Amid Fraud Crisis, Medicare’s Accounting System Lacking Basic Information

Breeda O'Leary, Esq.

Despite the government’s aggressive approach in criminally prosecuting fraudulent providers, a report from the Department of Health and Human Services inspector general found that Medicare’s new accounting system failed to automatically extract critical data regarding providers.  This failure may lead to the inability to collect more than $543 million in overpayments to Medicare providers.

In 2010, Medicare overpaid providers more than $9.6 billion.  Since that time, Medicare has implemented a new accounting system – a system that failed to automatically extract provider and contractor information from the old accounting system.  As a result, Medicare does not have provider or contractor information critical to collecting from those that were previously overpaid.

In addition, the new Medicare accounting system allows information about providers to remain outdated, with little consequence for providers who fail to update their contact information.  Providers receive payments via direct deposit, thus eliminating the incentive to ensure that Medicare has a correct address in its accounting system.

According to agency spokesman Brian Cook, “Reducing the incidence of overpayments is a high priority for [Medicare].”  However, once a provider has been overpaid, having detailed information regarding the provider, such as a proper contact address, is critical to notifying the provider and collecting any overpayments.

While criminal prosecution of fraudulent providers continues to remain a priority for the government, the inspector general’s report highlights glaring deficiencies in Medicare’s new accounting system.  Medicare should address these deficiencies with the same sense of urgency as the criminal prosecution of fraudulent providers.

If you have been contacted concerning an overpayment or a possible criminal investigation, contact the experienced and professional fraud team at Fausone Bohn, LLP for sound legal advice.  Contact Breeda O’Leary at (248) 380-0000 or online at www.MichiganFraudLawyer.com. 

To read the article about the deficiencies in Medicare’s new accounting system, please visit:

http://www.usatoday.com/story/news/politics/2013/07/02/medicare-overpayments-unrecovered/2480429/

 

Health Care Fraud Indictments

Tariq Hafeez, Esq.

Thirteen individuals from the metro Detroit area have been charged in a large-scale health care fraud and drug distribution scheme, United States Attorney Barbara L. McQuade announced today.

The superseding indictment, adds 13 new defendants and new charges to a 2011 indictment, which charged Canton Pharmacist Babubhai ‘Bob” Patel with overseeing a massive health care fraud and drug distribution ring at more than 20 pharmacies that he owned and controlled in metro Detroit.

The 21-count superseding indictment charges with prescription fraud involving 26 Michigan pharmacies. The indictment alleges that the defendants participated in a scheme whereby the owners/controllers of the pharmacies provided kickbacks, bribes, and other illegal benefits to physicians to induce those physicians to write prescriptions for patients with Medicare, Medicaid, and private insurance. The prescriptions be presented to one of the defendants’ pharmacies for billing. In exchange for their kickbacks and inducements, the physicians would write prescriptions for the patients and bill the relevant insurers for services supposedly provided to the patients without regard to the medical necessity of those prescriptions and services. The physicians would direct the patients to fill their prescriptions at one of the defendant owned pharmacies, where defendants would bill insurers, including Medicare, Medicaid, and private insurers, for dispensing the medications, despite the fact that the medications were medically unnecessary and, in many cases, never provided. Patients were recruited into the scheme by patient recruiters or “marketers,” who would pay kickbacks and bribes to patients in exchange for the patients’ permitting the defendants’ pharmacies and the defendant physicians to bill their insurance for medications and services that were medically unnecessary and/or never provided.

The indictment further alleges a conspiracy to distribute controlled substances at the defendants’  pharmacies to facilitate the submission of false and fraudulent claims to Medicare, Medicaid, and private insurers. According to the indictment, defendants paid physicians kickbacks for prescriptions for controlled substances for their patients and directed those patients to fill the prescriptions at defendants owned/controlled pharmacies. The controlled substances included the Schedule II drug oxycodone (Oxycontin), the Schedule III drug hydrocodone (Vicodin, Lortab), the Schedule IV drug alprazolam (Xanax), and the Schedule V drug cough syrup with codeine. According to the indictment, prescriptions for these drugs were written outside the course of legitimate medical practice. 

This most recent indictment falls in line with the federal government’s increased investigation and prosecution of health care fraud across the country.  In May 2009, the Department of Health and Human Services (HHS) and the Department of Justice (DOJ) created the Health Care Fraud Prevention and Enforcement Action Team (HEAT), making the fight against health care fraud a Cabinet-level position. The Heat task force is focused on nine cities including Detroit.

If you have questions about health care fraud or other legal issues, please contact Mark Mandell or Tariq Hafeez at 248.380.0000 or online at www.MichiganFraudLawyer.com.

 

Detroit Health Care Fraud

Matt Worley, Esq.

Despite regular indictments and convictions of home health care agency owners, Medicare and Medicaid fraud remains prevalent in metro Detroit, according to a new report by the Office of the Inspector General (OIG).

The US Department of Health and Human Services (HHS) found high fraud, waste, and abuse in Detroit.  Other cities found to have high fraud include Chicago, Miami, Tampa, Los Angeles, Dallas, Houston, and Baton Rouge.

Fraud is a major problem in the Medicare system.  Most experts believe that up to ten percent of the annual $1 trillion cost of Medicare and Medicaid can be attributed to fraud, waste, and abuse.  In 2009 HHS created HEAT – a task force whose aim is to reduce fraud in these programs.

According to this report, as much as 22 percent of claims inspected were filed in error because the services were unnecessary or were coded inaccurately.  This resulted in $432 million in unnecessary payments to home health agencies.  Part of the problem lies in poor record-keeping by the agencies.

The OIG report made three recommendations to home health agencies to reduce fraud.  These providers should (1) increase Medicare contractor standards to identify high risk providers; (2) track license revocation recommendations; and (3) take measures to prevent inappropriate payments to agencies with suspended or revoked licenses.

In response to the report, the Centers for Medicare and Medicaid Services (CMS) said it would implement all three of these recommendations.

To read the original article in Crain’s Detroit Business, please visit: http://www.crainsdetroit.com/article/20121220/BLOG010/121229986/report-home-health-agencies-still-target-of-fraud-investigators-in

If you have questions about Medicare or Medicaid fraud, or other legal issues, please contact Mark Mandell or Tariq Hafeez at 248.380.0000 or online at www.MichiganFraudLawyer.com.