Meet our writers

Win $1,000







News May 2012

Washington Watch

Medicare Fraud Crackdowns

By Alan M. Schlein

If you’ve ever tried to understand your Medicare bill, you will clearly applaud Medicare’s new rollout of its revamped billing statements.

Three big developments have occurred on efforts to curb the huge, ongoing problem of Medicare fraud.

First, Medicare has overhauled its billing statements in an effort to help seniors understand the complicated forms and to help consumers point out fraud problems.

At the same time, the nation’s largest drugmakers have paid at least $8 billion in fines for repeatedly defrauding Medicare and Medicaid over the past decade, a USA TODAY newspaper study found.

Meanwhile, federal law enforcement officials recently announced what they called the largest healthcare fraud case in the nation’s history, indicting a Dallas-area physician for allegedly bilking Medicare for nearly $375 million in billings for nonexistent home healthcare services. As a result of the indictment, 78 home health agencies that were working with the physician, Dr. Jacques Roy, are being suspended from the Medicare program for up to 18 months.

If you’ve ever tried to understand your Medicare bill, you will clearly applaud Medicare’s new rollout of its revamped billing statements. After two years of work on this, Medicare has overhauled its billing statements in an effort to make it easier for consumers to read and to help you find bogus charges. The new format, which is now available on Medicare’s secure website, http://www.mymedicare.gov includes larger type and explanations of medical services in clear English. A revised paper version, which is mailed to seniors every three months, was phased in earlier this year.

The new website points out how consumers can make a difference. Last year, suspicious fraud activity reported to Medicare resulted in saving taxpayers $4 billion, the department says and it highlights a program that has been in place for a while, but has never been mentioned on its regular forms – that people who provide tips leading to uncovering fraud are eligible for up to $1,000 in rewards.

Making it a more consumer-friendly document and also a better fraud-fighting tool, Erin Pressley, director of creative services for the Centers for Medicare and Medicaid Services, told Kaiser Health News recently “If they are paying attention to these documents, they are going to be the best defense we have. … It shouldn’t be a scavenger hunt.”

Until the new forms, the Medicare Summary Notices (billing statements), have been like deciphering your dozens-of-pages bill written in a foreign language. Doctors, who understand the medical jargon and the abbreviations even complained about how complicated the bills were to interpret. As a result, your bill could have included fraud and you might not have known it.

But the consequences of fraud were often felt by individuals who didn’t know what hit them. If Medicare pays for something you didn’t receive – like physical therapy, for example – then later when you really needed physical therapy, Medicare could deny your claim, because the services were already provided for, at least on paper.

Now the redesigned form aims to make sure you understand what services you are actually receiving from Medicare. Government officials say they spent almost two years on the revisions and conducted extensive rounds of focus group with seniors around the country to make sure the forms are 1user-friendly and understandable.

Meanwhile on another Medicare fraud front, a huge fight on brand name medications made by big pharmaceutical companies like Pfizer and Merck is underway in the nation’s capital – and has potentially severe consequences for seniors.

As Medicare and the Justice Department crack down on fraud, Pfizer, the maker of drugs that help alleviate arthritis and other ailments, and Merck, another pharmaceutical giant, among others, are fighting efforts to prevent them from getting government contracts because of repeated fines involving cases of Medicare fraud.

Pfizer has paid almost $3 billion in fines since 2002 and entered into three corporate integrity agreements with the Department of Health and Human Services aimed at preventing future fraud, a review of Medicare and Justice Department records show, according to a recent USA TODAY story.

Merck paid $1.6 billion in fines since 2008 to resolve claims it was not paying proper rebates to the government. Both companies and others, are fighting attempts by Congress to exclude them from government business because of their history of fraud. That kind of exclusion could mean that specific medicines seniors need are no longer available under Medicare.

Overall, the nation’s largest drug makers have paid at least $8 billion in fines for repeatedly defrauding Medicare and Medicaid over the past decade, but they remain in business with the federal government, at least in part, because they are often the sole suppliers of critical products, the records show.

What makes penalizing these companies a problem for Medicare according to government investigators, is that if they prohibit some of these companies from providing medicines to Medicare and Medicaid beneficiaries as punishment for bad behavior, that would leave beneficiaries without drugs patented through a particular company. This is a dilemma that could result in lawsuits and all kinds of problems for Medicare and Medicaid with elderly patients being penalized for no reason of their own.

The other option is for the government to force the companies to enter corporate integrity agreements that require government oversight and a promise not to defraud the government again – a promise that often goes unkept.

To change that trend, the government announced in 2010 that rather than exclude an entire company, investigators would go after individuals within a company. The Justice Department and the Food and Drug Administration are trying to implement that now. But dropping the company as a penalty for bad behavior remains the sledge hammer needed to get the companies to rein in abuses.

In New York City, law enforcement recently uncovered and arrested a plot involving 10 doctors, 9 separate clinics and 105 different corporations -- all in service of a health care fraud ring that federal authorities say conspired to steal more than a quarter of a billion dollars from insurance companies.

Last winter, the multi-agency Medicare Fraud Strike Force made a massive bust in which more than 100 doctors, nurses and physical therapists were charged with fraud in nine states, including a trio of doctors and 17 others in South Florida who altered the diagnoses and medications of thousands of patients to make it look like they qualified for purported group therapy sessions at American Therapeutic’s chain of clinics, costing the taxpayer-funded Medicare program hundreds of millions of dollars, prosecutors charged.

And most recently, in the biggest Medicare fraud case in history, federal law enforcement officials indicted a Dallas area physician for allegedly bilking Medicare for nearly $375 million in billings for nonexistent home health care services. After working for several years to stem a rampant rise in health care fraud around the country, FBI agents arrested Dr. Jacques Roy, a physician for 28 years. Some 78 home health care agencies that were working with the physician, will be suspended from Medicare for up to 18 months.

Under the alleged fraud scheme, the doctor and his office manager, who was also charged, allegedly sent healthcare “recruiters” door-to-door asking residents to sign forms that contained the doctor’s electronic signature and stated that he had seen the residents professionally for medical services he never provided. Among the places he allegedly recruited were a homeless shelter in Dallas, signing up people with $50 bonuses to street people they coaxed from a nearby parking lot and signed up on the bogus forms.

 

Also contributing to this report were: Kaiser Health News.org, New York Times, CNN, USA Today and the Los Angeles Times.

Alan Schlein has been covering the national Washington beat for Senior Wire News Service for over two decades.

Meet Alan