Medicare Fraud Patrol Faces Budget Challenges

On Wednesday, March 9, 2011, congressional hearings revealed that officials at the Centers for Medicare and Medicaid Services (CMS) have developed plans for an increase in scrutiny for new providers joining these programs, as opposed to going after fraudulent behavior after the fact. Furthermore, these experts estimate that as much as $70 billion in savings could be achieved per year by going after fraudulent providers.

Peter Budetti, who is director of program integrity at the CMS, told the Senate Homeland Security subcommittee hearing, "We are going to keep out the bad guys without making things worse for honest providers, and cut off payments for things that should not be paid. We want to move from the pay and chase mode to preventing fraud."

The efforts could be cut short, however, due to lack of funding for new software that provides electronic screening that could aid in the identification of fraudulent providers. Much of the funding for the new software was included in the 2010 health care reform law, which is considered for repeal by many Republicans on Capitol Hill. On the other side of the argument regarding funding, Republicans report that the anti-fraud measures in the health care bill do not go far enough and that the Congressional Budget Office estimates that the efforts at fraud prevention would only eliminate $5.8 billion in improper payments over the next decade.

If left to continue, increases in Medicare fraud could limit the funding for the new health care reform law. Funding has also been sought for the special interagency task force that pursues and investigates fraudulent claims submissions and for receipt of kickbacks for referrals to billing for medical services that were never provided.

Medicare Fraud: A $70 Billion Taxpayer Ripoff, The Fiscal Times, March 10, 2011