Administration vows to put fraud fighters on site at carriers

By MATTHEW HAY

HHBR Washington Correspondent

WASHINGTON – The Clinton Administration is hoping to increase the number of federal agents who investigate Medicare fraud, including a Medicare fraud unit in the office of every Medicare contractor in the country.

President Clinton tabled the proposal in his national radio address Jan. 22, saying his FY01 budget would also fund new technologies to track false claims. While the president’s plan lacked specifics, the administration plans to propose $48 million for Medicare contractors’ anti-fraud efforts.

Health Care Financing Administration (HCFA; Baltimore) spokesman Craig Polaski says the details of the president’s plan will be released along with his budget next month.

Clinton’s formula for purging fraud extends well beyond anything contemplated by Congress to date. Last summer, the House Commerce Committee held hearings in which it blasted carriers for shoddy oversight. But this move was not suggested.

Congress may float a proposal of its own when it releases a thorough report next month on waste and fraud throughout federal government spending that cites "a substantial error rate" in Medicare payments. House Budget Committee spokesman Terry Holt said his committee is preparing a hearing that will address those issues as early as next week.

Clinton’s proposal comes as two new reports cite major inroads in reducing healthcare fraud.

"Perhaps the most concrete evidence of the success of anti-fraud and oversight efforts is the significant reduction in the error rates in Medicare fee-for-service payments – an overall 45% reduction in improper payments in just two years," the Department of Health and Human ServicesOffice of Inspector General (Washington) and Department of Justice (Washington) assert in their joint annual report on healthcare fraud and abuse control programs for FY99, expected to be formally released shortly.

According to the report, the Health Care Fraud and Abuse Control Program resulted in judgments and settlements totaling $524 million last year. As a result of program activities, the federal government collected $490 million in 1999, while another $4.7 million was recovered as the federal share of Medicaid restitution.

Meanwhile, HCFA reported last week that its Medicare Integrity Program prevented $5.3 billion in inappropriate payments in the last half of 1998 and the first half of 1999, including provider audits ($1.4 billion) and prepayment activities ($2.6 billion).

Overall, the government says the most recent audit for FY98 shows the error rate has dropped to 7.1% and that estimated improper fee-for-service payments have dropped to $12.6 billion a year.

The initial audit for FY96 showed an estimated error rate of 14% and estimated improper payments of about $23.2 billion a year.