Diagnose and excise fraud in Medicare

0 Comments | Insight on the News, June 19, 1995 | by Michael Bilirakis

We're hearing a lot of conflicting information coming from Washington these days about the future of the Medicare system (see Insight, June 12). Despite all the talk and resulting confusion, I believe the course of action for Congress and the administration is clear.

We must start on common ground and build a Medicare reform bill that will preserve services and choices for beneficiaries, not lessen them. The well-being of beneficiaries should be our top priority and we must act now if we want to ensure the future viability of Medicare.

The reasonable, rational approach is to fix what we know is broken. We should begin by tightening controls against fraud and abuse and eliminating wasteful spending. Individuals who abuse the system cause a serious drain of Medicare dollars -- money diverted from services for beneficiaries.

By any measure, this is a major problem. The General Accounting Office, or GAO, estimates that fraud and abuse represent approximately 10 percent of our total health care spending. FBI Director Louis Freeh recently testified that by conservative estimates, fraud in the nation's overall health care system costs $44 billion annually. At the same time, he acknowledged that "the crime problem is so big and so diverse that we are making only a small dent in addressing the fraud."

As chairman of the Health and Environment subcommittee, which has partial jurisdiction over the Medicare program, I believe it is time for Congress to focus on fighting this abuse. As part of this effort, my subcommittee and the one on Oversight and Investigations have begun a series of joint hearings on waste, fraud and abuse in the Medicare program.

Medicare fraud and abuse encompasses an array of practices, such as overcharging for services, billing for services not rendered and providing services that are unnecessary or inappropriate. One of the most common types of abuse involves the miscoding of reimbursement claims.

For example, "unbundling" is a form of overbilling in which providers submit piecemeal bills for services, rather than charging for the comprehensive (that is, less expensive) procedure. "Upcoding" is the practice of billing for a similar but more complicated service, resulting in a higher reimbursement rate to the provider.

While incorrectly coded claims do not always indicate deliberate abuse, the monetary loss is the same. And although these practices are limited to the provider community, they represent a significant cost to the federal government and Medicare beneficiaries.

According to the GAO, improper billing costs the federal government more than $600 million each year. In fiscal 1994 alone, Medicare beneficiaries paid more than $140 million in excess charges. Sadly, these examples are just a small part of the problem.

With Medicare spending growing by double-digit figures each year, we simply cannot afford to let these wasteful expenditures continue. The federal government must respond to this crisis with innovative approaches and new technology. Of course, any effective solution must include all the players in the health care fraud arena.

Some reforms clearly are necessary, such as providing more money and personnel for the Health and Human Services' inspector general and other law-enforcement agencies that investigate fraud, placing a higher priority on health care fraud prosecution in the Department of Justice and strengthening federal criminal laws against intentional health care fraud. In addition, I believe we should create incentives for beneficiaries to report fraudulent billing practices and grant Medicare contractors more authority to "police" fraud themselves.

Other reforms that should be considered include designing simplified and uniform claim forms for reimbursement, implementing an electronic billing system with strict controls to detect fraudulent c establishing a national fraud database that includes information on final adverse actions against health care providers. Another option is to create an all-payer fraud and abuse program to coordinate the investigation and prosecution of fraud and abuse activities among federal and state agencies.

Last year, I sponsored comprehensive health reform legislation that incorporated similar provisions to address fraud and abuse in our nation's health care system. I am optimistic that this legislation can serve as a foundation for our efforts in the present Congress.

Of course, the most compelling reason to adopt such reforms is the impending bankruptcy of Medicare. According to President Clinton's Medicare Trustees (including Labor Secretary Robert Reich, Treasury Secretary Robert Rubin and HHS Secretary Donna Shalala), the Health Insurance Trust Fund for Medicare Part A will go broke by 2002.

Saving Medicare from insolvency will require the first major reform of the program since its inception. To be successful, however, a bipartisan effort by members of Congress and the administration is necessary. Only by working together will we be able to tackle the problems of waste, fraud and abuse and make significant headway in addressing the fiscal crisis facing Medicare.