CMS has successfully implemented two oversight projects to prevent improper payments resulting from fraud, abuse, or poor documentation of the services rendered. One focusing on claims for infusion therapy and the services of independent diagnostic testing facilities (IDTFs) in Miami and Los Angeles has saved more than $2 billion in Medicare claims since October 2004. Another project using special software edits to scrutinize fee-for-service claims reduced the payment error rate from 5.2 percent in 2005 to 4.4 percent in 2006, a $1.3 billion reduction in improper payments.
Reduction of erroneous payments. CMS also has stepped up its efforts to find and prevent improper payments due to insufficient documentation or other errors not amounting to fraud or abuse. In 1996, the first year that improper payments were reported, 14.2 percent of Medicare fee-for-service payments were incorrect. In 2005, improper claims had been reduced to 5.2 percent, and in 2006, the improper payment was down to 4.4 percent, a savings of $1.3 billion. CMS has worked with the contractors to apply the data collected to improve system edits, update coverage policies, and direct provider education efforts. In addition, CMS has developed national and state-specific models for predicting inpatient-hospital payment errors to study the areas prone to payment error. "Because we are able to measure the accuracy of payments more closely now, we are able to target our efforts more effectively with Medicare contractors and providers," said Dr. Mark McClellan, Administrator of CMS.
Senator Charles Grassley (R. Iowa), Chair of the Senate Finance Committee, praised CMS' efforts. "Every dollar that's misspent is a dollar that's not providing care for beneficiaries. Today, …, we see a major reduction and that deserves recognition."
Review of IDTFs. In 2006, CMS expanded its satellite offices in Miami and Los Angeles, providing additional on-the-ground efforts to identify and report fraud, waste and abuse in Medicare. The Miami office has cooperated with state officials in a federal/state task force on abuses by independent diagnostic facilities, investigating complaints and using site visits, record reviews, administrative actions and data analysis. Together, CMS and the Florida agencies have referred 400 criminal investigations to law enforcement authorities, revoked the licenses and billing privileges of clinics and practitioners, and added edits to the claims system to "auto deny" claims for medically unbelievable services and flag high-volume claims for particular services. The U.S. Department of Justice has begun 63 criminal cases and 38 civil cases involving Medicare fraud since October 2005.
According to CMS, an initiative targeting identity theft in South Florida involving 2,500 beneficiaries saved $600 million. In addition, revoking the provider numbers of more than 500 Durable Medical Equipment suppliers resulted in a drop in Medicare billing from $93 million in 2004 to $16 million in 2005 and in Medicare payment from $74 million to $13 million in the same period
The Los Angeles office revoked the billing numbers of 117 providers who had presented false claims or suspicious business operations, saving $200 million. Editing the system to stop payment on claims using billing numbers from deceased providers saved another $4 million. Targeted efforts against independent diagnostic testing facilities resulted in revocation of the billing privileges of 83 IDTFs and denied $445 million in claims for "beneficiary sharing."
CMS has hired Medicare Integrity Contractors ("MEDICS") to concentrate on fraud and abuse in the prescription drug program. Three regional contractors will use innovative data analysis to weed out duplicate claims for drugs under both Part D and Part B, for example. A fourth national contractor will help CMS develop a centralized data base.
CMS will release its annual report on improper payments in November.
SOURCE: CMS Releases, Oct. 11 and 12, 2006, Release from Senator Charles Grassley, Oct. 12, 2006.
For more information on this and related topics, consult the CCH® Medicare and Medicaid Guide.
Visit our News Library to read more news stories.
