Feds announce plans for new anti-fraud measures
Number of audits will double
The White House has announced 10 initiatives to be added to the federal government's wide-ranging efforts to stamp out fraud and abuse in its Medicare and Medicaid programs. The proposals are a mix of legislative and regulatory proposals. No definitive schedule for their implementation has been announced. These include:
o Eliminating excessive Medicare reimbursement for drugs.
The U.S. Department of Health and Human Services (HHS) says it has uncovered a pattern where the official "list" price charged Medicare for 22 popular prescription drugs is actually higher than the real market rate. As a result, the federal government pays more than double the actual average wholesale prices for one-third of these prescriptions, and as much as 10 times the wholesale rate in some instances.
Under new HHS regulations, Medicare will monitor future claims to ensure they are billed at the lowest market rate charged to other payers.
o Eliminating overpayments for Epogen.
HHS will reduce the Medicare reimbursement rate for Epogen (a drug used for kidney dialysis patients) to reflect current market prices. HHS estimates this move will save some $100 million in annual Medicare payments.
o Doubling the number of audits to ensure providers are only reimbursed appropriate costs.
Currently, not all cost-based providers - hospitals, home health agencies, and skilled nursing facilities - are audited. Under this proposal, providers that are reimbursed based on their actual costs will be assessed a fee to cover future HHS audits and any related settlement activities.
o Ensuring competitive pricing.
HHS will institute a nationwide competitive pricing program for equipment and nonphysician services, aimed at lowering related Medicare costs.
o Requiring accurate billing for mental health benefits.
Medicare mental health outpatients are sometimes erroneously billed for inpatient hospital or home services they do not receive. Under this proposed regulation, providers will not receive payment until they certify that mental health services have been provided in the appropriate treatment setting.
o Imposing monetary penalties for false certification of need.
The HHS Inspector General says some providers inappropriately certify that beneficiaries need outpatient mental health benefits and hospice services. This proposal would impose penalties on physicians who falsely certify their patients' need for those two benefits.
o Preventing providers from declaring bankruptcy in order to escape fines.
Some providers file for bankruptcy to avoid paying Medicare-related fines or to avoid returning illegal overpayments. Under this proposed regulation, Medicare will have priority over other claims when a provider files bankruptcy.
o Ending illegal provider "kickback" schemes.
A kickback scheme is defined as health care providers unnecessarily referring patients to ancillary providers in return for some kind of financial reward, HHS says. While Congress has already established criminal penalties for such schemes, HHS will ask Congress to give federal prosecutors authority to obtain court orders putting an immediate halt to suspected kickback operations, while permitting them to bring civil as well as criminal charges against suspected violators.
o Denying payment for private insurance claims.
In the past, Medicare has wrongly paid medical claims of private insurers because it had no way of knowing the commercial carrier was the primary payer.
HHS proposes to correct this situation by requiring insurers to report all Medicare beneficiaries they cover, thus allowing Medicare to recoup double the amount owed by insurers who purposely let Medicare pay claims the group plan should have made.
HHS also would impose fines for not reporting no-fault or liability settlements for which Medicare should have been reimbursed.
o Capitating payments for routine surgical procedures.
HHS will expand the Health Care Financing Administration's current Centers of Excellence demonstration project, in which Medicare receives volume discounts on certain surgical procedures in return for allowing participating hospitals to increase their market share and gain specialized clinical expertise.
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