The City Sentinel

Oklahoma health care analysts react to Medicare fraud report

Patrick B. McGuigan Story by on July 3, 2013 . Click on author name to view all articles by this author. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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by Patrick B. McGuigan
Associate Publisher

An Inspector General’s report for the Department of Health and Human Services concluded Medicare databases are riddled with errors and open to fraud. Health care professionals and analysts in Oklahoma had conflicting reactions to the conclusions.

Responding to reports on massive potential for fraud, Nico Gomez, chief executive officer at the Oklahoma Health Care Authority told The City Sentinel, “Frankly I’m not surprised by the story. It is a point of frustration for many of us in the states. We’d like to share more information with our Medicare partner on the federal side, but this is an area of concern we have.”

Gomez continued, “I do think things have actually improved over the last 10 years. For our state, we support a coordinated care approach with eligible populations. We think we can do and have done a good job with our own citizens.”

Asked if the report indicated the feds cannot manage current information, let alone handle a vastly expanded system, Gomez said, “I don’t necessarily have an opinion on that right now. But I don’t think it’s irrational to be asking the questions.”

The IG’s report found the data systems used to catalog the records of Medicare providers were riddled with inaccurate or incomplete information. The report found 97 percent of files studied revealed internal inconsistencies.

The report focused on two Medicare databases that manage important provider information, the National Plan and Provider Enumeration System (NPPES) and the Provider Enrollment, Chain and Ownership System (PECOS).

The inspector general’s report found Medicare’s databases for processing medical providers “inaccurate”, opening the door for potential waste, fraud and abuse. The systems contain information and identifiers of healthcare providers enrolled in Medicare and assist the government system in processing payments to those providers. The report found data in both systems was “often inaccurate and occasionally incomplete, and were generally inconsistent between the two databases.”

Nearly half — 48 percent — of the files containing identifiers assigned to providers by the Centers for Medicare & Medicaid Services were inaccurate. PECOS, which is used to process provider information, had inaccuracies in 58 percent of its files. When provider information from both databases was compared, 97 percent of the files had conflicting information.

Dr. Katherine Scheirman of Oklahoma City, an advocate of ACA and of Medicaid expansion, commented: “I don’t think this report is in any way relevant to the implementation of the Affordable Care Act. In the first place, Medicare is a separate program, unrelated to care provision in the ACA. Insurance/care through the ACA is through either (1) private insurance companies, via the exchanges, or (2) in states that agree to it, expanded Medicaid coverage for those below 138 percent of the Federal Poverty Level. As you know, the states run their own Medicaid programs.

“Of note, this audit was done by the HHS IG, a routine way of improving performance in agencies. These databases are used for paying providers, and do not contain actual medical records of patients, just billing information.”

Dr. Scheirman told The City Sentinel, “Per the IG report, the discrepancies between the two databases were primarily office locations and contact information (phone numbers). The fixes recommended by the IG, and agreed to by CMS, appear reasonable and designed to improve the processes of updating this type of information.”
She also pointed to a recent news report in USA Today finding that the U.S. government has recovered some $14.9 billion in “Medicare fraud money.”

The national report found that CMS did not verify most of the information in either database, raising the possibility that fraudulent information had been used to scam the system. While CMS had processes in place to verify provider data, “the manner in which CMS implemented these processes impeded efforts to ensure that the databases contained accurate information.”

Faced with surging provider applications to fill the increased role of Medicare, CMS allowed for the suspension of other verification processes that may have caught inaccurate data. “The suspension of provider enrollment verification activities at a time of increased application volume could have compromised the accuracy and completeness of PECOS data, increasing the vulnerability of the Medicare program to fraud and abuse,” the IG said.

Two Oklahoma conservatives disagreed with Dr. Scheirman’s upbeat response to the IG’s report.

State Rep. Mike Ritze, R-Broken Arrow, also a physician, observed, “Few of the assorted promises about ObamaCare are being kept, as should have been obvious from the beginning even to mass media commentators or other vaguely sentient beings. Premiums are rising; total health spending continues to jump; coverage is being cut back and cancelled; and employment itself is suffering from what has already occurred and what is around the corner.”

Jonathan Small, fiscal policy analyst for the Oklahoma Council of Public Affairs, the state’s largest free market “think tank,” told The City Sentinel, “The inspector general’s report detailing of rampant and systemic database errors and high susceptibility to fraud is exactly why it is highly likely that Obamacare Medicaid and insurance entitlements programs will fail. The evidence abounds that the federal government is horrible in estimating the cost and operational protocols necessary for large programs.”

Small pointed to Reason Foundation reports noting that the U.S. Congress estimated Medicare would cost about $12 billion by 1990. In fact, he told The City Sentinel, Medicare that year cost $107 billion.

Small added, “Oklahoma and numerous states have significant Medicaid enrollment integrity problems, where enrollees who are ineligible remain on the program because states are reluctant to robustly ensure only those enrolled have continued lawful eligibility. Illinois’ recent first attempt to do this found that two-thirds of those enrollees investigated were ineligible. Senator Max Baucus said it best, this (Obamacare) is headed for a train wreck.”

The IG report, released May 29, came as the White House touted how the Affordable Care Act’s expansion of the government healthcare giant has ensured its solvency until at least 2026. A May 31 press release cited the Medicare Trustees’ annual report, which said the Hospital Insurance Trust Fund’s long run actuarial deficit had been cut by more than 70 percent since the ACA became law, helping to project Medicare solvency for two years longer than the 2012 report.

The White House also highlighted new care models that incentivize providers to manage costs for Medicare patients, asserting, “(O)ur data and health information technology initiatives are driving a wave of innovation as entrepreneurs and innovators develop and deploy new digital tools to help clinicians deliver better care across the country.”

The IG report also noted that CMS oversight allowed for ineffective safeguards in the verification process and suspended others to expedite the processing of provider information.

The inspector general’s office recommended stronger oversight and safeguards after noting that three out of four providers identified inaccurate data in either system.

NOTE: This report is adapted from a story first posted on Virginia Watchdog.

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