HCFA to hire special anti-fraud contractors

Proposed activities published in Federal Register

The Health Care Financing Administration is moving ahead with its plans to hire special contractors to help fight Medicare fraud and abuse.

"This is part of our goal of driving out the scam artists who are stealing from the health care of seniors and the disabled," says a HCFA spokesperson.

Adds HCFA Administrator Nancy-Ann Min DeParle, "We need to keep working harder and smarter to catch criminals who try to stay one step ahead of every loophole we close and every scam we shut down. We are extremely eager to start using these new anti-fraud contractors to further step up our fight against fraud, waste, and abuse."

Until recently, only insurance companies whose primary responsibility has been processing Medicare claims have been authorized to conduct audits, medical reviews, and other related activities. However, under new authority provided by the Health Insurance Portability and Accountability Act (HIPAA), Medicare is able to contract with private firms to perform these claim audits and reviews.

As proposed by HCFA, these new special anti-fraud contractors will focus on:

· medical reviews to ensure that services billed to Medicare are medically necessary;

· cost report audits to validate payment only for services and overhead costs that HCFA is legally supposed to pay;

· secondary payer determinations to determine if Medicare is improperly paying the medical bills of Medicare beneficiaries that should be paid by another insurer;

· provider and beneficiary education about what can and cannot be billed to Medicare, plus how to spot and report potential fraud and abuse;

· establishing a list of durable medical equipment, such as wheelchairs, that will require prior authorization before being billed to Medicare.

Notice of these proposed changes was published in the March 20 Federal Register.

After a 60-day public comment period, HCFA plans to publish a final regulation and start hiring anti-fraud contractors as fast as possible. It will probably be mid- to late summer before these new investigators start working, HCFA estimates.