
also employs zone program integrity contractors, known as the ZPICs
(pronounced ZEE-pix), that specialize in fraud. They include a unit of
Hewlett-Packard and a division of Blue Cross of Alabama. Even the
contractors have contractors to oversee them. And UPICs (YOU-pix), which
represent the combination of fraud contractors specializing in Medicare
and Medicaid, are coming.
The
decision to outsource major responsibilities has been a longstanding
source of frustration even to many of the agency’s officials. Ted
Doolittle, who worked as a deputy director at the Center for Program
Integrity and left in April, described fighting fraud through
contractors as being “almost reduced to working with a puppet. You’re
working the strings above.”
Former
and current law enforcement officials and people who have worked with
the contractors say there is little sharing of information among the
companies or even with the government.
The
recovery audit contractors, for example, do not report to the Center
for Program Integrity but to another division within Medicare. When they
pass on evidence of possible fraud, a rare occurrence, Medicare often
fails to follow up, according to a report by the Office of the Inspector
General.
Because
they are paid on a contingency basis, ranging from 9 to 12.5 percent of
the improper billing that they find, recovery audit contractors have
been criticized by hospitals as little more than bounty hunters. The
high number of hospital appeals has helped create a backlog of an
estimated two years for an administrative law judge to hear a disputed
case. After Congress halted some of the audits, Medicare suspended the
program until new contracts were awarded. This month, because the awards
are delayed, the agency began to allow a limited number of reviews.
The
integrity contractors have also been criticized, in part for their ties
to the companies responsible for paying claims, creating a significant
potential conflict of interest, according to a government report released
in 2012. The report also faulted Medicare for not having “a written
policy for reviewing conflict and financial interest information
submitted.” Medicare officials say appropriate procedures are in place,
and that the contractors are investigating providers, not the
organizations paying claims....
Trying to review the
system after its first year, the Office of Inspector General said
missing, inconsistent and possibly inaccurate information made it
impossible to know whether there were any savings. In a second report,
in June, the office said it could verify only $54 million in savings
from the new computer system, even though Medicare said it had
identified $211 million. A quarter of that amount was actually
recovered, according to the Office of Inspector General report."...
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The last paragraph of the NY Times article reveals the problem: No matter who's president or who controls the Senate, pathetic thug Senators like Orrin Hatch watch fraud go by for years, do nothing to stop it, just say it's "concerning:"
NY Times: "Senator Orrin G. Hatch, Republican of Utah, is among those in Congress
who have been skeptical of the system’s effectiveness. “It is concerning
that they have only found $54 million in adjusted savings in its second
year,” the senator said. “There is a difference between simply
identifying waste and actually taking steps to prevent and recover it.”"
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Comment: Everyone knows federal programs invite massive theft. Most accept it because they see what happens to those who speak out against adding more federal programs with built-in fraud: they're demonized as anti-government racists. Medicare is just one example. Fraud is common in federal government operations because there are no consequences for bad behavior. It's not their money so they don't care. This is true no matter who's president. They complain they need more taxes, they get more taxes either overtly or covertly by regulation, then allow the "revenue" to be stolen. This can't be explained except to call it what it is, organized crime. Why wouldn't you stop it if you could? Answer: You'd suffer serious consequences. This is what the Tea Party was originally about before it was co-opted in its crib.
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