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).

Florida Senators Move to Pass Bill to Prevent Medicaid Fraud

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Kaiser Family Foundation reports that Florida Senators will likely pass legislation aimed to prevent Medicaid fraud.

KFF states:

Florida Senate Health Regulation Committee Chair Don Gaetz (R) and state Senate Health and Human Services Appropriations Committee Chair Durell Peaden (R) at a news conference on Wednesday “expressed confidence” that lawmakers will pass legislation (SB 1986) aiming to prevent and detect Medicaid fraud, the Tallahassee Democrat reports. Medicaid fraud has become a considerable issue in Southeast Florida, where home health care clinics open quickly and operate with little to no regulation or accountability, according to Gaetz and Peaden. Miami alone has twice as many home health providers than all of California, they noted.

Florida is susceptible to heightened Medicaid abuse given its relatively large Medicaid enrollment and the concomitant funds devoted to Medicaid.  In 2005, Medicaid enrollment in Florida was almost 3 million people.  In Florida, Medicaid home health participants have increased by approximately 50% between 1999 and 2005 (from 14,793 in 1999 to 21,192 in 2005). In 2006, Florida spent approximately $12.7 Billion on Medicaid.  Approximately $1.5 billion of the $12.7 billion was spent on home health and personal care.  In 2007, Florida Medicaid expenditures increased to over $14 Billion.

In addition to other fraud prevention and detection measures, the bill would also create greater incentives for whistleblowers.  KFF states:

The bill also would increase to 25% the share of recovered money that whistleblowers would be eligible to receive. Peaden said money recovered from fraud would be redirected by his panel “into health care for the truly needy.”

Further, KFF reports:

The bill also would target companies’ recruiting of patients and the practices of filing claims for non-existent patients and ordering unneeded devices and treatments. Gaetz said Florida would work with federal and local agencies to create a database that would prevent operators of fraudulent companies from re-incorporating new clinics or home services and allow regulators to prevent fraudulent companies from renewing their operating licenses. Peaden said a companion bill is being worked out in the state House (Cotterell, Tallahassee Democrat, 3/26).

As we noted recently, a Florida case (Federal Court) which would fall rather squarely within the intended aim of the proposed legislation took 10 years to discover and prosecute.  The Florida legislation is similar in purpose to the Federal Civil False Claims Act, which members of  the U.S Senate have proposed to amend to strengthen a whistleblower’s action as well.

Pilot Program Seeks to Educate Patients, Prevent Illness, and Save Billions

A pilot program aimed at reducing Medicare costs by “stopping the revolving door of hospital admissions by some chronically ill elderly” is taking shape in Baton Rouge, Louisiana.  According to the Baton Rouge Advocate, the program, called the Care Transitions Project, could be a model for U.S. health care reform if it is successful in Baton Rouge and 13 other participating communities.

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The program seeks to provide patients and caregivers with information before they leave the hospital in order to prevent problems that could lead to readmission.  Fundamental to the program is the use of a “transition coach” who helps the patient put together a list of questions for their primary care physician, discusses questions about medications, and puts together a plan for “self-care.”  This allows the patient to be mindful of preventive measures and symptoms to be on the lookout for.

The patient signs a consent form in which they agree to meet with the transition coach before leaving the hospital and again within 48 hours of leaving. There is an additional follow-up at a week, two weeks, and a month.

Gary Curtis, head of Louisiana Health Care Review, says that:

In Louisiana, two out of every 10 chronically ill elderly patients are back in the hospital within 30 days of their release.

However, the problem is not confined to Louisiana.  According to statistics from the Centers for Medicare and Medicaid Services,

Nationally, the readmissions and subsequent treatment contribute to a $12 billion annual increase in Medicare costs.

Other communities engaging in the pilot program include Denver, Colorado and Miami, Florida.  Click here for more information about the Care Transitions Program.