CMS Proposes Higher Rewards for Medicare Fraud Whistleblowers

On Wednesday, CMS proposed increasing the maximum reward for reporting Medicare fraud to $9.9 million, in an attempt to encourage more whistleblowers to come forward, Modern Healthcare reports (Carlson [1], Modern Healthcare, 4/24).

The proposed rule would increase the reward given to whistleblowers from 10% to 15% of the first $66 million of the final amount collected (Wilson, "RegWatch," The Hill, 4/24).

It also would allow CMS to deny Medicare enrollment to providers who are "affiliated with an entity that has unpaid Medicare debt, deny or revoke billing privileges for individuals with felony convictions and revoke privileges for providers and suppliers who are abusing their billing privileges" (CQ HealthBeat, 4/24).

In a statement, HHS Secretary Kathleen Sebelius said that the proposal "is a signal to Medicare beneficiaries and caregivers, who are on the frontlines of this fight, that they are critical partners in helping protect taxpayer dollars."

HHS noted that the changes would cost the department about $70,000 ("RegWatch," The Hill, 4/24).

CMS Cannot Estimate Amount of Money Lost to Medicare Fraud in DME Program

In related news, CMS officials during a Senate subcommittee hearing on Wednesday said that the agency does not have an estimate on how much federal money is lost to fraud in the Medicare durable medical equipment program, Modern Healthcare reports.

CMS in February reported that two-thirds of the $10 billion Medicare spent on the DME program were "improper payments." However, the agency was unable to determine what portion of the improper payments resulted from fraud and what portion resulted from documentation errors.

CMS Center for Program Integrity Director Peter Budetti told the Finance Committee's Financial and Contracting Oversight Subcommittee that CMS was developing a pilot program that would measure the extent fraud plays in such improper payments. However, Budetti could not say when the Fraud Measurement Pilot -- initially scheduled to focus on home health services -- would be expanded to all of Medicare.

Subcommittee Chair Claire McCaskill (D-Mo.) said the projections were necessary to measure CMS' effectiveness in recouping improper DME payments, noting that in 2011 CMS recouped only $34 million from DME suppliers out of an estimated $5.2 billion in improper payments. She and other subcommittee members also criticized the infrequency with which CMS banned fraud-prone DME suppliers, pointing out that the agency investigated only 75 of 96,000 DME companies in 2012 (Daly, Modern Healthcare, 4/24).

Industry Requests Fewer Audits, Clearer Fraud Guidelines

Also in related news, the Senate Finance Committee on Wednesday released a compilation of 150 reports from health care providers, insurers and suppliers suggesting how Medicare and Medicaid can better combat fraud and prevent waste, Modern Healthcare reports.

The reports came in response to a request for comment issued in 2012, after a group of senators expressed interest in probing the effectiveness of CMS' independent auditing firms. The senators requested the Government Accountability Office audit the auditing firms, and the first of two GAO reports is expected to be published this summer.

The compiled reports requested that CMS:

• Simplify and standardize the auditing process;
• Provide better examples of how to document medical necessity for Medicare procedures;
• Reform how the agency detects improper payments;
• Revise requirements on how much insurers can spend on administrative overhead; and
• Allow Medicare beneficiaries at risk of misusing medications to be restricted to certain providers and have their drugs tracked in real time (Carlson [2], Modern Healthcare, 4/24).