DOJ Sweep Nets 91 for $430 Million in Alleged Medicare Fraud

The US departments of Justice and Health and Human Services last week announced the indictment of 91 for alleged fraud involving Medicare and Medicaid reimbursements totally $430 million.

We offer the following two observations:

First, the charges come on the heels of recent investigative stories about alleged irregularities by healthcare providers who may have been upcoding Medicare claims to receive reimbursements at higher rates. These articles received wide distribution by other media, which repeated and sometimes exaggerated the claims of the original articles, with headlines that stated as fact that upcoding by physicians cost Medicare $11 billion, even though no such thing was proved.

Federal authorities have been investigating upcoding since at least the spring when the Inspector General’s Office of Health and Human Services released a report on the trend. So how much of that $430 million in fraud identified by authorities was the result of alleged upcoding? Apparently none.

Second, the Department of Health and Human Services announced that concurrent with the arrests it “used new authority from the health care law to stop future payments to many of the health care providers suspected of fraud,” according to the HHS press release on the fraud charges. The Patient Protection and Affordable Care Act contains numerous anti-fraud measures, including providing the Centers for Medicare and Medicaid Services with the discretionary authority to withhold reimbursements to providers accused of fraud. The purpose of the law, according to HHS, is to save “Medicare resources and taxpayer dollars from being lost to fraud in the first place.”

While none of the fraud alleged last week was for upcoding, that is not to say there won’t cases in the future, especially in light of the media attention the alleged practice received. For argument’s sake, let’s suppose a physician or group of physicians affiliated with a hospital are accused of upcoding. The Centers for Medicare and Medicaid Services can suspend all Medicare reimbursements to that provider, not just those involving the offending physicians.

Most healthcare providers carefully track their Medicare billing trends. From a risk management standpoint, it would not hurt providers to take a harder look at those metrics, on a department-by-department basis if not on a physician-by-physician basis to identify any anomalies and then ascertain if documentation is adequate to support those trends. As we now operate in an environment where even an accusation can be financially disastrous, forewarned is forearmed.