MEDICARE FRAUD: Two New Reports Unearth More Fraud
Medicare made an estimated $72 million in excessive payments for orthotic devices in 1998 and acute-care hospitals submitted $224 million in questionable claims for outpatient psychiatric services in 1997, according to two separate reports issued by HHS Inspector General June Gibbs Brown. While a healthy economy has propelled Medicare's financial situation, fraud, waste and abuse, as evidenced by these two reports, "continue to plague the $200 billion-a-year program." The $72 million in excessive payments for orthotics is based on a sampling of 500 Medicare beneficiaries who had orthotic claims in 1998. According to the report, 22% of the devices were "miscoded," meaning that Medicare was billed for more expensive devices than what was actually provided to the patient. Another 7% of the devices were not "medically necessary," and in 20% of those cases, inspectors were not able to find who had prescribed the device; physicians had no record of the patient listed in the claim or physicians claimed they had not ordered the device. Sen. Tom Harkin (D-Iowa) said Tuesday that legislation he has introduced would mandate reform in payments for orthotics, limiting payments only to suppliers certified by professional orthotics organizations. According to the report non-certified suppliers "were the most likely to overcharge Medicare for orthotic devices."
The report on outpatient psychiatric services at acute-care hospitals is based on claims for 10 states, including California, Texas, Florida, New York and Pennsylvania, that were responsible for 77% of claims submitted by hospitals in 1997. The hospitals had submitted claims totaling $224.5 million for "unallowable or unsupported" services, representing 58.8% of the amount claimed nationwide. Inspectors found that services often were "not documented," "not reasonable" or were "rendered by unlicensed personnel." Brown recommended that HCFA require private insurance companies processing Medicare claims to step up oversight and insist that insurers initiate recovery of inappropriate claims (Pound, USA Today, 4/4).