Stemming Medicare Fraud: A Continued Concern on the Hill

Published: July 09, 2014

HHSPolicy and LegislationWaste, Fraud, and Abuse

Medicare program integrity continues to be a topic of high interest for Congressional oversight committees. With over $600 billion being spent annually on the health care of 51 million individuals, it is incumbent upon the federal government to ensure these funds are protected and spent wisely.

CMS estimated that in 2013, $50 billion was improperly paid via the Medicare program.  A review of on the surface shows that the improper payment amounts for the three combined highest risk Medicare programs increased year over year from 2011 to 2013.  However, CMS’s explanation on the site states that this is due to a change in methodology for calculating Medicare Fee-For-Service improper payment amounts.  CMS asserts that the new methodology is more accurate and will allow the agency to better track and reduce improper payments.  

In late June, the U.S. House Energy and Commerce Subcommittee on Oversight and Investigations head a hearing on Medicare program integrity.  Kathleen King, Director of Health Care at GAO, reviewed CMS efforts and accomplishments in reducing Medicare fraud.  She also conveyed GAO’s recommendations for CMS to further reduce Medicare fraud. 

According to GAO, CMS is following the strategies below to reduce fraud in the Medicare program:

  • Provider and supplier enrollment – CMS has implemented actions to strengthen provider and supplier enrollment, including hiring contractors to determine if candidates have valid licenses and locations.
  • Prepayment and postpayment claims review – GAO found that additional prepayment reviews and edits could prevent more improper payments.  For example, GAO investigations found millions of dollars in payments that didn’t correspond to appropriate coverage and payment policies.
  • Addressing identified vulnerabilities – GAO further recommends that CMS carryout GAO recommendations for areas of vulnerability, such as removing social security numbers from Medicare cards.

King stated, “CMS has taken some important steps to identify and prevent fraud, but must continue to improve its efforts to reduce fraud, waste, and abuse in the Medicare program.”  GAO committed to continue its examination of CMS’ strategies in order to help them more systematically reduce potential fraud.  Specifically, GAO studies underway include:  assessment of CMS information systems’ ability to detect and prevent enrollment by fraudulent providers, potential use of electronic card technologies, review of CMS’ oversight for prescription drug integrity, and examination of CMS’ oversight of contractors conducting postpayment reviews.