Crackdown on Fraud and Abuse in Detroit, Miami Signals Health Care Reform as a Priority of the Obama Administration
Filed under: Fraud & Abuse, Medicare & Medicaid, Obama Administration
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Federal agents arrested dozens of people in Miami and Detroit yesterday morning for allegedly submitting Medicare claims totaling $50 million for treatments that were unneeded and sometimes never provided, according to The Washington Post.
Later in the day, the Justice Department unsealed criminal indictments against 53 people in connection with the arrests. In Detroit, the indictments focus on costly HIV/AIDS infusion drugs as well as physical and occupational therapy treatments.
According to The Post,
Authorities filed criminal charges against patients, doctors, medical assistants and company owners who allegedly played complicit roles in the fraud schemes. Prosecutors are seeking forfeiture of the criminal proceeds and restitution to the Medicare program.
The action was announced at a news conference held by Attorney General Eric H. Holder Jr., Health and Human Services Director Kathleen Sebelius, and FBI Director Robert S. Mueller III.
We will strike back against those whose fraudulent schemes not only undermine a program upon which 45 million aged and disabled Americans depend, but which also contribute directly to rising health-care costs,
said Attorney General Holder.
HHS OIG Report Finds “High Risk” of Medicare Fraud in South Florida
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A report released Tuesday by the HHS Office of Inspector General identifies South Florida as “a high risk area for fraudulent billings to Medicare” by suppliers of durable medical equipment. According to the report, South Florida accounts for 17% of Medicare’s total spending on inhalation drugs, but is home to only 2% of the nation’s Medicare beneficiaries.
While warmer climates are known to cause a variety of respiratory problems, that alone does not explain the “aberrant claim patterns” identified in the report.
In 2007, Medicare spent $143 million on claims for costly drugs to treat respiratory ailments in Miami-Dade County.
That’s 20 times more than the amount Medicare spent in the Chicago area, which has twice as many beneficiaries,
reports the Miami Herald.
The Herald explains the root of the alleged abuse is that two-thirds of the patients in South Florida listed on Medicare claims for expensive inhalation drugs did not have office visits with the physician who prescribed the treatment in the previous three years.
Additionally, medical equipment suppliers and pharmacies are alleged to have recycled the offending doctors’ names for ongoing patient billing, and billed far beyond the Medicare guidelines for inhalation drug therapy. As a result, the Herald says,
Medicare has spent five times more per patient on inhalation drugs in South Florida than the rest of the country — $4,400 versus $815 per beneficiary[.]
Read the HHS Office of Inspector General’s full report here (PDF).
Home Health Area Especially Vulnerable To Medicare Fraud And Abuse
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American Health Lawyers Association reports that the increased amount of federal spending on home health benefits has led to the rise of fraud and abuse issues. AHLA reports that federal “spending on home health grew approximately 44% from 2002 through 2006 ….”
AHLA states:
Gaps in the Centers for Medicare and Medicaid Services’ (CMS’) administration of the $12.9 billion Medicare home health benefit have left the program vulnerable to improper payments, including payments for claims resulting from fraudulent and abusive practices, the Government Accountability Office (GAO) found in a recent report.
The opportunities for fraud and abuse issues concerning home health care are manifold. AHLA states that the “common types of upcoding and billing for unnecessary care in home health were: billing for outlier cases when that level of care was not required, billing for beneficiaries who were not homebound, and billing for therapy visits that may have been medically unnecessary. ”
The Department of Justice defines upcoding as “the practice of improperly assigning a diagnosis code to a patient discharge that is not supported by the medical record for the purpose of obtaining a higher level of reimbursement for that hospital discharge than the hospital would otherwise receive.”
AHLA also reports that Home Health Agencies (HHAs) “are not routinely subject to revalidation and that CMS generally does not include physicians, who are in a position to detect certain types of improper billing, in the agency’s efforts to detect improper payments.”
AHLA reports that CMS is considering adopting two of the four actions recommended by GAO:
CMS stated that it would consider two of GAO’s four recommendations–to amend regulations to expand the types of improper billing practices that are grounds for revocation of billing privileges and to provide physicians who certify or recertify plans of care with a statement of services received by beneficiaries. The agency “neither agreed nor disagreed with our other two recommendations,” GAO explained.
AHLA reports that the four recommendations for CMS are:
- Assess the feasibility of verifying the criminal history of all key officials named on an HHA enrollment application.
- Provide physicians whose identification number was used to certify or recertify a plan of care with a statement of services the HHA provided to that beneficiary based on the physician’s certification.
- Direct CMS contractors to conduct post-payment medical reviews on claims submitted by HHAs with high rates of improper billing identified through prepayment review.
- Amend current regulations to expand the types of improper billing practices that are grounds for revocation of billing privileges.
Family-Run Medical Equipment And Billing Companies Enterprise Lead To Prison Time
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The Miami Herald reports that Laura and David Hernandez, as well as other family members, were sentenced by U.S. District Judge Adalberto Jordan for running a fraudulent Medicare operation.
The Herald states:
Over the past decade, the family-run enterprise of medical equipment and billing companies submitted more than $17 million in false claims to Medicare, they admitted in court.
Their total take: about $6 million.
The family-run enterprise started as a sole medical equipment company and later transformed into “a string of equipment businesses in Miami-Dade.” David Hernandez, a Cuban immigrant who is said to have completed formal schooling up to only the ninth grade, was the mastermind of the conspiracy:
David Hernandez, in the lead role, recruited four people to register as the official owners of four equipment-supply companies to conceal his participation in the scam, according to the court statement. Those ”nominee” owners, members of another family, were charged in a separate Medicare fraud indictment.
HHS OIG Report Finds Part D Private Insurers Overcharged for Billions, Lack of CMS Oversight
Filed under: CMS, Drug Pricing, Drugs & Medical Devices, HHS
Christopher Crumpet's Playmate (1955 UPA), Courtesy of Cartoonmoderntumblr.com
According to a recent report by the Department of Health & Human Services, Office of Inspector General, private insurance companies that operate plans under the Medicare prescription drug benefit have overcharged Medicare beneficiaries and the program by several billion dollars since the program began in 2006.
According to the report, 80% of health insurers that operate plans under the Medicare prescription drug benefit overcharged the program by about $4.4 billion in 2006 alone. In addition, The McClatchy/Raleigh News & Observer reports that the Centers for Medicare & Medicaid Services (CMS) remains unaware of the total impact of the practice because of its failure to perform required audits.
