Archive for Medicaid
If you’ve had experience with Medicaid Integrity Contractors (MIC), we want to hear from you!
If you are interested in sharing your experience or story, and possibly participate in a live audio conference on the MICs, please e-mail Andrea Kraynak at
akraynak@hcpro.com for more information.
Thank you!
A report published by the George Washington University Medical Center,
Health Insurance Fraud: An Overview, states that the healthcare fraud problem is not specific to public insurers (i.e., Medicare and Medicaid). According to the report’s authors, Sara Rosenbaum, Nancy Lopez, and Scott Stifler, private insurance providers are just as susceptible to fraud as Medicare and Medicaid.
The report states, “What is absolutely clear from virtually every reliable source on the subject is that healthcare fraud is a systemic problem affecting public and private insurers alike, in the individual market, the employer-sponsored group market, and public programs.”
The report also states that medical providers commit 80% of healthcare fraud, consumers commit 10%, and a combination of insurers and their employees commit the final 10%.
The report’s authors argue the reason Medicare and Medicaid appear to be more susceptible to fraud and abuse is because those programs cover the elderly, women, minorities, the less educated, and the poor, who are also the most vulnerable to fraud.
On May 20, Attorney General Eric Holder and HHS Secretary Kathleen Sebelius announced the government's latest tool in the fight against healthcare fraud and abuse—The Health Care Fraud Prevention and Enforcement Action Team (HEAT).
With what appears to be an intended pun, Sebelius said in an HHS press release, "Today, we are turning up the heat on perpetrators who steal from the taxpayers and threaten the future of Medicare and Medicaid."
The HEAT team will consist of senior Department of Justice and HHS employees. Their task will be to strengthen existing fraud prevention tools and investigate new ways to root out and prevent fraud, which, according to Office of Inspector General Chief Counsel Lewis Morris, accounts for about 3%—or more than $60 billion—of the government's annual healthcare investment.
The team will build on demonstration projects created by the HHS Inspector General and the CMS that focus on the vulnerable durable medical equipment (DME) industry. This includes:
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Increasing site visits to potential suppliers to prevent imposters from posing as legitimate DME providers
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Increasing training for providers on Medicare compliance, and offering providers the resources and the knowledge they need to help identify and prevent fraud
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Improving data sharing between CMS and law enforcement to identify patterns that lead to fraud
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Strengthening program integrity activities to monitor and ensure Medicare Parts C (Medicare Advantage plans) and D (prescription drug programs) compliance and enforcement
Holder and Sebelius also announced the expansion of the Medicare Fraud Strike Forces. Since their inception in 2007, the Medicare Fraud Strike Forces have recovered more than $240 million in fraud and abuse cases in South Florida and Los Angeles. The targets for the latest expansion are Detroit and Houston.
The creation of the HEAT team, the expansion of the Medicare Fraud Strike Forces, and the creation of a new healthcare fraud hotline (www.hhs.gov/stopmedicarefraud or 1-800-HHS-TIPS) continue President Barack Obama's push for greater healthcare fraud enforcement. Obama has made strengthening the integrity of the Medicare and Medicaid programs a priority for 2010, allotting $311 million of the $3.4 trillion budget on healthcare fraud and abuse prevention.
The United States, along with 16 states, is joining two whistleblower cases filed against pharmaceutical giant Wyeth for allegedly failing to pay millions in Medicaid rebates, according to
a Department of Justice (DOJ) release.
According to the release, between 2000 and 2006, Wyeth gave large discounts to hospitals that purchased Protonix Oral and Protonix IV as a package deal. The DOJ assumes this was done so Wyeth could gain a foothold in the lucrative outpatient medication market. The logic being, patients who received the intravenous version of the stomach acid suppressant (Protonix IV) would also use the oral version once they were discharged.
The problem is Wyeth failed to extend the discount to Medicaid agencies. According to the release, Wyeth knowingly hid the discount program from the Medicaid program in order to avoid paying hundreds of millions in rebate payments, which it was required to pay under the Medicaid Drug Rebate Program.
The announcement comes a week after Cuomo declared the NYMFCU recovered more than $263 million in civil damages and criminal restitution in 2008, doubling the totals from 2007.
“The New York MFCU's statistical and monetary recovery achievements, in fiscal year 2008, were outstanding and are deserving of special recognition,” HHS stated in the release.
NYMFCU will receive the award June 2 at a ceremony in Washington, D.C.
On May 5, Tampa-based WellCare Health Plans, Inc. agreed to enter a deferred prosecution agreement (DPA) with the Department of Justice (DOJ) and pay $80 million in restitution and forfeiture to avoid healthcare fraud charges.
After an investigation, more than 200 special agents and investigators from the FBI, OIG, and the Florida Medicaid Fraud Control Unit raided WellCare offices, according to a
DOJ release.
The investigation and subsequent raid arose from allegations that WellCare falsely and fraudulently inflated expenditure information submitted to the Florida Medicaid and Healthy Kids programs from mid-2002 through 2006.
In order to avoid a healthcare fraud conviction, WellCare must abide by several DPA requirements, including:
- Paying a civil forfeiture of $40 million
- Paying an additional $40 million in restitution to the Florida Medicaid and Healthy Kids programs
- Retaining and paying an independent monitor to review and monitor business operations
- Cooperating with the government’s ongoing federal and state criminal investigation of former WellCare executives and employees
- Implementing updated policies and procedures to ensure accurate reports of federal and state healthcare program information
- Developing and operating an effective corporate compliance and governance program
On March 20, California Attorney General Jerry Brown joined a whistleblower suit that alleges seven companies operating in California overcharged the state for laboratory tests, according to a
Department of Justice (DOJ) press release.
A state investigation revealed the companies’ laboratories were provided discounts when paid directly by doctors, patients or hospitals—sometimes up to six times cheaper than what they charged Medicaid for the same tests, according to the DOJ. Brown believes the state can recover hundreds of millions in overpayments from the case.
The press release named Physicians Immunodiagnostic Laboratory, Westcliff Medical Laboratories, Whitefield Medical Laboratory, Seacliff Diagnostics Medical Group, Quest Diagnostics, Laboratory Corp. of America, and Health Line Clinical Laboratories, now known as Taurus West, as the defendants in the case.
The Iowa Hospital Association (IHA) reports declines in service areas and increases in charity care for Iowa hospitals. Considering all factors, Iowa hospitals’ overall margins have fallen from 5.5% in 2007 to -9.6% at the end of 2008.
Kirk Norris, the President and CEO of the IHA, comments that, unlike other businesses, hospitals must provide their services 24 hours a day every day, despite their customers’ inability to pay.
Another factor contributing to the hospitals’ economic hardships, according to the IHA, are reimbursement rates from Medicare and Medicaid. These programs together make up about 60% of Iowa hospital revenue, and in 2008 Iowa hospitals lost more than $275 million to the two programs.
Hospitals are among the largest employers in the counties where they are located, and Norris calls for the government to take a close look at the burden programs such as Medicare and Medicaid are placing on them.
Source: Iowa Hospital Association
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