President Obama signed a presidential memorandum March 10 that directs all federal departments and agencies to expand and intensify their use of payment recapture audits under their current authority to crack down on waste and fraud in Medicare, Medicaid, and other government programs. He also announced his support for the Improper Payments Elimination and Recovery Act, which would expand the ability of government agencies to fund the audits with recaptured payments.

The president likened his initiative to that of Medicare’s Recover Audit Contractor (RAC) pilot program.

Currently, using reclaimed funds to pay for recaptured audits is only possible for Medicare Fee-For-Service (FFS) program payments and for government contracts at the 20 out of 24 major government agencies that do more than $500 million in government contracting.

President Obama’s 2011 budget also devotes more than $1.8 billion for program integrity—an increase of $225 million (or 14 percent) over 2010—to combat waste, fraud, and abuse in the Medicare, Medicaid, and CHIP programs.

President Obama, in a March 2 letter to Congressional leaders, also expressed interest in a proposal suggested by U.S. Sen. Tom Coburn (R-Okla.) at the bipartisan health care meeting on Feb. 25 to use undercover investigations to further combat fraud.

10 Responses to “President Obama Cracks Down on Health Care Fraud”

1. Janet Hawkins, CPC Says:
   March 17th, 2010 at 9:58 am

   Ok, so where is RAC in all of this??? Medicare set up the four companies to recover monies that were not paid out correctly why are we AGAIN spending more money to recover funds when this program is in place already??? Did CMS forget to tell the President they are doing this already or are they happy to collect yet more money?? While I believe we need to pay claims properly we all know RAC will have a massive “paper” mess in every office and hospital in America once they get rolling.

   Even on TV there is no talk of RAC is AAPC the only that knows about this??

2. Julie Chicoine, Esq, RN, CPC Says:
   March 17th, 2010 at 10:33 am

   Janet, As a health care attorney with many years of fraud and abuse experience, I hope that I can clarify your concerns.

   The government has validated that for every dollar spent going after health care fraud, they recover $14 so it’s a good return on investment. Recovery Audit Contractors are private contractors hired by CMS to recover inappropriate payments made under Part A and B. Outsourcing (to RAC’s) is an efficient and cost effective way to go after improper payments while limiting government size and bureaucracy.

   RAC’s were implemented under the former administration (back in 2003) and were a wise investment having recovered nearly $900 million back to the Medicare programs. In fact the overhead costs of RAC’s is merely a fraction of the money restored to the Medicare Trust Fund.

   The Presidential memorandum merely continues this process and takes it to a new level as health care fraud is evolving all of the time, especially with new technology. By way of example, organized crime is now getting increasingly involved in fraudulent billing scams, especially in the use of identity theft (patient and providers). The government’s initiative seeks to keep the health care programs ahead of the fraud and abuse curve so that tax dollars going into the Medicare and Medicaid (and other programs like IHS, PHS, DoD, VA, etc) programs are spent wisely. By the way, this is one of the very few topics that enjoys bipartisan support in Congress,which speaks volumes in these devisive times.

   My impression is that the AAPC is aware of RAC’s as is the American Medical Assocation and the American Hospital Association. In fact the AMA and AHA have worked with RAC’s and CMS to minimize the impact of RAC activity including limiting the time frame for claims “look backs;” limiting “records requests” and ensuring that providers (hospital and physician alike) have some input in the process. I have seen many AAPC representatives (I am thinking of Deb Grider at the moment) at AMA meetings, where their input on RAC’s and other topics has been invaluable and well received. The general media does not talk about RAC’s but then again, they don’t take on substantive issues in general, which is why I rely on professional publications like the AAPC for important information.

   Finally, given the fact that aging boomers will significantly impact health care costs, I expect that private insurance companies will initiate and/or step up their own fraud and abuse oversight activities in the next few years (since the feds have demonstrated the cost benefits of such an endeavor) so stay tuned.

   Hope this helps.

   Julie Chicoine, Esq., RN, CPC

3. Lucy Leonard, CPC-A Says:
   March 17th, 2010 at 10:43 am

   How do you let someone know when someone is over-paid? Recently, I ordered Thermoskin products and saw my EOBs! I could not believe the kick-backs and reinbursements for these products. Sure, I want providers to get paid but not at high-way robbery prices just because I have good insurance.

4. Zena McConnell, CPC Says:
   March 17th, 2010 at 11:19 am

   Talk about waste and abuse. There ia already a high percentage of cost involved defending physician charges; coders, medical records reproduction, outstanding insurance reimbursement, internal auditing, etc. RAC reviews are only one of the entities medical practices have to answer to. There are CERT requests and OIG as well. It is said that these will not overlap, but where will the bounty hunters fall in this and now under cover investigators. The cost of the paperwork this administration is implementing alone is enough to bankrupt Medicare and Medicaid! It is overkill and a burden that our patient’s will bear in the long run because the quality of medical care will be compromised in every way, inpatient and outpatient care. This administration needs to examine the meaning of waste and realize they are driving the cost of healthcare through the roof and compromising quality.

5. Carolyn Lookabill Says:
   March 17th, 2010 at 11:41 am

   The RAC program found over $270 million in overpayments during the demonstration project alone. While the national implementation began in January, not all provider types have had any impact, either through the automated or complex reviews. Our company provides training and assistance to providers. In some states, we find that providers have still not heard of the RAC audit. Of course, many provider types are not prepared for the future. Larger provider types such as hospitals, large physician practices and larger LTC providers are all gearing up with compliance programs, RAC prep teams and hiring of certified coders. Many of the overpayments in the demonstration project were due to “upcoding”, common errors, documentation issues that didn’t support a charge to chart review, etc. These monies were paid to providers and then were taken back in recoupments. The Medicare program will not have funds for baby boomers if the program is not managed more efficiently. Surely, there will be some issues but the benefits of the program should outweigh the expense of it. The automated reviews will be based on algorithms and won’t involve any additional paper. The complex reviews will involve some paper but most records and correspondence can be sent electronically. No one likes audits but if providers are doing everything correctly, there won’t be a takeback or recoupment. Personally, I want the Medicare monies to be there when I retire. Regulatory compliance is a tool to help protect the Medicare trust. The other audit programs for Medicaid, OIG Workplan etc. will eventually protect our available dollars too.

6. Stephanie Kimbrel CPC, CPCI CPCH Says:
   March 18th, 2010 at 5:35 pm

   Unless something has changed, there is no money going out to pay for RAC audits by CMS as those are paid on a commission only basis. It has been my experience that the providers rarely code correctly unless they have hired certified coders, and even then often times the coders have their “hands tied” and are not allowed to change codes without provider approval. Many providers cannot afford CPCs, therefore rely on their own way of coding, which of course is usually upcoding. That is why there is a need for these audits.

7. Cheryl Sims Says:
   March 20th, 2010 at 1:20 pm

   I have worked for a solo family physician for 24 years. I can tell you with absolute certainty that the government, primarily Medicare, has been the main driver of increasing medical costs! While I am certain that there are SOME cases of intentional abuse among Medicare providers, the vast majority are surely in our shoes-overburdened with complex regulations and not able to afford sufficient staff to keep up. I absolutely CRINGE at the thought of even more intrusion on our practice. We used to see 60 to 70 patients a day with 2 1/2 front office staffers. We now have 5 in the front office and I daresay could use more. The government forces us to update computers and software to keep up with THEIR changes in billing requirements-heck, they forced us to get computerized in the first place. When I came to work here, everyone was charged one flat rate for an office visit, the patients all felt it a very reasonable charge and the free market (i.e. competition) kept fees reasonable. Now everything is driven by Medicare allowables, commercial insurance reimbursement is based on it, regular patient fees have to be more than that…..the prices for medical care for everyone are basically set by the government and we get blamed for it!
   My employer, a good old fashioned real family doctor, originally tried to undercode all Medicare visits, just to be on the safe side. Poor thing got in trouble and had to do some on line Medicare “education” on coding because of course, he fell off the famous “curve”.
   Good grief people ! No we don’t need more watchdogs, we need LESS interference. I know, I have had a front row seat on the farce that has been playing out over the last quarter of a century and I wish I could sit across from President Obama in a discussion on national televison !! Medicare has become a monster and we should all just opt out and refuse to feed it before it grows too big to stop.

8. Linda Niles Says:
   March 21st, 2010 at 8:15 am

   How about insurance companies have to follow the same rules paying claims as providers are required to follow to code the claim? How about we put we put a CPT/ICD9 book together for attorneys. You know simple little things like having a flat rate for divorce, work comp injury, liability cases etc., of course if the decision to accept the client’s case is made in the initial meeting with the attorney, it is included with the next 3 months of representation. If it is a divorce and there are children involved, I feel that should be considered a multiple representation with the same family so any charges dealing with children should be a discount of 50% for the first child and 25% for each there after. Now if there is a business involved I think that could be signifigantly separetly identifiable so to speak, so I would be okay with allowing 100% of the business flat rate, but if we are going to follow the same rules providers have to follow, 50% discount off of the business flat rate. (Kinda like a 43235 and 45378, one goes down the small intestine and one goes up the large, the risk for injury of two separate body organs is there but we are only reimbursed for 1/2 the risk on one site.) Now of course if you have children and a business involved 50% on your 2nd most expensive flat rate and 25% each business/child thereafter. Then there is the issue of UCR. I can’t wait to see the day an attorney writes off 50-75% or more, of his/her fee because the government “says so” Outrageous? Maybe, but welcome to the proveder’s world.

9. Denis Says:
   March 29th, 2010 at 11:19 am

   Without watchdogs, some doctors, just like every other group, would abuse the system. It has happened before, that’s why we have Stark and other rules, not because legislators (no saints themselves) have nothing better to do but because physicians and other providers were abusing the system (i.e. kickbacks for lab referrals, unnecessary referrals to physician owned diagnostic centers, etc.). Medical providers have proven that as a group they must be watched where public funds are concerned. Put it another way, you usually don’t mind having police around unless you are committing crimes.

10. Cheryl Sims Says:
    March 31st, 2010 at 7:31 am

    Denis, here’s the problem. With Medicare, the rules and regulations are so complicated !! It’s too easy to be doing something wrong and not even be aware of it . Even coding E & M visits is difficult. A doctor that is trying very hard to do things correctly can find himself accused of abuse, and the more scrutiny, the more likely that eventually they can find something wrong. I would like to see our congressmen and our president subjected individually to this amount of scrutiny and the public constantly warned to watch them “for FRAUD” !! As to the police reference, I DO get nervous in the presence of police and I have NEVER intentionally broken a law. Don’t even speed. Just afraid that I will accidentally do something and get in trouble I guess….

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