Last week's report from the Government Accountability Office made waves after the agency characterized enrollment fraud detection within the federal Affordable Care Act marketplace as "passive," a word that many latched on to as way of denouncing the president's landmark healthcare legislation. Although the GAO pointed out some valid criticisms of ACA fraud detection, this submissive approach to fraud prevention seems to reflect a widespread systemic issue among government-run programs dating back to the inception of Medicare and Medicaid.
Medicaid Fraud Control Units were notably inefficient in 2015, recovering just $744 million of an estimated $53.6 billion in improper payments. These numbers are particularly concerning given the increase in Medicaid enrollment, the projected spending within the program over the next six years and the fact that improper payment rates continue to push skyward. Is this a one-year anomaly, or is an unmanageable Medicaid budget outpacing our existing tools for controlling fraud?
Cees Klumpler, chief risk officer for the Global Fund to Fight AIDS, Tuberculosis and Malaria, is responsible for $4 billion in annual funding that is distributed to 130 different countries. Following years of fraud and abuse that plagued the organization, Klumper has developed a unique 2-for-1 approach to recovering fraudulent payments. It's a methodology that the healthcare industry could benefit from.
Genetic testing brings with it a tremendous amount of hype, along with the influential support of the president. Following Barack Obama's $215 million Precision Medicine Initiative last year, payers have been cautious about covering genetic tests. However, a recent announcement by Independence Blue Cross just raised the bar. As more payers consider when and how to cover genetic tests that could offer a personalized approach to medical care, they should also consider the significant fraud concerns that go along with new, expensive tests.
James Slattery, CEO of Millennium Laboratories, who was once awarded a regional entrepreneur of the year award from Ernst & Young, prided himself on his fast-growing company's culture. But behind the scenes, court documents show that company attorneys warned employees not to be "weasels," and company executives pushed an agenda that ultimately led to a $256 million fraud settlement with the federal government. Through a series of financial tricks, however, Slattery stands to walk away with his pockets lined.
It was only a matter of time before a rehab provider was nailed, in a big way, for providing unnecessary therapy to SNF patients. With RehabCare's $125 million settlement earlier this month, we saw federal prosecutors lay blame on a provider that operated within an inherently flawed payment system that incentivized ultrahigh therapy. Until that model changes, expect these settlements to continue, and for providers to take the blame for a payment model that offered virtually no structure or oversight.
Last year was a terrible, horrible, no good, very bad year for PharMerica Corp., the second largest pharmacy operator in the country that ended up spending $43.25 million to resolve multiple False Claims Act allegations from the federal government. In the span of 12 months, the company negotiated multi-million dollar settlements and entered into another corporate integrity agreement for accepting kickbacks and illegally dispensing drugs.
Amid a nationwide discussion about gun control, some in Texas are wondering why a group of white-collar crime investigators with the Attorney General's Office are armed to the teeth with hollow-point bullets and assault rifles. Although healthcare fraud has been infiltrated by more sinister gangs and criminal enterprises, the money and time spent arming 160 officers in Texas would be better spent on proven fraud enforcement efforts.
Predictions are usually an exercise in futility, but they're also fun. The New Year offers an opportunity to look back at a year's worth of fraud stories and pick out some of the major themes, and how those might impact fraud enforcement and prevention efforts in 2016. So, here are my seven predictions for healthcare fraud in the coming year.
Daniel Suarez, 24, will spend the rest of his twenties and early thirties in prison for stealing $21 million from Medicare Part D as part of pharmaceutical fraud scheme that began when he had barely turned 18. Suarez spent his money on luxury cars, while attempting to launder the stolen funds through FedEx trucks. His youthful exuberance conjures up comparisons the Martin Shkreli, now facing securities fraud charges after drawing in his own brand of attention.