KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Lawmakers Try To Weed Out Fraud And Waste

Lawmakers target Medicare and Medicaid fraud to generate greater savings in health care reform while doctors worry about efforts to cut waste. The Wall Street Journal reports: "The federal government needs to further step up efforts to fight Medicare and Medicaid fraud to generate more savings to help pay for a health-care overhaul, lawmakers said Wednesday. ... Health-overhaul legislation moving through Congress contains provisions to beef up the government's antifraud effort. The U.S. loses at least $60 billion to health-care fraud every year, and some estimates put the cost as high as 10% of the nation's total health-care spending, which exceeds $2 trillion."

The Journal also adds, "Sen. John Cornyn (R., Texas) said government officials still need to figure out why Medicare and Medicaid have a higher rate of fraud than private insurers, especially since Congress is considering creating a public-insurance program. Bill Corr, deputy HHS secretary, said HHS and the Justice Department are making progress, especially by using specialized teams to ferret out fraud. But he agreed that the task is huge. Medicare alone, he testified, receives 4.4 million claims each day, which have to be paid between 14 and 30 days. The Medicare program, which spends more than $400 billion a year, reviews only 3% of those claims, he said. Medicare has reported that it improperly paid more than $10 billion in claims in the fiscal year that ended Sept. 30, 2008" (Zhang, 10/28).

The Associated Press reports: "The Obama administration is considering a way to bring together patients, doctors, insurers and law officers to combat fraud in Medicare and Medicaid, a Health and Human Services official said Wednesday. The summit, still under consideration, would enhance an increased effort to find and prosecute fraud in the programs, said William Corr, deputy HHS secretary. ... The administration created a Justice Department-HHS team last May on preventing health care fraud. ... The government is using new methods of data analysis and intelligence gathering to detect patterns of crime and the regions with the worst problems, he said" (10/28).

The Indianapolis Business Journal reports on doctors' criticism of lawmakers' efforts: "[S]ome doctors say the way the Senate Finance Committee bill tries to [cut waste] would be disastrous. The bill would require all physicians to participate in Medicare's Physician Quality Reporting Initiative by 2012 and then, in 2014, use those reports to cut Medicare reimbursement by 5 percent for any doctor whose level of testing and procedures is in the top 10 percent of all doctors in his or her field. ... They worry the government will not be able to collect the data needed to make sure the new law doesn't punish doctors who do lots of tests and procedures because they see the sickest and poorest patients" (Wall, 10/28).

Meanwhile, the Houston Chronicle reports: "Seven people associated with a medical clinic have been indicted for alleged Medicaid and Medicare fraud and federal authorities seized millions of dollars in cash and property in Mississippi and Texas, court records said. Statewide Physical Medicine Group Inc. billed Medicare and Medicaid for more than $39 million in services in Mississippi during the alleged conspiracy, from 2000 to 2005, according to the indictment. The government agencies paid out $18 million. It's not clear how much of that was obtained by allegedly fraudulent billing. The government has seized more than $3.6 million from various accounts" (Mohr, 10/28).

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