Medicare Fraud Steals $60 Billion a Year

Six months after a provider performs a particular medical procedure, they can bill it again. And, exactly six months to the day, the provider photocopies the original claim, changes the date, and sends the scammed claim it off to Medicare.

$60 billion worth of fraud is roughly 10% of the total amount Medicare pays out every year on healthcare for 54 million people. According to a March 7 WIRED article, "Since 2007 more than 2,300 providers have been charged with fleecing Medicare, and more than 1800 defendants have been convicted of felony offences, ranging from claiming phantom services to performing unnecessary surgeries."

Among CarePrecise Clients are the Federal Bureau of Investigation and state anti-fraud law enforcement bodies. CarePrecise provides comprehensive data on healthcare providers.

How will ever stop these scams? There are just too many of them for CMS' dedicated investigators to keep up. But the government is getting help from hundreds of citizens: whistle-blower lawsuits allow any medical office staff or other insider to sue their employer and collect 15% to 30% of the settlement. The number of bounty hunters is growing; in 2014 there were 469 such settlements resulting in $2.2 billion in fines.

Professional whistle-blower lawyers can help skittish employees to rat correctly, but they may not have the investigative chops. Now one clever business has begun to turn medical office whistle-blowing into a growth industry. National Healthcare Analysis Group may do more to help recover this money than has been possible in the past by organizing the process and "packaging" it. Read more about it...

Healthcare Fraud Recovery $4.2B for 2012

Attorney General Eric Holder and HHS Secretary Kathleen Sebelius released a report today indicating that for every $1 spent on healthcare fraud and abuse recovery, $7.90 has been returned to the treasury over the past three years. With the Obama administration making recovery a top priority, this is the highest level of return in the 16-year history of the program.

Health Care Fraud Prevention and Enforcement Action Team (HEAT) was created in 2009 to reduce fraud, waste and abuse in the Medicare and Medicaid programs and to crack down on individuals and organizations that are bleeding the system. Last year, the Justice Department opened 1,131 new criminal fraud investigations involving as many as 2,148 defendants. Convictions have been achieved on 826 defendants in fraud-related crimes during the year. In the same year, the department opened 885 new civil investigations.

In 2012, CMS began screening all 1.5 million Medicare-enrolled providers through the new Automated Provider Screening system. APS fingers ineligible and potentially fraudulent providers and suppliers prior to enrollment or revalidation. Nearly 150,000 ineligible providers have been eliminated from Medicare’s billing system so far. 

CarePrecise's standard database of healthcare providers includes a field that indicates providers who may still be active, but have been added to the federal List of Excluded Individuals and Entities, tying excluded providers to their NPI numbers.

Exchange and Medicaid IT Contract Tracker

State Refor(u)m has created a chart that tracks states' choices of firms to build health insurance exchanges and Medicaid systems, with details on technical roles performed by vendors and on some of the software components vendors will use. The chart was produced by the Office of Health Policy and Technology at the University of Massachusetts Medical School. States can help State Refor(u)m keep the tool updated by using the page's comments section to post information about similar contracts awarded in their states.

CarePrecise provides healthcare provider information to state insurance exchanges, health information exchanges, Sunshine Act programs, healthcare fraud investigations and other state and federal healthcare projects.

Visit the Exchange and Medicaid Systems Contracts Chart to see who's doing what on whose project, and to add your own.

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CarePrecise is a sponsor of Big Data for Healthcare Forum, April 29 - May 1, 2013. Join us there!

15 Types of Medical Billing Fraud & Abuse

Estimates of U.S. medical fraud and abuse go as high as $80 billion. It contributes significantly to rising healthcare and insurance costs.  The complexity and fragmentation of the American healthcare billing landscape is frequently a culprit makes fraud and abuse easier to commit and more difficult to detect.

One of our long-time clients, PayerFusion, has just published an article on its blog highlighting fifteen different forms of fraud and abuse, including upcoding, cloning, phantom billing, and a dozen more. Read the article for useful and timely information on this important subject.

CarePrecise provides software, data and services employed by law enforcement, including the Federal Bureau of Investigation, in ongoing investigations. To report fraud or abuse, go to http://oig.hhs.gov/fraud/hotline/
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CarePrecise encourages you to attend the Big Data for Healthcare Forum, April 29 - May 1, 2013.

91 Charged With $295 Million Medicare Fraud

Ninety-one doctors, nurses and others were charged in a blockbuster sting operation, with arrests unfolding over three weeks and culminating in 70 arrests last week. In 2007, a strike force was set up between the Department of Justice and the Department of Health and Human Services to identify and build federal fraud cases to fight criminal abuse of federal healthcare programs. U.S. Attorney General Eric Holder said that arrests were made in eight US cities involving more than $295 million in stolen funds.

Almost half of those charged were part of a Florida ring that recruited healthcare providers to refer patients to a mental health center, in some cases threatening residents of a halfway house with eviction if they refused the unnecessary care. Another case involved $3.4 million in unnecessary physical therapy by two Brooklyn physicians.

On September 1, officials in Detroit charged 18 physicians, nurses, clinic owners and other medical professionals for submitting $28 million in false claims to Medicare. Just one day earlier, the owner of a Houston, Texas durable medical equipment business was sentenced to 97 months in prison for his role in a Medicare fraud scheme.

In all, the strike force, known as Health Care Fraud Prevention and Enforcement Action Team (HEAT), has charged 1,140 defendants who collectively have falsely billed the Medicare program for more than $2.9 billion.

When providers have been convicted of fraud and certain other infractions and delinquencies, their names are placed on the List of Excluded Individuals/Entities (LEIE) database. CarePrecise compiles this data into its comprehensive database of U.S. healthcare providers, identifying excluded providers' NPI numbers, phone and fax numbers.

Read the full story on the HHS website.

And They Were So Close to Canada!

Looks like some Medicare patients will go to any lengths to escape the high cost of U.S. prescription drugs. Even if only through opium-induced euphoria.

Michigan: Twenty-six persons have been charged by Federal investigators in a Medicare fraud scam that took in more than $58 million in fraudulent billings and illegally acquired more than 6 million doses of pricy medications. Drugs were used to entice Medicare patients to play along.

The brains of the gang, one Babubhai Patel, ran a network of 26 Michigan pharmacies that bribed physicians to write the prescriptions, many of them opiates and other frequently-abused pharmaceuticals. Physicians recruited grandmas as mules. Medicare patients would knowingly fill the illicit prescriptions, keeping the drugs and handing over their Medicare and Medicaid billing information to the conspirators. Four doctors and ten pharmacists, as well as some of the patients and others, were indicted in the federal grand jury action.

A Nut Too Tough to Crack?

One of the hardest problems in health IT is the effort to get data from different silos into a centralized database that can be searched as a single dataset. So, this is us announcing our new "linking and shrinking" technology, code named "Squirrel." What does it do?

Squirrel is a record-linkage and deflation system that pulls in data from multiple federal provider databases in various formats, makes them play nice together by linking everything up under providers' NPI numbers, preserves all the data but shrinks the file size down to about 9% of the original size, puts it in a format that can be managed in Microsoft Access or other garden variety database software, downloads it to our customers, and then does it all again fresh every month.

The technology is built on record-linkage methods developed over twenty years. Interesting trivia: The precursor to the current system was built in Microsoft Access 1.0 -- you remember it, the Introductory Package -- in 1992. While we don't share all the secrets, the basic trick involves pattern matching algorithms and a lot of processing time to handle more than 13 million rows of data, comparing each provider's records between all the sources. The end result is called CarePrecise Access.

We just sent out a press release about the whole thing.

Now you'll excuse us, as we have some more nuts to collect and crunch on.

Medicare Wins in Vegas Fraud Case

Rakesh Nathu, a Las Vegas oncologist, settled his fraud case with the Justice Department yesterday for $5.7 million plus interest. Dr. Nathu was accused of submitting false claims to Medicare, TRICARE and the Federal Employees Health Plan for various radiation oncology services, including intensity modulated radiation therapy, and double billing for services. We hope he did better at the craps table. The government has recovered more than $7.3 billion in False Claim Act cases since 2009.

Among CarePrecise clients are law enforcement agencies working on federal and private payer fraud investigations. As a result of work done for our clients, we developed a means of matching the federal fraud conviction list with providers' NPI records, and associating certain demographic data with practice locations to help visualize patterns. Late in 2010 we began including the fraud data in our CarePrecise Access Complete dataset, and the additional economic data in CarePrecise Gold products. Now included is a flag that indicates provider records whose data strongly suggest a match with the federal LEIE (List of Excluded Individuals/Entities) database. Other features help investigators track providers' licensing, credentials, specialty codes, enrollment in the PECOS database, and numerous other functions.

Read the Justice Department news release.

Nearly 3000 Excluded Providers Still Practicing

You might wonder if, and if so, why, healthcare providers who have been convicted of Medicare fraud are still practicing medicine, writing prescriptions, and billing health plans (except, presumably, Medicare). Well, it's a good question. Apparently such a conviction may not get a provider's NPI deactivated.

For several months the number of providers that appear on both the HHS Office of Inspector General's excluded providers list and the current National Plan and Provider Enumeration System (NPPES) have hovered around 2,700.* But for December the number jumped to 2,925. Of that number, more than 1,400 are physicians.

For the past several months, CMS has dropped only 400 to 500 providers each month for various reasons; not all dropped NPI records are due to fraud convictions. Interestingly, the December NPPES dropped more than 1,000 records, while still including more than 2,900 providers listed in the LEIE (List of Excluded Individuals/Entities), the federal database primarily of healthcare providers convicted of fraud or other crime, for patient neglect or abuse, felony controlled substance conviction, or whose licenses have been revoked, suspended or surrendered. A small number of providers are included on the list for less serious reasons, including refusal to provide required information to HHS, and default on a federal healthcare education loan. An inquiry sent to CMS requesting information on the matter has not been answered.

Each month, nearly 30,000 new records are added to the NPI database, primarily representing new healthcare providers. On average, 33,000 records are updated (by the providers themselves in nearly every case). The December NPPES database includes 3,277,833 healthcare provider records. All HIPAA-covered U.S. healthcare providers are required to obtain an NPI record. For all practical purposes, a physician's NPI number, along with a DEA number, is required to write a prescription because pharmacies generally require them. Theoretically, at least, if a pharmacy could not find a valid NPI number, it could refuse to fill the prescription.

CarePrecise compiles federal healthcare provider data for use in research, clinical trial provider pool development, fraud prevention and marketing. Clients include health plans, educational institutions, drug companies, marketers, law enforcement, health systems and individual providers.
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* Source: CarePrecise research data. Methodology involves cross-referencing the two databases using proprietary algorithms to affix NPI numbers to providers in the fraud database; the fraud database (LEIE) does not include NPI numbers, making it difficult to track against practicing providers. Actual number of providers on both lists may be higher; the cross-referencing algorithm is used conservatively.