What Doctors Need to Know About Medicare Fraud & Health Information Technology

Medicare Fraud is on the Rise

On Friday July 16, 2010, federal authorities had conducted the largest ever Medicare bust across five states. This raid resulted in 33 indictments and 36 arrests. The alleged fraud totaled $251 million.

“Today’s arrests illustrate how health care fraud schemes can replicate virally and migrate rapidly across communities,” said Daniel R. Levinson, inspector general of the U.S. Department of Health and Human Services, which oversees Medicare. (NYC doctors, nurses arrested in Medicare scams).

On Thursday July 15, 2010, at a hearing of the Senate Subcommittee on Federal Financial Management, U.S. Sen. Amy Klobuchar decried the significant cost that fraud represents each year. The Attorney General of the United States Eric Holder, Jr.  estimated that Medicare loses money to fraud at a rate of $60 billion dollars a year. (Medicare fraud robs billions from taxpayers, says Klobuchar).

Medicare fraud is now a huge and growing headache for the federal government, especially since the enormous Part D expansion of Medicare was passed in 2005.  Management and oversight of Medicare has become such a challenge that it is now on the Government Accountability Office list of government programs at “high risk” for waste, fraud, and abuse (HomeTownSource.com). With the passage of ObamaCare and the future further expansion of Medicare, unless drastic action is taken, the amount of fraud in the system will increase.

In response to the rise of fraudulent claims, the Obama administration announced in May of ’09 the formation of a new interagency composed of Medicare fraud detection, investigation and prosecution experts from the DOJ and HHS. This agency represents the expansion of a joint DOJ-HHS Medicare Fraud Strike Force that was formed in 2007.  This strike force has been successful in fighting Medicare fraud in hotspots such as South Florida, Los Angeles, Detroit, & Houston.

Doctors & Health Care Organizations will Need to Adopt New Health Information Management Technologies

Medicare Fraud Pushes Doctors to Adopt New Health Information Technology

Medicare Fraud Pushes Doctors to Adopt New Health Information Technology

While this stepped up effort by the government will catch more criminals seeking to defraud the system, it will also come at a cost to legitimate medical providers. This is because they will get caught up in the effort to detect and investigate fraud:

“The increasing attention by Medicare and other government agencies is translating to additional administrative/billing requirements for physicians, making an already complex process more complicated,” says Bill Gilbert of AdvantEdge, a medical billing company headquartered in Warren New Jersey. “For example, radiologists will soon have to include a national provider ID number (the number attached to physicians registered with Medicare) for the referring physician on their radiology bill. Since there are numerous well-known glitches in the NPI process (the system for NPI registration is called PECOS), there will inevitably be radiologists who don’t get paid or who have payments delayed because of the extra information required.”

Because of the increase in government effort to detect fraud, legitimate medical providers would do well to carefully document everything says Bill Gilbert:

If a practice is carefully documenting, coding, and billing (like AdvantEdge does) they have nothing to fear. However, practices that do not have formal procedures in place or that have higher error rates are going to be audited. These practices are not committing fraud and have no ill intent, but they may find themselves owing Medicare substantial sums. The definition of Medicare fraud is essentially “any improper billing” which could be as simple as submitting the wrong code.

Unfortunately, according to recent study by the Commonwealth Fund, a leading private health care think tank, few medical providers today are adopting to new modern health information technologies because of the cost involved.

However, the cost of waiting may well be higher. If the U.S. healthcare industry en mass does not start to modernize to new health information technologies now, it’s likely to soon find itself in the crossfire of the U.S.  Government’s coming war on Medical insurance fraud.

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