Press Releases

MEDICARE FINDS BILLIONS IN SAVINGS TO TAXPAYERS

MEDICARE FINDS BILLIONS IN SAVINGS TO TAXPAYERS
NEW CONTRACTORS TO HELP IDENTIFY FRAUD, WASTE AND ABUSE

Through more aggressive local oversight and specially targeted fraud and abuse initiatives, the Centers for Medicare & Medicaid Services (CMS) has saved more than $2 billion in Medicare claims in special projects focusing on infusion therapy and those services provided by Independent Diagnostic Testing Facilities. CMS has made more than 980 Medicare fee-for-service program referrals to law enforcement authorities since October 2004.

In addition, CMS is continuing its aggressive local efforts in fee-for-service oversight and helping to identify and combat fraud in the new Medicare prescription drug benefit with the addition of four new Medicare Drug Integrity Contractors (MEDICs). 

“CMS is using every tool available to find and fight waste, fraud and abuse across Medicare and Medicaid, to help ensure that drug benefit dollars are spent appropriately,” said CMS Administrator Mark B. McClellan, M.D., Ph.D.  “Our fraud and abuse prevention programs are already working to save money, and today’s actions will provide even more protections for beneficiaries and taxpayers.” 

In 2006, CMS expanded its satellite offices in Miami and Los Angeles, providing additional on-the-ground efforts to identify and report fraud, waste and abuse in Medicare.  In Los Angeles, Medicare has:

• Revoked the billing numbers of 117 Medicare providers who submitted false claims or invalid business operations, generating a savings of approximately $200 million. 

• Implemented claims processing edits which prevent the payment of claims submitted with a deceased provider’s identification number, resulting in savings of more than $4 million.
• Implemented plans that have denied approximately $163 million in charges for Independent Diagnostic Testing Facilities (IDTF), revoked the billing privileges of 83 IDTFs and denied $445 million in claims for beneficiary Sharing or “Capping.”
• Denied the enrollment of highly suspicious providers in Medicare, resulting in the prevention of potentially inappropriate payments of more than $10 million.

In the Miami Office, CMS is: 

• Working with the Governor’s office, federal and state law enforcement officials, state health and licensure agencies, the Medicare carrier and Payment Safeguard Contractors, CMS is participating in the Florida Infusion Fraud Federal/State Task Force.  Through the use of administrative actions, auto denial and medical record reviews, site visits, data analysis and complaint investigations, the initiative has saved more than $1 billion and resulted in the suspension of 104 payment claims submitted by more than 300 providers.  Approximately 400 new investigations have resulted from this effort. 
• Using a variety of prepayment edits that have contributed to the Medicare savings (Medically Unbelievable Services Edits - $200+ million; High Claim Volume Infusion Beneficiary Edits - $400+ million; Service-Specific edits - $200+ million).  In addition, the U.S. Department of Justice opened 63 criminal and 38 civil Medicare fraud cases since October, 2005.  The Agency for Health Care Administration has suspended or revoked 11 clinic licenses and the Department of Health revoked the licenses of 5 practitioners involved in criminal activity associated with these clinics.  CMS and the State are also pursuing legislative and regulatory changes to address programmatic vulnerabilities.   
• Leading an identity theft initiative in South Florida involving 2,500 Medicare beneficiaries whose Medicare numbers have been compromised or who are participating in fraud.  Through the use of prepayment edits, more than $600 million has been saved .
• Revoking the provider numbers of more than 500 Durable Medical Equipment suppliers, resulting in a drop in Medicare billing from $93 million in 2004 to $16 million in 2005 and in Medicare payment from $74 million to $13 million in that same timeframe. 

By using the Medicare Integrity Contractors, CMS is able to use new and innovative techniques to monitor and analyze data to help identify fraud; work with law enforcement, prescription drug plans, consumer groups and other key partners to protect consumers and enforce Medicare’s rules; and provide basic tips for consumers so they can protect themselves from potential scams.  The three new regional MEDICs are:

• Science Applications International Corporation in the West;
• Electronic Data Systems (EDS) in the North and Northeast; and
• Health Integrity (the current MEDIC serving the entire country, which will now cover) the Southeast only.

In addition to the three regional MEDIC Contractors, CMS awarded a fourth MEDIC contract entitled the “One Program Integrity System Integrator” (One PI) to EDS.  EDS is tasked with assisting CMS in the development of a centralized data approach for program integrity activities.  The One PI MEDIC will assist CMS by:

• Providing data analysis tools necessary for CMS, the three regional MEDICs and other CMS contractors to detect potential fraud, waste and abuse in Medicare and Medicaid programs;
• Using data analysis methods to uncover potential fraud, waste and abuse on a national level;
• Identifying duplicate payments for Medicare Part B and Part D medications; and
• Assisting CMS, the three regional MEDICs and other CMS contractors with the fulfillment of data requests from law enforcement and other entities.

The work of the new MEDICs will add to the range of steps already in place to prevent fraud and abuse in the Medicare prescription drug benefit.  MEDICs are already responding to and investigating beneficiary complaints; looking proactively at claims and enrollment data to identify suspicious activities; and conducting education and outreach activities to plans, law enforcement, and other agencies.  More specifically, with the support of the MEDICs, CMS has:

• Referred to HHS Office of the Inspector General (OIG) and the Federal Bureau of Investigation the $299 ring, a scam where beneficiaries are offered a “Medicare sponsored prescription drug plan” in exchange for an initial “payment” of $299 or up to $379.  In some instances, the callers have prior access to the beneficiary’s personal data such as Medicare related numbers or Social Security numbers.  CMS and local partners, including state Attorneys General and insurance commissioners, worked to increase awareness of these scams, resulting in nearly 300 complaints and a significant reduction in the number of potential victims to the scam. 
• Identified and referred cases to the OIG where beneficiaries may have been enrolled in plans against their will. 
• Identified and referred potential cases of drug diversion to the OIG. 

“Vigilance in protecting beneficiaries and taxpayers from waste, fraud and abuse is one of our top priorities in Medicare,” said Dr. McClellan.