Most States Do Little to Discourage Medicaid Fraud, Report Finds
"Medicaid is at risk for billions of dollars in improper payments" because states are not doing enough to control payment accuracy and fraud, a report released Tuesday by the General Accounting Office found. Completed at the request of House Energy and Commerce Committee Chair W.J. Tauzin (R-La.) to assess how states prevent and control improper payments, the report found "limited" efforts to "identify billing mistakes or abuses." The findings of the study, called "Medicaid -- State Efforts to Control Improper Payments Vary," are based on surveys of state Medicaid officials, site visits to state Medicaid agencies and state studies on Medicaid payments. The report found that the exact amount of funding lost to improper payments was "not known" because "few states measure the overall accuracy" of reimbursements. Although it is "impossible" for states to check every claim and payment, the report found that "lax administration" increases the risk of improper reimbursement. Half of the states spend less than one-tenth of 1% of their Medicaid budgets to "safeguard program payments," and few states secure all federal funding available to combat fraud because doing so would mean increasing their own spending. The report noted that the portion of improper payments made due to fraudulent claims -- while "even harder to measure" than "inadvertent errors" because of fraud's "covert nature" -- can involve "significant" losses. Investigators found that methods to defraud Medicaid include:
- "Bump and run" schemes in which individuals bill for a short period for services not provided, stop before being detected and then begin the scam again under a different name;
- False invoices provided by wholesalers to "substantiate false claims";
- "Marketers" who pay beneficiaries for the use of their Medicaid identification cards for improper billing;
- Theft of Medicaid identification numbers to bill for services not provided.
But the report also found "promising recent activities" to control improper payments. For example, many states are appropriating more resources to detect and prevent fraud, with some implementing computer systems that can review payments and identify suspicious billing. The study also found states adopting "stricter" fraud and abuse laws and policies. On the federal level, the report found that efforts to control Medicaid fraud primarily include technical assistance from the Centers for Medicare and Medicaid Services (formerly HCFA). The agency has "recently taken a more active role" in helping states' efforts, facilitating the exchange of best practices, holding conferences on computer technology and providing guidance on combatting fraud under Medicaid managed care (GAO letter, 6/7). In response to the findings, Tauzin said, "Hopefully, this report is a wake-up call to many states. More must be done to ensure that federal and state taxpayer dollars meant to fund Medicaid actually benefit the millions of Americans who count on the program for quality health care" (Tauzin release, 7/10). The report is available online at http://energycommerce.house.gov/107/reports/d01662.pdf. Note: You will need Adobe Acrobat Reader to read the report.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.