3-10% of Health Care Funding Lost to Fraud Each Year
As lawmakers scramble to devise ways to fund the health care overhaul, a recent estimate from the Federal Bureau of Investigation shows there may be a cool $75-$250 billion floating about in the health care system.
It may not be easy to recoup, but that’s the amount that could be saved each year by eliminating fraud and abuse in public and private health care programs. The estimate, which appears as part of an article published by HHS OIG chief counsel Lewis Morris in the latest issue of “Health Affairs” (September/October 2008, Vol. 28, No. 5) also means that roughly 3-10 percent of total health spending is wrongfully siphoned away by fraudsters.
Given that Medicare is expected to cost the federal government $503.1 billion in fiscal year 2009 (and Medicaid is anticipated to cost federal and state governments $386 billion), these numbers make clear that health care fraud is not just committed by a few scattered criminals masquerading as health care providers. Instead, such fraud is pervasive and extends all the way from Pfizer boardrooms to infusion clinics.
While combating such fraud may seem daunting, the article identifies several ways in which fraud can be controlled:
Five ways to combat health care fraud after the jump:
- The government should scrutinize individuals and entities that want to participate as providers and suppliers, BEFORE they enroll. During an ABA Health Law Section Conference in June, Morris stated that if a provider applies for a new National Provider Identifier (NPI) number, Medicare usually does not conduct a thorough background check on the individual. The reason is to help ensure that everyone gets a “fresh start.” While this would be fine in a perfect world, it doesn't exactly work in a system where people can – and do – get away with billions of dollars in taxpayer money each year for providing bogus services or, worse, no services at all.
- Ensure payment methods are responsive to changes in the marketplace, such as not shelling out big bucks for a once-costly and innovative procedure that is now inexpensive and commonplace.
- Assist providers and suppliers in adopting practices that promote compliance.
- Monitoring programs for evidence of fraud, waste and abuse. Interestingly, the article notes that the U.S. government tends to take a “pay first, ask questions later” approach to reimbursing providers for health care services – i.e. abusive billings are only identified through retrospective analysis after it has paid the claims. Instead, the government should use technology to help identify improper claims BEFORE they are paid, such as making sure the same service is not paid for twice, etc.
- Respond quickly to detected frauds and deter others. For example, the use of Health Care Fraud Prevention and Enforcement Action (HEAT) teams to catch Medicaid fraud has been met with success; Since the inception of Strike Force operations in March 2007 through August 2009, the Strike Force has obtained indictments of more than 293 individuals and organizations that collectively have billed the Medicare program for more than $680 million.
