CMS Press Release

[Guest guest]

Please take particular note of the following from this CMS Press Release:

" As a result of combining the data, CMS can identify previously undetected

patterns, such as " time bandits, " providers who bill for a total of more

than 24 hours in a day in both programs. "

The issue of proper CPT coding has never been more important.

Ken Mailly, PT

Mailly & Inglett Consulting, LLC

Tel. 973 692-0033

Fax 973 633-9557

68 Seneca Trail

Wayne, NJ, 07470

www.NJPTAid.biz

Bridging the Gap!

CMS NEWS: CMS STRENGTHENS EFFORTS TO REDUCE FRAUD AND ABUSE IN

MEDICARE, MEDICAID

CMS NEWS

FOR IMMEDIATE RELEASE

CMS Public Affairs

August 27,

2004

CMS STRENGTHENS EFFORTS TO REDUCE FRAUD AND ABUSE IN MEDICARE, MEDICAID

Centers for Medicare & Medicaid Services Administrator Mark B.

McClellan, M.D., Ph.D. today announced a new CMS initiative and a proposed

regulation to protect the nation's largest federal health programs from

fraud and abuse and further reduce improper payments through the use of

enhanced electronic tools now available.

" America's taxpayers - and all of our beneficiaries - put their trust in us

to protect both Medicare and Medicaid from unscrupulous persons looking to

steal from the taxpayer, " said Health and Human Services Secretary Tommy G.

. " By using all of the means we have available, along with more

targeted education efforts to health care providers, we can do even more to

protect these programs against both fraud and abuse. "

CMS is building on its current program integrity efforts by implementing new

steps to analyze program data to detect improper payments and potential

areas of fraud and abuse in the Medicare and Medicaid programs more quickly

and accurately. CMS is using these analyses to more effectively educate

providers and beneficiaries about

ways to prevent and minimize waste, fraud, and abuse. CMS' program

integrity efforts are being expanded beyond fee-for-service Medicare to

encompass oversight of the discount drug card program, Part D prescription

drug benefit and the new Medicare Advantage plans. CMS is also planning to

focus more efforts on its oversight of Medicaid program integrity.

" The vast majority of health care providers want to do the right thing, "

said CMS Administrator Mark B. McClellan, M.D., Ph.D. " One of the most

important ways to prevent fraud and abuse is for us to be clear about what

the Medicare and Medicaid rules are, and that means education and

collaboration with responsible providers. "

In addition to announcing its enhanced steps to analyze program data, CMS

today issued a proposed regulation calling on states to report improper

payments in Medicaid and State Children's Health Insurance Programs to HHS.

Under the proposed rule, which is open for public comment until September

27, CMS will require states to estimate these improper payments by reviewing

a monthly sample of Medicaid and SCHIP claims. This information will be

used to determine the accuracy of the payments based on whether the

individual was eligible for the program, medical review and data processing.

Once CMS receives this information from all 50 states and the District of

Columbia the national error rate will be calculated. (The proposed rule can

be found at:

http://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov

/2004/04-19603.htm

)

With the implementation of the Medicare Modernization Act (MMA), CMS has

additional responsibilities requiring increased oversight, including the

Medicare-approved drug discount card program, Medicare managed care plans,

and ultimately the prescription drug benefit.

CMS has contracted with a Program Safeguard Contractor (PSC), IntegriGuard,

to monitor the activities associated with drug cards. A critical task of

this PSC is a weekly assessment of the sponsor's drug pricing information to

identify any " bait and switch " activities.

Additionally IntegriGuard will be working with CMS to identify and prevent

potential fraudulent activities involving the discount drug card program,

such as counterfeit cards and identity theft schemes. The PSC will also

conduct a survey of weaknesses in Medicaid drug programs and how states deal

with those to help CMS prepare for potential issues and the possible

resolution of those issues that may arise in the new Medicare Prescription

drug benefit.

" Now, as we get ready to begin a new prescription drug benefit in Medicare,

it is the perfect time for us to focus our attentions on strengthening the

program safeguards, " said Dr. McClellan. " We will be able to use the

information we get to design even more appropriate safeguards we can use in

the future as we develop the prescription drug benefit. "

Program specific vulnerabilities are not the only area where CMS will be

focusing its integrity efforts. Several areas of the country have been

identified as fraud " hot spots " where unscrupulous individuals

systematically defraud the programs. To help combat the fraud in one of

these areas, Southern California, CMS will open a satellite office in the

Los Angeles area to focus Agency efforts on the large number of reported

fraud activities that have been occurring in that area.

Current CMS oversight efforts have identified many illegal storefront

operations set up to defraud the Medicare and Medicaid programs by billing

for services never provided, including an aggressive effort to curb

fraudulent billing activities at a number of home health agencies in the

Southern California area. CMS' efforts in this area have resulted in the

successful suspension of payments to many fraudulent entities, stopping

payments of more than $260 million in savings to the Medicare trust fund

between January 2003 and June 2004.

" These illegal operations and other activities conducted by unscrupulous

individuals force both federal and state governments to pay out millions of

taxpayer dollars in improper Medicare and Medicaid payments, " Dr. McClellan

said. " We have been successful in looking closely at our data to find

patterns of fraud, abuse and improper payments and will continue to do just

that, while we use even more of our resources to help reduce simple errors

through the use of education efforts. "

To augment the Agency's new data oriented approach to program integrity, it

is expanding the Medicare-Medicaid (Medi-Medi) match program where claims

data from both programs are analyzed together to detect patterns that may

not be evident when billings for either program are viewed in isolation. As

a result of combining the data, CMS can identify previously undetected

patterns, such as " time bandits, "

providers who bill for a total of more than 24 hours in a day in both

programs. CMS' goal is to ultimately review this data in " real time. "

Given its success in the first seven states (California, Florida, Illinois,

New Jersey, North Carolina, Pennsylvania and Texas), CMS is expanding the

Medi-Medi project to the states of Ohio and Washington.

Federal expenditures in these states exceed $28 billion.

CMS recently announced a pilot project to assess the effectiveness of

hospital compliance programs by tying the elements of a compliance program

to data outcomes. While other agencies in the Department of Health and

Human Services uses compliance programs, such as the Office of the Inspector

General's Corporate Integrity Agreements, there have never been any

definitive studies of whether those compliance programs have a direct impact

on the quality of healthcare billings. The CMS pilot will endeavor to show

whether particular actions by a healthcare provider, such as aggressive

auditing and monitoring, have a direct impact on their billings (resulting,

for example, in lower claim denial rates). At the end of the pilot, CMS

will issue best practices guidance detailing the findings of the pilot and

educating the provider community on effective compliance practices

identified through the pilot. CMS intends to expand this effort to other

provider types if it proves successful.

CMS has seen success through its Comprehensive Error Rate Testing

(CERT) program, resulting in an adjusted error rate of 5.8 percent in 2003,

down from 14 percent in 1996. The CERT program combines data analysis with

extensive education efforts to health care providers and the private

companies that pay Medicare claims. To build upon the CERT program, CMS is

implementing an initiative to determine the payment error rate for the

Medicaid program and the State Children's Health Insurance Program.

" This new technology based approach to program integrity will help ensure

that CMS continues to be a good steward of the Medicare and Medicaid

programs, " said Dr. McClellan.

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