Article - October 6, 2008 - Senior Journal

Medicare Getting Tougher on Fraud, Waste, Abuse and Will Ask for Help from Seniors

New contractors to review paid claims for all Medicare Part A and B providers to ensure claims meet statutory, regulatory and policy regulations

Oct. 6, 2008 -- After a successful demonstration project recovered over $900 million in overpayments by Medicare, the Centers for Medicare & Medicaid Services announced today a program it describes as "aggressive new steps to find and prevent waste, fraud and abuse in Medicare." And, you may be called on to help. Or, you may be questioned by a new national recovery audit contractor.

The effort appears to be aimed primarily at medical equipment suppliers and home health agencies. CMS says it is going to maintain a closer direct relationship with beneficiaries to be sure they received the equipment and services ordered and paid for by CMS.

CMS says working directly with Medicare beneficiaries is a shift in its traditional approach to fighting fraud.

They will not only communicate with beneficiaries to ensure they received the durable medical equipment or home health services for which Medicare was billed, but will also verify that the items or services were medically necessary.

CMS says it is also working closer with providers, consolidating its fraud detection efforts, and strengthening its oversight of medical equipment suppliers and home health agencies.

"Because Medicare pays for medical services and items without looking behind every claim, the potential for waste, fraud and abuse is high," said CMS Acting Administrator Kerry Weems.

"By enhancing our oversight efforts we can better ensure that Medicare dollars are being used to pay for equipment or services that beneficiaries actually received while protecting them and the Medicare trust fund from unscrupulous providers and suppliers."

National Recovery Audit Contractors

Another aggressive new change announced today is the launching the national recovery audit contractor (RAC) program.

CMS will also be using new "program integrity contractors" that will look at billing trends and patterns across Medicare. Their focus will be on companies and individuals whose billings for Medicare services are higher than the majority of providers and suppliers in the community.

Medicare is required by law to pay claims to health care providers for services provided to beneficiaries within 30 days after the claim is submitted, as long as the claim meets Medicare's rules. After the claim is paid, CMS or its contractors can review the claim to ensure that the items or services were actually provided or the services were medically necessary.

If the claim was not submitted under Medicare's rules, CMS checks to see if the claim was submitted in error or may be potentially fraudulent. Those claims that could be fraudulent are referred to law enforcement for further investigation.

Targeting Florida Home Health Agencies, equipment suppliers in some states

CMS also announced it will be taking additional steps to fight fraud and abuse in home health agencies in Florida and suppliers of durable medical equipment, prosthetics and orthotics (DMEPOS) in Florida, California, Texas, Illinois, Michigan, North Carolina and New York.

These additional steps include:

• Conducting more stringent reviews of new DMEPOS suppliers' applications including background checks to ensure that a principal, owner or managing owner has not been suspended by Medicare;

• Making unannounced site visits to double check that suppliers and home health agencies are actually in business;

• Implementing extensive pre- and post-payment review of claims submitted by suppliers, home health agencies and ordering or referring physicians;

• Validating claims submitted by physicians who order a high number of certain items or services by sending follow-up letters to these physicians;

• Verifying the relationship between physicians who order a large volume of DMEPOS equipment or supplies or home health visits and the beneficiaries for whom they ordered these services;

• Identifying and visiting high risk beneficiaries to ensure they are appropriately receiving the items and services for which Medicare is being billed.

The additional reviews that will be focused on DMEPOS equipment and supplies with high expenditures and high growth rates expect to identify items such as oxygen supplies and equipment, power mobility devices or power wheelchairs, and diabetic test strips.

For those claims not reviewed before payment is made, CMS is implementing further medical review of submitted DMEPOS claims by one of the new RACs.

The RACs review paid claims for all Medicare Part A and B providers to ensure their claims meet Medicare statutory, regulatory and policy requirements and regulations. If the RACs find that any Medicare claim was paid improperly it will then request repayment from the provider if an overpayment was found or request that the provider is repaid if the claim was underpaid.

The new national RACs can be found at www.cms.hhs.gov/RAC.

The new RACs were selected under a full and open competition and will begin to educate and inform providers later in October and November about the program.

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