Vendors abuse IT to steal from Medicare

ORLANDO DEBRUCE (odebruce@fcw.com)

Medicare contractors have used technology to steal from the federal health care program despite a responsibility to help fight fraud, waste and abuse, according to a report that the General Accounting Office released today.

"They are turning off software, losing claims and defrauding the government," said Rep. Ron Klink (D-Pa.) "What in the hell is going on?"

During a hearing sponsored by the House Oversight and Investigations Subcommittee, GAO said it identified at least seven of the Health Care Financing Administration's 58 contractors as being actively investigated by the Justice Department or the inspector general at the Department of Health and Human Services for fraud.

According to the GAO report, since 1993 HCFA has collected more than $235 million from six contractors after finding that the contractors' employees deleted claims from the processing system and then falsified documents that otherwise would have been rejected because the services were not medically necessary. Those employees also deactivated checks that typically flag and stop the processing of questionable claims.

"The justification for hiring private fiscal intermediaries in the first place was to provide state-of-the-art private-sector techniques to safeguard public funds," said Rep. John Dingell (D-Mich.) "The record suggests that we may have gotten state-of-the-art private-sector efficiency in fleecing the taxpayer."

Penny Thompson, director of HCFA's Office of Program Integrity, said that despite the problems, some gains have been made. She said the Medicare error rate has been cut in half in just two years, from 14 percent to 7 percent, or $12.6 billion.

Thompson said HCFA plans to upgrade its anti-fraud technology to help curb abuse. "Our goal is to establish a system to routinely evaluate emerging technologies to ensure we possess the most effective tools for fighting Medicare fraud," she said. "We plan to undertake an analysis of these tools and their effectiveness in concert with our law enforcement partners."

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