Bad Medicine: Fighting Fraud in Healthcare

FraudThe Centers for Medicare & Medicaid Services (CMS) announced a major milestone in the ongoing effort to thwart healthcare fraud this morning. In a press release, CMS reported that their advanced analytics system, called the Fraud Prevention System, identified or prevented $820 million in inappropriate payments in the program’s first three years. The Fraud Prevention System was created in 2010 by the Small Business Jobs Act, and CMS has extensively used its tools to help protect Medicare Trust Funds and prevent fraudulent payments. The system helps identify questionable billing patterns in real time and can review past patterns that may indicate fraud. The announcement comes on the heels of other major anti-fraud wins including one of the most visible (and despicable) cases of fraud. Last Friday, Dr. Farid Fata of Oakland Township Michigan was sentenced to 45 years in prison after prescribing unnecessary cancer treatments to patients to collect $34 million in fraudulent claims from Medicare and other insurance companies. Health & Human Services (HHS) and the Department of Justice announced in June the largest coordinated fraud takedown in history, resulting in charges against 240 individuals, including 46 doctors, nurses, and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $712 million in false billings. Whether you have employer-sponsored health insurance or you purchase your own insurance policy, health care fraud inevitably translates into higher premiums and out-of-pocket expenses for consumers, as well as reduced benefits or coverage. For employers-private and government alike-health care fraud increases the cost of providing insurance benefits to employees and, in turn, increases the overall cost of doing business. Over the last five years, the administration’s efforts have resulted in more than $25 billion returned to the Medicare Trust Fund. In future years, CMS plans to expand the Fraud Prevention System and its algorithms to identify lower levels of non-compliant health care providers who would be better served by education or data transparency interventions. For the full CMS press release, click here.

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