Medicare toughens fraud screening
WASHINGTON — Tired of paying bogus claims then chasing the scammers, Medicare officials said yesterday they are deploying screening technology similar to what is widely used by credit card companies to head off fraud.
Up to now, the $500 billion-a-year government health program for seniors has basically paid claims first and asked questions later in a system dubbed “pay and chase.’’
The technology upgrade should help deter flagrant abuses, such as the small clinic that suddenly starts billing more for a particular outpatient procedure — intravenous infusions, for example — than major hospitals in its area. But it is not likely to help crack sophisticated schemes that involve outwardly respectable companies with the expertise to cover their tracks.
Medicare “is putting in place the kind of computer program it should have had in 1980 or earlier,’’ said Patrick Burns of Taxpayers Against Fraud, a nonpartisan group that supports whistle-blowers who expose corporate scams against the government. “The bad news is that the largest Medicare and Medicaid frauds are designed at the highest levels of companies, with accountants, billing experts, and salespeople smoothing over the paperwork so that it will slide past all the proctors.’’
Health care fraud is estimated to cost taxpayers $60 billion a year, although its real extent is unknown. Medicare, which covers 47 million seniors and disabled people of any age, has long been a prime target. But with the program facing insolvency, combating fraud has become a more urgent priority.
Medicare antifraud czar Peter Budetti said the new system expected to go into operation July 1 is a major step forward.
“It will allow us to do some things we had not been able to do before,’’ he said.
The program had performed rudimentary fraud checks on individual claims before payment, officials said. For example, does the Medicare number on a bill for prostate cancer treatment belong to a female patient?
The new system will allow Medicare to monitor large numbers of claims using computer analysis to spot tell-tale patterns of potential problems.
Looking at variables such as the beneficiary, the provider, the type of service, and other patterns, the system will assign risk scores to claims. It will then issue an alert when something looks off. Medicare will be able to investigate the claim before payment is sent out.
That should help address one of the major frustrations for health care fraud investigators. Because Congress directs Medicare to pay claims promptly — usually within 14 to 30 days — fraudsters can make a quick bundle and drop off the radar at the first sign that law enforcement is on to them. By the time the chase is on, the lawbreakers have usually absconded with the loot.
“We’re getting ahead of the game here,’’ said Donald Berwick, administrator for the Centers for Medicare and Medicaid Services.
Officials said Medicare has awarded an initial $77 million contract for the new system to defense giant Northrup Grumman and other companies.
“We will be able to translate their experience from the private sector into Medicare,’’ Budetti said.
Other major companies participating in the contract include National Government Services and Federal Network Systems, a