CMS Official Kuhn Tells Panel New System Will Prevent Fraudulent Medicare Claims From Using Dead Doctors' Names

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Litigation / Medical Malpractice
Article Date: 11 Jul 2008 - 12:00 PDT

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CMS Deputy Administrator Herb Kuhn on Wednesday said that under a fraud-prevention system introduced in May, the agency will cross-check the names of physicians appearing on Medicare claims with the Social Security Administration's database of death reports, CQ HealthBeat reports. Kuhn spoke at a Senate Homeland Security and Government Affairs Investigations Subcommittee hearing, which was held to discuss a subcommittee report released Tuesday that showed CMS paid more than $70 million between 2000 and 2007 in fraudulent claims for durable medical equipment that used the personal identification number of a deceased physician.

Kuhn said that under the new system, all doctors will be assigned a National Provider Identifier, rather than the current Unique Physician Identification Number, to ensure that no dead physician receives an NPI. The NPIs will be cross-checked against death records using SSA's electronic record exchange. Subcommittee ranking member Norm Coleman (R-Minn.) said, "We live in a high-tech world ... Surely we should have the capacity to figure out if doctors are dead." Some panel members said problems could arise when physicians with NPIs die.

According to Kuhn, the agency did not consider this type of fraud to be among its biggest risks when assessing its own vulnerability in 2004. He also said the budget of the Medicare Integrity Program, which protects against fraud and abuse, has been stagnant at $720 million since 2003, despite repeated requests to Congress for an additional $300 million to conduct investigations.

In response to a question from Subcommittee Chair Carl Levin (D-Mich.), Kuhn said no suppliers who submitted claims later found to be fraudulent have returned payments, but the agency withholds accompanying bonuses if claims are found to be fraudulent. Levin suggested that additional funding for MIP could "come from contractors who aren't doing their job."

Kuhn said the competitive bidding program for suppliers of durable medical equipment "gives us a new set of tools to deal with" the risk of fraud. Under the program, suppliers would be subject to an accreditation process to ensure financial and quality standards. "It would put a big stake in the heart of fraud," Kuhn said. The program would be delayed by legislation (HR 6331) approved by the Senate on Wednesday that would stop a 10.6% Medicare physician payment cut (Cooley, CQ HealthBeat, 7/9).

Editorial
"Obsessing over the dead-doctor scam" that cost Medicare nearly $100 million between 2000 and 2007 -- or about three-thousandths of 1% of the $435 billion Medicare spent last year -- is "a little like focusing on the guy stealing some silverware from the kitchen when the house is on fire," a USA Today editorial states. The editorial continues, "In an era of tight budgets, it's jaw-slackening that officials learned of the problem in 2001 but it went on for six more years." Therefore, "it's important to prosecute the fraud and put procedures in place to ensure this doesn't keep happening," the editorial states.

However, USA Today notes that it is "important to put the amount of money in perspective" because the fraud accounts for only a small part of "Medicare's big programs," which are "tougher to handle." According to the editorial, "Medicare is fast becoming a financial disaster." USA Today notes that while it was not "an unreasonable move" for Congress to delay the scheduled fee reductions to physicians, the editorial asks, "does Congress have a better plan for limiting their costs in the future?," adding, "Is there a strategy for taking care of an aging population without letting health care consume the rest of the budget?" The editorial concludes, "There had better be. The dead-doctors scam and other frauds are just a few pieces of a far scarier story" (USA Today, 7/10).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

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