Private fraud busters

Hoping to give the agency an added edge in ferreting out questionable claims, Congress authorized the use of private fraud and abuse investigators as part of the Medicare Integrity Program (MIP) contained in the Health Insurance Portability and Accountability Act of 1996 (HIPAA). (See "HCFA’s new hired guns," March 23 Compliance Hotline, page 1.) These independent claim detectives will perform audits, medical reviews and related functions outside the regular payment processing system.

While HIPAA set no specific deadline for hiring these outside fraud busters, the GAO criticized HCFA for the fact that it will be January 1999 before the first MIP contract is scheduled to be awarded — and even then it will be "limited in scope, covering only part of the work envisioned for program safeguard contracts."

The fact that "HCFA has no firm plans regarding when it will expand the scope of this contract or award a second safeguard specialist contract" also troubles the GAO.

Bottom line: HCFA will receive only a fraction of the anticipated initial payoff from contracting with these anti-fraud commandos, the report concludes.

Of particular concern to both the GAO and congressional backers is the fact that the limited January contract does not include one of the new fraud tools originally scheduled for testing: a systematic review of all services provided by various providers to a single Medicare beneficiary to create a clearer picture of the claims profile.

In their defense, HCFA officials cite as reasons for delay such things as their recent financial audit of Medicare and Medicaid operations by the Office of the Inspector General, which forced the agency to create a new process for soliciting and evaluating contractor proposals to reduce error rates, snafus in allocating funding, and unusually high turn-over among its contractors.