Fraud, Waste, and Abuse Gaining Attention

Reston, Virginia—Cases involving healthcare fraud, waste, and abuse have recently been gaining more widespread attention. News reports have detailed instances in which people are selling illegal prescriptions or taking advantage of other loopholes. 

Medicare and Medicaid fraud, in particular, is becoming more prevalent, as well. However, speakers at the Leadership Summit on Medicaid Managed Care revealed that state and federal governments and other agencies are also doing a better job at identifying and prosecuting the offenders. During a keynote session titled Perspectives on Improving Fraud and Abuse Prevention and Detection, they mentioned that the growing number of people enrolled in Medicaid only adds to the potential for fraud, waste, and abuse. Still, governments are aware of the threat and are attempting to thwart the attempts. Jaysen Eisengrein, senior vice president of Health Integrity, LLC, served as the moderator. Mr. Eisengrein is a retired special agent in the Office of the Inspector General at the US Department of Health and Human Services, where he investigated fraud.

Founded in 2006, Health Integrity has 300 employees and subcontractors in 16 states. The company contracts with the government to analyze, audit, and investigate Medicare and Medicaid fraud, according to Mr. Eisengrein. Mr. Eisengrein estimated that managed care now accounts for approximately 70% of Medicaid programs and is expected to increase in the coming years. With the growth, though, comes consequences. He has seen numerous instances of fraud, including billing for services not rendered, medically unnecessary services, unnecessary coding, or kickbacks. “Fraud will follow the money,” Mr. Eisengrein said. “Fraud will follow its way to [Medicaid managed care].”

Compliance Perspective

Stuart Freedman, MPH, director of compliance at the University of New Mexico Health Sciences Center, said provisions from the Patient Protection and Affordable Care Act (ACA) will lead to more opportunities for fraud, waste, and abuse. By 2015, 16 million additional people are expected to enroll in Medicaid. Around the same time, each state will have its own health insurance exchange, where people can purchase insurance, compare plans, and determine if they are eligible for Medicaid. Mr. Freedman said there will be risks associated with the exchanges as beneficiaries move to and from the exchanges and Medicaid depending on eligibility. He added that states have been proactive preparing for the influx of Medicaid enrollees, collaborating and sharing best practices. The ACA includes increased funding and several provisions intended to fight fraud, waste, and abuse. Mr. Freedman said among the initiatives will be increased screening to identify potentially fraudulent providers and suspend payments to providers who are alleged to have defrauded Medicaid.

According to Mr. Freedman, the increased scrutiny has paid dividends. For instance, he mentioned a case in late February in which the US Department of Justice accused a doctor, his office manager, and 5 owners of at-home health agencies in a $374-million healthcare fraud case. They allegedly sent $350 million in fraudulent bills to Medicare and $24 million in fraudulent bills to Medicaid. “The storm is really brewing,” Mr. Freedman said. “The government is getting much better [at detecting fraud, waste, and abuse]. They’re watching much more closely now.”