Report Highlights Medicare Fraud

Most Payment Suspensions Related to Fraudulent Practices
Report Highlights Medicare Fraud
When the Medicare program suspended payments to 253 provider organizations in 2007 and 2008, the action was almost always based on evidence of fraud rather than overpayment errors, according to a new report. The suspended organizations had received $206 million in overpayments, according to the new Medicare payment suspension report, which the Department of Health and Human Services' Office of the Inspector General issued Nov. 1.

"The great majority of providers that the Centers for Medicare & Medicaid Services suspended in 2007 and 2008 exhibited characteristics that suggest fraud," according to the report. "CMS recommends that providers suspended due to fraud receive no advance notice; in all but three of the suspensions, no such advance notice was given."

In analyzing the payment fraud, the report found that 74 percent of suspended providers showed questionable billing patterns. And 63 percent of suspensions were supported by information from beneficiaries or other providers, such as evidence that the suspended providers had billed for services that were never received or were medically unnecessary, the report found.

Other Medicare Report Findings

Among other findings:

  • Only 7 percent of overpayments were eventually collected.
  • 85 percent of suspensions were for Medicare Part B providers, such as physicians, home health agencies and durable medical equipment dealers, with 15 percent for Part A providers (hospitals).
  • 79 percent of the suspensions of billing privileges were in Florida, Puerto Rico, California and Michigan. A total of 35 percent of suspensions were in Florida alone.

New Fraud-Fighting Provision

Under healthcare reform, the Centers for Medicare & Medicaid Services, working in collaboration with the OIG, may suspend payments to a provider pending an investigation of a "credible allegation of fraud." Proposed regulations to carry out that provision are under final review.

Until healthcare reform was adopted, CMS could suspend payments to a Medicare provider only under three circumstances: fraud or willful misrepresentation; when an overpayment exists but the amount has not been determined; or when payments made are incorrect.

About the Author

Howard Anderson

Howard Anderson

Former News Editor, ISMG

Anderson was news editor of Information Security Media Group and founding editor of HealthcareInfoSecurity and DataBreachToday. He has more than 40 years of journalism experience, with a focus on healthcare information technology issues. Before launching HealthcareInfoSecurity, he served as founding editor of Health Data Management magazine, where he worked for 17 years, and he served in leadership roles at several other healthcare magazines and newspapers.

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