MEDICARE FRAUD: Panel Addresses Mental Health Abuses
During a House Commerce subcommittee meeting yesterday, Health Care Financing Administration "officials conceded Monday that they had trusted private mental health centers" to comply with the Medicare program that allowed community mental health centers to designate themselves as providers of outpatient mental health services, the Austin American-Statesman reports (Malone, 10/6). Officials investigating the programs this year found "that 92% of the claims" filed by centers in five states were fraudulent, with $229 million in Medicare reimbursements going to the facilities to fund recreational activities or to pay for unqualified patients without a history of mental illness (Goldstein, Washington Post, 10/6). "We built it, and they came," said Penny Thompson, overseer of the government program. She "conceded that her department has known about abuses in the mental health centers as far back as 1994," however, it was only recently investigated "because other problems loomed so much bigger in Medicare" (American-Statesman, 10/6). Department of Heath and Human Services Inspector General June Gibbs Brown agreed, asserting that "lax" procedures prompted the "proliferation of unscrupulous operators." HCFA only required the facilities to fill out a form attesting that their services were eligible for Medicare reimbursements, without conducting a preliminary inspection. Furthermore, the Washington Post reports that "40 states have no requirements for licensing community mental health centers."
Michael Mangano, HHS's principal deputy inspector general, said the rate of fraud discovered "is the worst I've ever encountered" in the Medicare program (Goldstein, 10/6). House Commerce subcommittee Chair Joe Barton (R-TX), who called for the investigation after learning of the "rampant abuse" described in the two reports, said, "It's a black eye to the federal government to have a program like this that's just grown totally out of control" (Austin American-Statesman, 10/6). Barton added, "We saw it in home health care, and we're now seeing it in these community mental health centers ... If there's anything good about this whole mess, it's that we are really going to do something about this one." HCFA indicated that it will "take strong action against violators" and intensify its scrutiny of new applicants. The centers implicated in the fraud received warning letters from HCFA on Sept. 29 and have 15 days to dispute the charges (Ornstein, Dallas Morning News, 10/6). According to Thompson, "most of the 1,000 community mental health programs would be excluded from Medicare funding by the end of the year." The Austin American-Statesman reports that "[t]he schemes to bilk the government are especially prevalent in Texas and Florida, which together account for more than half the total billings in the outpatient mental health program" (10/6).