Health care fraud

@Wikipedia: Health care fraud
@Wikipedia: Medicare fraud


Under Pressure, New York Moves to Soften Tough Medicaid Audits
New York Times, 2012-03-19

New York State was paying for the medical care of dead people
when Gov. George E. Pataki and the State Legislature
created the Office of the Medicaid Inspector General
to curb billions of dollars in fraud and misspending by health care providers.

The turnaround was startling.
Within four years the state had recouped $1.5 billion in Medicaid overpayments,
the highest recovery rate in the nation.
Other states rushed to create inspectors general like New York’s.

But a backlash from the politically powerful health care industry
has erased broad support for the crackdown.

Last year, amid a crescendo of provider complaints
of overzealous, nitpicking audits and unfair tactics,

Gov. Andrew M. Cuomo [D]
quietly dismissed the state’s first Medicaid inspector general, James G. Sheehan,
and directed Mr. Sheehan’s successor, James C. Cox,
to collaborate with providers on changes to the agency’s policies and auditing methods.

In an interview, James Introne, Mr. Cuomo’s deputy secretary for health,
expressed the state’s new view.

“An audit need not be an adversarial enterprise,” Mr. Introne said.
“To the extent that an audit turns into an adversarial affair,
it may not be conducted properly.
An audit is successful when people agree.” [!!!!!]

The Cuomo administration said that enforcement was as vigorous as ever,
and that Mr. Cox was on target
to avoid $1.1 billion in improper Medicaid spending this year,
even more than his predecessor.
But veterans of Medicaid policing pointed to
important audits that were started by Mr. Sheehan
but have not been released,
and said the inspector general’s office was at a difficult crossroads,
caught between

the Legislature’s allegiances to campaign contributors from the health care field
the governor’s plans to cut Medicaid costs,
which depend on the goodwill [???] of
nursing homes, hospitals and home health agencies.

“An industry that’s regulated doesn’t love the regulator unless the regulator isn’t doing much,”
said Arthur A. Levin, the longtime director of
the Center for Medical Consumers, a nonprofit advocacy organization,
who admired Mr. Sheehan.
“Asking the regulator and the regulated party
to sit down and come to some sort of consensus
on how the regulation should be —
to me, it makes no sense.”

Michael A. Zegarelli,
a past president of the national association of Medicaid oversight officials
and a senior regulator in New York until 2003,
said that by definition,
an audit that found overbilling, fraud or waste
was “going to be adversarial.”

“Sheehan’s successor will have a short leash,” Mr. Zegarelli said.
“Will that be for the benefit of the program, or to keep Cuomo’s constituency happy?”

New York’s Medicaid program, jointly financed by federal, state and local taxpayers,
is the nation’s largest, at $53 billion.
In 2005, an investigation by The New York Times found that
Health Department regulators had uncovered only 37 cases of suspected fraud
in 400 million annual claims,
overlooking red flags like
a storefront dentist whose billings spiked to 991 procedures daily and
a nursing-home operator who took in $1.5 million in salary and profit
the same year he was fined for neglecting the home’s residents.

The 2006 overhaul spurred by that investigation was financed by
a $1.5 billion payment from the federal government with tough terms:
the state had to recoup the money by September 2011 or pay back the shortfall.
To take charge, Gov. Eliot Spitzer in 2007 appointed Mr. Sheehan,
who had prosecuted health care fraud for 20 years
as an assistant United States attorney in Philadelphia.

Mr. Sheehan exceeded recovery targets.
Over all, the state reclaimed 1.2 percent of its total Medicaid spending,
the nation’s highest rate.

But complaints from providers mounted, and were taken up by legislators.
The providers charged that under pressure to meet the federal target,
Mr. Sheehan treated paperwork errors like fraud.
At one legislative hearing, he was accused of “gangster tactics”
for demanding that providers settle with the state
or risk having to pay more based on findings extrapolated from statistical samples.

“Jim Sheehan was able to make up his own rules,”
said Richard J. Herrick, president of the New York State Health Facilities Association,
a nursing-home trade group.
“It wasn’t for purity, it was where can we find money to recoup.”

In June, Mr. Sheehan was dismissed with a month’s notice
in a phone call from Mr. Cuomo’s director of operations.

“He said, ‘We’ve decided to go in a different direction,’ ”
recalled Mr. Sheehan,
who has since been hired as the chief integrity officer and executive deputy commissioner for the Human Resources Administration, which oversees Medicaid in New York City.

A spokesman for the Cuomo administration
would not specify the reasons for the decision,
and Mr. Sheehan said that
as a political appointee, he had no problem with it.
But he disputed providers’ accusations, saying that

the real issue was
his challenge to a powerful industry that is a large employment engine.

“Medicaid is to New York what corn is to Iowa,” he said.
“It’s a heavy lift.”

He said that audits of nursing homes, for example, found that
some had inflated their profits
by needlessly sending every patient to physical therapy
during the month when annual reimbursement rates were calculated.

The nursing-home trade group sought an injunction to stop the audits.
A court dismissed the association’s argument
that Mr. Sheehan had exceeded his jurisdiction.

Mr. Herrick said that the decision was on appeal,
and that his association was revising audit protocols with Mr. Cox,
the new inspector general.
“I have no personal knowledge that facilities followed the practice alleged,”
he said,
“and as a practical matter find it highly unlikely.”

In home health care agencies, Mr. Sheehan said auditors found widespread patterns that violated Medicaid requirements linked to quality of care.

“Nurses are supposed to review the work and design the plan of the home health aides, but there were cookie-cutter plans,” he said, citing one plan that failed to mention that the patient was an amputee or to explain how the aide was to care for the stump.

“Home health aides would not show up, or would be in two places at once,” he added. “One entity billed us 500 times for home health care while patients were in the hospital.”

Mr. Sheehan would not name audited agencies, but two of his former managers said the largest audit was of Visiting Nurse Service of New York, a $1 billion nonprofit group. That audit gained attention a year ago, when an internal report citing tens of millions of dollars in overpayments was leaked to The Wall Street Journal. At the time, the agency’s chief executive was on a task force advising the new governor on how to redesign Medicaid to trim costs.

Richard Rothstein, a spokesman for Visiting Nurse Service, said that under an agreement with the inspector general’s office, he could not talk about the audit, which started in 2008 and has not been released. But he added, “There is absolutely no discussion about fraud,” only “errors in paperwork.”

One example cited in the preliminary report was a bill for an eight-hour-long sponge bath. Mr. Rothstein said that there had been no intent to cheat Medicaid and that the aide who started the sponge bath had forgotten to report that a nursing crisis had intervened before she finished it hours later.

Many providers welcomed Mr. Sheehan’s exit, but Richard J. Mollot, executive director of the Long Term Care Community Coalition, which advocates for nursing-home residents, did not.

“It was politics at its worst to see him leave,” Mr. Mollot said. “They put enormous pressure on that office to sustain their budget, so to then turn around and say they were too aggressive is the height of hypocrisy.”

After Mr. Sheehan’s dismissal, lawmakers unanimously passed a bill curbing the office’s authority. It cut the government’s time to reclaim overpayments to three years from six and let providers submit corrected bills rather than repay.

Mr. Cuomo, an aggressive prosecutor of Medicaid fraud as attorney general, vetoed the bill. “The provider community, as a whole, plays a critical role,” his veto message said, “and many of their concerns reflected in this bill are legitimate.” But, he added, the bill “would potentially allow fraudulent and abusive activity to go undetected or unprosecuted.”

Instead, he ordered Mr. Cox to review policies with “a working group comprised of representatives of provider associations and others.”

Mr. Cox’s confirmation last week, after a nine-month wait, underscored the change in climate. At genial committee hearings, state senators said they were receiving positive feedback from providers, but one warned that the vetoed bill would be resubmitted “if we hear otherwise.”

Mr. Introne, the deputy health secretary, said that Medicaid providers followed rules better now than they did five years ago. Mr. Sheehan agreed, and said his successor was well-qualified. But he noted that dozens of city audits he had asked to start or to release in his new job were still awaiting Mr. Cox’s approval.

Audit figures released by the state show that Mr. Cox’s findings of overpayments have fallen steeply since Sept. 30, when the state met the deadline for the $1.5 billion federal target.

Mr. Cox, a 23-year veteran of audits for the Health and Human Services inspector general, said he involved government lawyers and providers at the outset of an audit and examined every audit himself to make sure its findings could withstand a court challenge. That has held up some audits, he acknowledged, including that of Visiting Nurse Service, which is “still being reviewed and discussed with the entity and its lawyers to see what areas we agree on or disagree on.”

“We’re all about fighting fraud,” he said, and “also about improving program integrity, quality of care, and saving taxpayer dollars. That’s our mission, and we’re sticking with it.”

More than 100 charged in massive Medicare fraud busts in 7 cities in scams totaling $452 mil
By Associated Press, 2012-05-02

Cf. DOJ Press Release:
Medicare Fraud Strike Force Charges 107 Individuals
for Approximately $452 Million in False Billing


Federal authorities charged 107 doctors, nurses and social workers in seven cities
with Medicare fraud Wednesday
in a nationwide crackdown on unrelated scams
that allegedly billed the taxpayer-funded program of $452 million —
the highest dollar amount in a single Medicare bust in U.S. history.

It was the latest in a string of major arrests in the past two years
as authorities have targeted
fraud that’s believed to cost the government
between $60 billion and $90 billion each year.

Stopping Medicare’s budget from hemorrhaging that money
will be key to paying for President Barack Obama’s health care overhaul.

[I would put that differently.
Stopping that fraud is essential to help balance the budget,
irrespective of whether Obamacare is implemented or not.]


Cracking the codes
Thousands of doctors and other medical professionals
have steadily billed higher rates for treating elderly patients on Medicare
over the last decade —
adding $11 billion or more to their fees
and signaling a possible rise in medical billing abuse,
an investigation by the Center for Public Integrity has found.

[A sample article from this series:]

Growth of electronic medical records eases path to inflated bills
In the rush to get the program off the ground, though,
federal officials failed to impose strict controls over billing software,
despite warnings from several prominent medical fraud authorities.
Now that decision could come back to haunt policy makers and taxpayers alike,
a Center for Public Integrity investigation has found.


Medicare fraud outrunning enforcement efforts
By Fred Schulte
Center for Public Integrity, 2013-07-01

Official: agency failed to investigate 1,200 complaints due to staff shortages,
and more cuts coming

ObamaCare oversight among health watchdog cuts
by Fred Schulte
Center for Public Integrity, 2013-07-25

Budget squeeze, staff departures force HHS inspector general
to trim investigative targets


The cuts are “deeply regrettable,” said Malcolm Sparrow,
a professor at Harvard University’s John F. Kennedy School of Government and health fraud expert.
“We’d save a huge number of taxpayer dollars
by doubling the size of these operations.”

Sparrow said fraud artists are adept at quickly figuring out
how to exploit new health care initiatives
and that officials have an obligation to “stay ahead” of them.
“Otherwise three years from now we’ll be saying,
‘how could we not have predicted this mess?’ ”

Louis Saccoccio, chief executive officer of the National Health Care Anti-Fraud Association,
said that OIG audits not only stem financial losses,
but also can protect patients from harm.
Money spent on these efforts “pays for itself many times over,”
he said in an email.

OIG officials contend their investigations typically return $8 for every dollar invested.
They reported fiscal 2012 expected recoveries of about $6.9 billion
and more than 1,100 criminal and civil investigations of individuals or health care businesses.


“OIG will not be able to keep pace with the ACA (Affordable Care Act) expansion,
maintain/expand our highly successful Medicare Fraud Strike Forces,
or keep pace with the expanding Medicare and Medicaid enrollment
and the expected need for growth to combat on-going health care fraud,”
an agency document states.

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