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mspivey100WASHINGTON, D.C. – The U.S. Department of Health and Human Services (HHS) Office of Inspector General has launched more than 1,700 healthcare fraud investigations since the start of the current fiscal year, according to eye-opening Congressional testimony delivered last week by HHS Inspector General Daniel R. Levinson.

That figure is roughly one investigation for every employee in the federal government’s largest inspector general’s office. Levinson also told the U.S. House of Representatives Subcommittee on Government Oversight and Reform that 40 healthcare providers across the nation were referred to his office for scrutiny during the last quarter alone due to Recovery Audit Contractor (RAC) audit issues. 

“Although not all improper payments are fraudulent, all payments resulting from fraud are improper. There is no precise measure of the magnitude of healthcare fraud, but we know that it is a serious problem that demands an aggressive response,” Levinson said during his testimony. “Although the majority of healthcare providers are honest and well-intentioned, a minority of providers who are intent on abusing the system cost taxpayers billions of dollars per year.”

OIG enforcement efforts during the 2010 fiscal year resulted in more than 900 criminal and civil actions, plus $3.8 billion in court-ordered fines, penalties, restitution and settlements, Levinson noted. That figure, however, is a drop in the proverbial bucket compared to the $47.9 billion in Medicare improper payments reported last year by the Centers for Medicare & Medicaid Services (CMS). Of that total, $34.3 billion was attributable to Medicare Fee-for-Service, with $13.6 billion attributable to Medicare Part C.

Levinson’s testimony came the same week that President Barack Obama announced the launch of the federal Government Accountability and Transparency Board. Part of the president’s Campaign to Cut Waste, the board will focus on rooting out misspent tax dollars and “making government spending more accessible and transparent for the American people,” according to a news release from the White House. Levinson, who has served as HHS inspector for nearly seven years, was among “several of the nation’s top watchdogs and leaders on government accountability” named to the board, which held its first meeting on Thursday.

“Cutting Waste, fraud and abuse has been something Washington has talked about for decades, but now more than ever, what the American people need is action,” Vice President Joe Biden said. “That’s why we are tapping the top leaders across government who have been most aggressive in cracking down on waste to drive change and make the government work for our nation’s families.”

Levinson during his testimony was quick to point out that not all improper payments are the result of fraud, noting that such payments can result from medically unnecessary claims, miscoded claims, eligibility errors or insufficient documentation.

“For example,” Levinson said, “my office recently identified $3.6 million in improper Medicare Part D payments on behalf of deceased beneficiaries.”

Levinson described how his office’s work supports CMS efforts to reduce error rates by identifying what types of errors occur most frequently and which provider types are committing them more than others. For example, OIG found that inpatient hospitals, durable medical equipment suppliers, hospital outpatient departments, physicians, skilled nursing facilities and home health agencies accounted for 94 percent of improper Medicare payments recorded during the 2009 fiscal year. During that same time, insufficient documentation, miscoded claims and medically unnecessary services and supplies accounted for about 98 percent of improper payments attributable to the six different types of providers. OIG is planning audit work to follow up on “error-prone” providers, Levinson noted – or individual providers with erroneous claims in each of the past four CERT cycles – to test those providers’ claims and identify improper payments.

Levinson called medically unnecessary services “particularly concerning” because beneficiaries “may be subjected to tests and treatments that serve no purpose and may even cause harm.” Furthermore, because beneficiaries are generally responsible for a 20 percent copay for items and services provided under Medicare Part B, beneficiaries may pay unnecessary or inflated copays when they receive items or services that they do not need, Levinson added.

Levinson reviewed a variety of problem areas identified by his office during the last several years of oversight work. For example, in one review of claims for certain types of support surfaces used to prevent and treat bedsores, federal officials found that more than one out of every five claims were medically unnecessary, according to Levinson’s testimony. In a review of power wheelchairs, Levinson’s office found not only that 9 percent of claims were not medically necessary, but the records for an additional 52 percent of claims did not contain sufficient documentation to determine whether they were medically necessary. Improper payments for the wheelchair claims totaled $95 million during a single six-month period, Levinson said.

The OIG also found pervasive documentation errors for other types of services: for example, that 60 percent of Medicare claims for rehabilitation power wheelchairs – accounting for $112 million in improper Medicare payments during another single six-month period – did not meet all documentation requirements. Levinson’s office additionally found “significant” rates of documentation error for certain types of pain management services.

In some cases, Levinson said, documentation or coding errors may even signal broader vulnerabilities affecting patient care. A whopping 82 percent of hospice claims for beneficiaries in nursing facilities did not meet all Medicare coverage requirements – requirements that are in place to protect beneficiaries’ health and well-being.

“OIG currently is conducting a series of audits of hospital compliance with Medicare requirements … (and) based on prior audit and enforcement work, we have identified 27 ‘high risk’ hospital billing practices,” Levinson said. “Using data mining, we further focus on potential problem areas in selected hospitals, and then we select claims for testing. We conduct hospital site visits to perform comprehensive reviews of billing and medical record documentation. In addition to identifying and recovering improper Medicare payments, we are recommending improvements to internal controls to prevent future improper billings.”

For more information about the activities of the HHS Office of Inspector General, go to oig.hhs.gov.  

Mark Spivey is a correspondent for the RACmonitor.com and ICD10monitor.com websites. He can be reached at mcspivey@hotmail.com.


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