Reviewing the year in healthcare fraud
Medicare Part D still vulnerable
Despite the impressive fraud recovery dollars, a few areas remained in the spotlight throughout 2014. One was Medicare Part D, which has been a longstanding fraud hotspot (.pdf). In March, the Office of Inspector General (OIG) offered a friendly reminder to CMS that it's still not very good at uncovering Part D fraud--probably because CMS does not require fraud and abuse reporting but, instead, encourages Part D sponsors to report potential fraud. As a result, just 54 percent of sponsors didn't report at all. A couple months later, CMS released new rules to screen drug prescribers, release more Part D data, and collect information directly entities that contract with sponsors.
Of course, this didn't stem the tide of Part D problems that trickled in throughout the year. In August, the OIG noted that Part D spent $32 million on HIV drugs for people who may not have needed them; more than one-third of them hailed from Miami or New York. A month later, OIG singled out pharmaceutical companies for not doing enough to stop coupons from being used for Part D drugs; this practice can put them on the hook for violating anti-kickback statutes.
Finally, fraud involving controlled substances continued throughout the year as forged prescription schemes and unlawful distribution of narcotics such as Oxycodone made headlines. Fraud schemes continued to flourish under the Part D program, with narcotic painkiller prescriptions for Medicare patients spiking nine percent and 12 of the top 20 prescribers in the program showing signs of a troublesome past.
Home is where the fraud is
If there was any doubt that home health was a problem area for fraud, a slew of stories from 2014 wiped it out. FierceHealthPayer: AntiFraud's exclusive interview with Haynes and Boone's Sean McKenna revealed that home healthcare was on the law enforcement and payer radar, and throughout the year that proved true.
In June, the Center for Public Integrity published a report looking at the potential for fraud in house calls, and a subsequent investigation found that Medicare spending for home-visit services skyrocketed. Meanwhile, Michigan's Medicaid Home Help Program was found to have overpaid $160 million in 29 months as a result of sloppy paperwork and improper monitoring.
The month of December offered no shortage of home health fraud cases throughout the country, leaving the distinct impression that this problem will likely trickle into 2015 and beyond.
Data analytics is the future--unless you're in Texas
Fraud experts repeatedly pointed towards data analytics and informatics as the wave of the future for fraud prevention, offering an opportunity to move past the antiquated "pay-and-chase" model into an age where payment data would provide preemptive fraud detection. In an effort to support that vision, in November CMS announced that it would create an office of enterprise data and analytics that would let the government use predictive analytics to identify fraud and abuse. Meanwhile, states such as Indiana and North Carolina used data analytics to thwart fraud, saving $85 million and $33 million, respectively.
Of course, it wasn't all good news, as Texas offered up its nomination as the "Goat of the Year" when an investigation revealed Texas botched a $110 million contract with a software company that was hired to detect fraud. The months-long disaster eventually cost two Texas Health and Human Services Commission administrators their jobs.
There you have it: The good, the bad, and the ugly of healthcare fraud in 2014. But don't wipe the slate completely clean; many of the fraud trends seen over the past year are likely to carry over into 2015.
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