American People's Online Health Summit

U.S. Senator Tom Coburn, M.D.

Eliminating fraud is an issue members of both parties could have found agreement on long ago.

While we can disagree about the size and scope of government-run health care programs, no one wants to see taxpayer dollars gratuitously wasted.  Yet, that is exactly what has been happening in health care for years.

I’m confident fraud constitutes at least $100 billion or about 13 percent of annual Medicare and Medicaid spending.  As a practicing physician, my experience tells me that figure could be much higher.  Harvard's Dr. Malcolm Sparrow, author of “License to Steal,” estimates that annual losses from fraud could easily be in the 20 percent or 30 percent range, even as high as 35 percent.

Others dispute that claim but the debate about numbers itself reveals a major part of the problem: the government that administers these programs has no idea how many billions are lost due to fraud.

The first reform should be for government to measure losses to fraud and report them accurately.  Second, Congress should look to the credit card industry as a model of fraud containment.  In that $2 trillion industry, fraud is one-tenth of one percent while fraud in Medicare and Medicaid at least 100 times higher.

Finally, we have to acknowledge that fraud exists, in part, because doctors and others want to game a system that has been distorted by government intrusion.  Less government will equal less fraud.  Policymakers won’t agree on that point but we can, and should, agree to take serious common sense steps to limit this enormously expensive problem.

U.S. Senator Tom Coburn, M.D. (R-OK), a practicing physician, is the author of the Patients' Choice Act (S. 1099) along with U.S. Senator Richard Burr (R-NC) and U.S. Representatives Paul Ryan (R-WI) and Devin Nunes (R-CA).

 

U.S. Rep. Dave Reichert

AARP's Hidden Profit Motive in Health Overhaul Threatens Seniors' Care

It seems every day brings with it new tales of phony Medicare claims that jeopardize seniors’ health care benefits and cost taxpayers billions of dollars.  Rather than reducing premium costs or providing preventative screenings, nearly $60 billion each year goes to a vast network of conspirators that charge Uncle Sam for fictitious treatments, fake medical equipment, and even prosthetics for the deceased.  Medicare fraud is so rampant that it now literally costs taxpayers an arm and a leg.

Those who profit from Medicare at seniors’ and taxpayers' expense include more than just crooks submitting phantom bills.  That’s why I launched an investigation to determine whether the AARP, which claims to be the nation’s largest advocacy organization for seniors, has a hidden profit motive in supporting the health care overhaul bill that cuts $156 billion from Medicare and eliminates health plans for 14 million seniors.

I believe there is a direct conflict of interest  between the AARP’s advocacy for legislation that slashes the Medicare Advantage program in which millions of seniors participate and the sale of AARP-sponsored Medigap plans.

It's no coincidence that AARP receives more than half of its annual revenue – $652.7 million – from royalties collected on the sale of these plans that fill the void left by the very health program AARP wants to eliminate.

I am continuing to demand answers from the AARP to ensure that our seniors receive the health benefits they expect and deserve.  To learn more about my investigation or share your thoughts, click here.

Congressman Dave Reichert (WA-08), a 33-year veteran of law enforcement, is a Member of the House Ways & Means Committee and a staunch advocate for eliminating waste, fraud, and abuse in federal health programs.

Tom McGraw

Healthcare fraud is big business and claiming abuse is rampant.  Many of the approaches proposed by the Center for Health Transformation have proven effective at addressing components of fraud and abuse with individual Medicaid programs or specific Medicaid or Medicare health plans, but these approaches need to be combined if a comprehensive program of prevention, detection and mitigation is to realize the benefits of greatly reduced fraud and abuse.  Point of service validation of eligibility through biometrics has proven extremely effective at addressing card sharing issues in several states.  On-site validation of providers, prior to any payments being made, can be highly cost effective for certain types of providers. Catching improper claims through comprehensive claims editing and predictive modeling with clinical and comparative components has proven very effective and has been implemented in a way that minimizes provider disruption through unneeded delays and excessive medical records requests.  Spike analysis to monitor billing pattern changes has caught the “providers” in business just for the purpose of making money through fraud.  Post-payment fraud review, driven by advanced analytics and investigative expertise, has been effective in identifying fraud rings and sophisticated approaches to fraudulent claiming that cannot be detected prior to claims payment.  

 

On third party liability, Medicaid can only truly be the payer of last resort if insurance coverage is identified up-front.  States are realizing that this identification can and must be done better than it has historically been done.

 

Tom McGraw, Senior Vice President of Government Program Integrity for Ingenix, has over 15 years experience working with Medicaid and Medicare and leads a team that works with Medicare and Medicaid health plans and state Medicaid programs on fraud and abuse.

U.S. Rep. Michael C. Burgess, M.D.

The federal government has not done enough to address the issue of Medicare fraud for years, even as reports indicate that our nation’s government-run health care system – which includes Medicare and Medicaid – needlessly wastes hundreds of billions of dollars each year through waste, fraud, and abuse.  In Medicare, the government pays providers in practically an automatic fashion, without review or scrutiny of the claim submitted.  The ease at which Medicare pays claims leaves the door wide open for deceptive practices by those with a Medicare provider number.  In North Texas, a woman running a so-called home health agency is now behind bars.  Records show Medicare paid her $8,277,719.30 over two years to care for homebound patients. The woman’s patients included a man seen moving furniture, a lady seen running errands, and a man seen enjoying barbeque. Somehow they all qualified for home health care coverage, courtesy of the federal government.  Would it not be better to put in place requirements that seek to ensure that all claims submitted for reimbursement are reviewed for accuracy to ensure that a diagnosis matches the procedure used to treat a particular ailment?  Right now it is far too easy for criminals to request and receive billions of federal dollars through health care fraud, so the federal government must take the needed actions to ensure that Medicare funding, for example, is not wasted or fraudulently misdirected.  This is a serious problem that is in need of serious attention now to reclaim scarce health care dollars from criminals and crooks and prevent future fraud. 

Congressman Michael C. Burgess, M.D., is a member of the House Energy and Commerce Committee and its subcommittee on Health, and in 2009, Burgess founded and is chairman of the Congressional Health Care Caucus.  Prior to becoming a member of Congress in 2002, Congressman Burgess practiced medicine in North Texas for over 25 years.

Merrit Quarum, M.D.

As described in Chapter 9 of Stop Paying the Crooks, Qmedtrix continues to identify providers who use fraudulent billing practices to generate improper charges.  A recent case involved a California facility that withdrew a $78,000 lien claim, accepting $0 additional payment after learning that Qmedtrix reviewed the bill. Qmedtrix had identified various fraudulent charges, including ‘operating room services’ billed at a minimum of $4,400 per hour (consistent with open heart surgery) although the procedure was an epidural injection, not an actual surgery, ‘treatment room’ charges despite the fact that no treatment was provided other than the injections performed in the OR, and charges for both an ‘epidural tray’ at $156 and ‘tray-epidural’ at 123.50. This is fraudulent on multiple levels. First, the hospital used two prices for this one supply. A hospital is expected to charge all payers the same (one) charge master price for any service or item.  Second, this double-billing exemplifies the hospital’s practice of generating charges based not on the services and items provided, but on a template that includes everything that might be necessary for treatment of the patient’s diagnosis. While use of such templates or “super-bills” is common, providers must remove charges for items or services that were not actually provided before submitting the bill.

 

Our next case? A provider challenging a Qmedtrix review will have to explain why the bill for a shoulder surgery includes a charge for six 10cc vials of xylocaine--a dose that would have killed the patient!

 

 Dr. Merrit Quarum is the CEO of Qmedtrix Systems, Inc and a nationally recognized expert on healthcare billing, reimbursement and fraud.

Scott P. Serota

Blue Cross and Blue Shield is committed to doing our part to eliminate healthcare fraud, which costs our nation as much as $68 billion annually. The 39 Blue companies and our 600 anti-fraud experts teamed with law enforcement to save our 100 million customers nearly $350 million in savings and recoveries in 2008.  We recognize combating healthcare fraud requires collaboration among multiple stakeholders and we are strongly supporting policy proposals to promote these partnerships, including:

• Strengthening public-private partnerships.  We support increased cooperation and information sharing among private and public entities, especially strengthening local or regional task forces that enable private insurers, law enforcement, and attorneys general to work collaboratively.
• Dedicating fraud investigation personnel.  Federal law enforcement agencies should have dedicated health agents in all their offices (e.g., FBI, HHS, OIG).  Rotating agents into healthcare for a short period of time leads to confusion, inexperienced representatives and the need for frequent training of new staff -- all of which diminish resources that could be used to combat fraud.
• Increasing funding for federal enforcement activities. Additional funding for dedicated federal, state, and local law enforcement and insurance fraud investigative and prosecutorial resources is essential.
• Integrating private sector government program dollars (Parts C and D and Medicare Supplemental) into federal cases. The government should incorporate into its settlements the private component of federal program dollars. The DOJ should also share information about fraud schemes and support for such investigations with private entities so they can better coordinate to combat fraud.

 

Scott Serota is President and Chief Executive Officer of the Blue Cross and Blue Shield Association, a national federation of 39 independent, community-based and locally operated Blue Cross and Blue Shield companies. The Blue System is the nation's largest health insurer covering nearly 100 million people – one-in-three of all Americans.

Barry L. Johnson, D.D.S.

It’s HealthCare Insight’s business to identify fraudulent providers and claims in order to prevent our clients from paying suspect claims in the first place.  This prevention-focused model is more successful than the pay-and-chase model used by almost all government programs, including Medicaid, Medicare as well as most commercial payors.  Both pre-payment and retrospective techniques successfully identify fraudulent and abusive providers and claims, consequently saving billions by preventing inappropriate payments or by recovering payments made to fraudulent providers.  It is far more efficient and effective to avoid paying a false claim in the first place, but this requires a pro-active and more sophisticated process.  In an industry that has traditionally relied on post-payment data mining to identify fraudulent claims and those who submitted them, it’s crucial to change to a pre-payment model.

More importantly, it’s necessary to demand responsibility from all entities that disperse health care dollars on behalf of consumers.  Our ability to identify fraud and abuse has far out-paced the resolve of health care organizations and the government to enforce penalties on those providers who perpetrate the fraud.  Unless it rises to the level of multi-million dollar schemes, most fraud goes unpunished and ignored.  Until the industry forces accountability linked to meaningful punishments directed to every habitually careless or dishonest participant in the claims submission and payment process we will not be able to control or prevent this continual waste of resources.  Patients and consumers also can be enablers or participants in health care fraud and we too must resolve to do our part to stop this waste and abuse. 

Barry L. Johnson is a founding partner of HealthCare Insight (HCI), a division of Verisk Health and part of the Verisk Analytics business segment devoted to decision analytics. He has served as President and Chief Executive Officer of HCI since January 2001.

U.S. Senator George LeMieux

A leading contributor to the rising costs in health care is money wasted or paid to criminals. Every year we lose an estimated $60 billion to $226 billion through waste, fraud and abuse.  

While we might not all agree on the mechanisms for health care reform, we can all agree that broken programs wasting taxpayer money need to be fixed.

The American people would be shocked to know how little is done to prevent health care fraud. Currently, the federal government takes a “pay and chase” approach, paying claims as they come, and then trying to recover wasted taxpayer funds later.

The solution is a three-pronged approach that would stop a majority of fraud before the government sends money out the door. My bill (S.2128) creates a team within the Department of Health and Human Services (HHS) led by a Chief Health Care Fraud Prevention Officer whose sole responsibility will be to fight fraud. The bill requires HHS to use the same technology credit card companies use to fight fraud – meaning if a transaction looks suspicious, someone checks it out before the claim is paid. Finally, the bill requires background checks for those providing services and supplies. Making certain the government knows it is dealing with legitimate providers protects the integrity of care while rooting out those seeking to scam the system.

I am asking President Obama and Congressional leaders to include these elements in any substantial health care reform proposals. I encourage you to visit http://tinyurl.com/ylfxlrg to read more about why and how we need to address this critical problem.

George LeMieux is a native Floridian. He currently serves on the Armed Services Committee, the Commerce, Science & Transportation Committee, and the Special Committee on Aging. In late October, Senator LeMieux introduced his first piece of legislation, Senate bill 2128, the Prevent Health Care Fraud act of 2009. The bill seeks to recover the billions that are lost to health care waste, fraud and abuse each year.

Speaker Newt Gingrich

Why raise taxes on honest, hardworking Americans, cut benefits for honest senior citizens, or penalize honest doctors and hospitals when our Medicare and Medicaid systems bleed many billions of dollars to criminals every month? Fortunately, the American people agree. In a July 2009 Zogby poll, 88 percent of Americans chose “eliminate fraud” as their preferred way to pay for modernizing our healthcare system. “Standardize administrative forms” was second at 77 percent and “reduce medical errors” came third at 72 percent.

At the Center for Health Transformation, we have a section on our website entitled “Fraud in the News” where we welcome your contributions. It is updated almost daily with the most recent news stories of criminals stealing from our healthcare system. It gives the reader the right flavor for just how vulnerable we all are. And it is very safe to assume that stories in the news represent only a tiny tip of the iceberg of all the fraudulent activity that occurs. This is at least part of the reason why Americans believe that 50 cents of every federal dollar spent is wasted.

I am pleased with the attention now being paid to healthcare fraud. But there is much more work to be done. I look forward to the discussion on today’s blog and beyond. While discussions of the scope of healthcare fraud are interesting, it is my hope we can remain focused on specific solutions as outlined in the question above and in our book “Stop Paying the Crooks.”

Newt Gingrich is Founder of the Center for Health Transformation and former Speaker of the House of Representatives from 1995-1999.

Georgia State Senator Judson Hill

Addressing fraud throughout our government healthcare system must be a high priority. At a time when all Americans are cutting back and thinking twice about spending every penny, to have crooks stealing their hard earned taxpayer dollars in our government health care programs is not acceptable.  To root out fraud in Medicare and Medicaid its necessary to shine a light on spending and irregular spending patterns and impose harsh penalties on those caught stealing.  Americans have a right to know that their government health care programs, as well as any other government program, is not being abused. In Georgia I recently introduced Senate Bill 398 http://www.legis.state.ga.us/legis/2009_10/sum/sb398.htm to impose tough penalties and to require more transparency in Medicaid in Georgia. State and national leaders at every level must place a high priority on insuring the integrity of these government programs. We owe it to those we serve.

Senator Judson Hill has led the nation with common sense state-based free market health care reform measures as a leading conservative voice in the Georgia Senate.

Craig Smith

The staggering amount of fraud, abuse and waste in our government health care programs threatens the future of health care for all Americans. The most effective fraud prevention techniques are those that keep the fraud from occurring in the first place.  The federal government's historical "pay and chase" approach to health care fraud is not effective.  As explained further in Stop Paying the Crooks, one of the most effective ways for the Medicare program and Medicaid programs to prevent fraud is to improve the provider enrollment screening process.  Despite misconceptions, there is no constitutional right for individuals or entities to become Medicare or Medicaid providers.  The Supreme Court has made it clear that when the government is acting as a market participant as opposed to a market regulator, government can attach conditions to its expenditure of funds, including conditions that limit the number and qualifications of vendors who may participate.  Today, there are individuals who become enrolled providers and then treat their Medicare or Medicaid billing numbers like their own personal ATM card, except they have no withdrawal limits on our taxpayer dollars.  When private health plans discover these fraudsters, they quickly terminate them from their participating provider networks.  Moreover, private health plans do a much better job than traditional fee-for-service Medicare of deciding which providers are approved to join the network in the first place based on the network participation needs in each geographic area, as well as the qualifications of the individual provider.  Unless our government significantly improves its process for determining which providers are enrolled and stay enrolled, it will be very difficult to reduce fraud, abuse and waste significantly.

 

Craig H. Smith is a partner with Hogan & Hartson LLP and a Board Certified Health Care Lawyer.  He formerly served as the General Counsel of Florida's Agency for Health Care Administration, which regulates more than 32,000 health care facilities and operates one of the nation's largest Medicaid programs under an annual budget in excess of $17 billion.

Sreedhar Potarazu, M.D.

In the current national debate over improving health insurance coverage access and affordability, many advocates of change suggest that restraining costs will require us to eliminate the waste, fraud and abuse in the system in order to deliver only those healthcare services that are appropriate.  In an environment that relies very heavily on human action to process millions of claims annually, helping to curtail waste made in error could save a significant sum of money.  Recent national organizations and government agencies have estimated that fraud, abuse, and waste run between 3 and 10 percent of total healthcare expenditures. ^1,2

“Other sources estimate avoidable healthcare waste as high as 30%, so there is no doubt that reducing  fraud and abuse can save the system, payers, and employees significant sums.” said Jim Benefiel, Solutions Director, at VitalSpring Technologies.

 

• The Centers for Medicare & Medicaid (CMS) reports improper Medicare and Medicaid payments have amounted to more than $50 Billion between FY 2008-2008;
• In 2005, The New York Times reported that since the inception of Medicaid, New York’s state healthcare program has “become a $44.5 billion target for the unscrupulous and the opportunistic.”⁴

 

Waste is Endemic

There is a myriad of ways a provider can submit a claim that contains a request for payment that is unsubstantiated.  These include, but are not limited to:

• “Excessive or unnecessary treatments;
• Charging for a serviced more expensive that the one provided;
• Charging for services that were not provider or duplicating charges;
• Collection from multiple policies (payers) for the same service.”³

 

The use of technology based platforms designed to reduce improper payments have helped commercial companies retain substantial funds.  “Today, many payers feel tremendous pressure to cut back on these efforts in the misguided belief that such efforts do not offer a significant level of ROI for the investment necessary.  Other large employer payers have only minimal efforts in place. Our experience has been that efforts to reduce improper charges can recoup 4 to 10 times the cost of a rigorous, but reasonable program,” Benefiel advised.