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Program Integrity How much money can combating health care fraud and abuse save?

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health care fraud and abuse save? Alliance for Health Reform March 5, 2012 ... Harvard Professor Malcolm Sparrow. Senate Judiciary Committee. – PowerPoint PPT presentation

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Title: Program Integrity How much money can combating health care fraud and abuse save?


1
Program Integrity How much money can combating
health care fraud and abuse save?
  • Alliance for Health Reform
  • March 5, 2012

2
Jim Frogue
  • Partner
  • FrogueClark, llc
  • JIM_at_frogueclark.com
  • www.frogueclark.com

3
How much fraud?
  • Hundreds of billions of dollars in waste and
    fraud...
  • President Obama speech to Joint Session of
    Congress. Sept 9, 2009.
  • These schemes steal as much as 100 billion a
    year from Medicare and Medicaid.
  • Newt Gingrich and AARP CEO Barry Rand. Orlando
    Sentinel. Sept 29, 2010
  • health care fraud and abuse (is) hundreds of
    billions per year
  • Harvard Professor Malcolm Sparrow. Senate
    Judiciary Committee. May 20, 2009
  • Medicare fraud, estimated now to total 60
    billion a year
  • Steve Kroft, 60 Minutes. October 25, 2009
  • Institute of Medicine (2011) and Thomson Reuters
    (2009) suggest a third of all health care
    spending is fraud, waste and avoidable
    inefficiencies.
  • Americans think 51 cents of every federal dollar
    spent is wasted.
  • Gallup. September, 2011

4
Underestimating Fraud?
  • Many people with access to the information have
    strong incentives to underreport the prevalence
    of fraud.
  • Providers
  • Punishment fines and/or jail imprisonment
  • Reduced payment rates
  • Academics
  • One of my deep regrets is to discover that
    academia has paid almost no serious attention to
    this critical problem. Harvard Professor
    Malcolm Sparrow
  • State Health Officials
  • Admitting failure loss of job and/or reduction
    funding
  • Avoiding unrealistic expectations (X of spending
    is fraud X budget cut)
  • Returning funds to federal government that are
    not recoverable by state
  • Most funds are federal (90-100 funding for
    expansion population is federal)
  • Prosecutions can cost more than the recoveries

5
The Fraud Continuum
  • Fraud
  • Deliberately false claims, identity theft, etc
  • Abuse
  • Upcoding, bill-splitting, excessive testing, etc
  • Waste
  • Coding errors, duplicate tests, prescription
    interactions, etc
  • Beneficiaries overusing free care in a
    third-party payer system. See, Patients in
    Florida Lining up for All That Medicare Covers,
    by Gina Kolata, New York Times. September 13,
    2003.

6
Examples of Fraud
  • Texas doctor and five accomplices arrested and
    accused of bilking Medicare and Medicaid for 375
    million over six years
  • February 28, 2012. USA Today
  • Medicares new 77 million computer system
    launched mid-2011 saved 7,591 in six months.
    Senator Carper Did they leave out some zeros?
  • February 23, 2012. Washington Post
  • Medicare spending on artificial feet went up 58
    (35m) 2005-2010 while amputations were declining
    according to Avalere Health study
  • February 15, 2012. AP
  • Los Angeles minister sentenced to 15 years in
    federal prison for 14.2 million Medicare scam
  • January 6, 2012. CNN

7
Home Health Fraud Concentrated in 25 Counties
8
100 billion annual Medicare/Medicaid
fraud? What is detected What is
prosecuted What is convicted What is
recovered 4.1 billion

9
Supply Chain Management Expertise of World-Class
Companies
10
Legislation
  • Fighting Fraud and Abuse to Save Taxpayer Dollars
    (FAST Act) introduced by Senators Carper and
    Coburn with 35 cosponsors. Introduced in the
    House by Congressmen Peter Roskam and John
    Carney.
  • Medicare Data Access for Transparency and
    Accountability Act (Medicare DATA Act) by
    Senators Grassley and Wyden
  • Medicare Common Access Card Act of 2011 by
    Senators Wyden and Kirk

11
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