Medicare Is Hit by Dead-Doctor Billing Scams
Senate Report Says
False Claims Could
Top $100 Million
By JANE ZHANG
July 9, 2008; Page A4
WASHINGTON -- The federal government paid scam artists nearly $100 million for claims of wheelchairs, canes, prescription drugs and other items submitted under the names of dead doctors in recent years, according to a Congressional investigation.
The 478,500 claims, filed under the names of 16,500 to 18,200 dead physicians, got as much as $92.8 million in payments from 2000 to 2007 from Medicare, the federal health-insurance program for the elderly and disabled. The actual number could be much more than $100 million because the probe counted only claims filed at least a year after those doctors died, according to a report by the investigations panel of the Senate Homeland Security and Governmental Affairs.
Officials from the Centers for Medicare and Medicaid Services did not dispute the findings.
Herb Kuhn, the agency's deputy administrator, said Medicare soon will start receiving the Social Security Administration's Death Master File. As of May, he said, all claims must be submitted under a new identification system, and the agency has given out two million new numbers to physicians and other providers.
The report, which was to be made public at a hearing Wednesday, continues the panel's investigations on fraud involving health-care providers. Last month, the Government Accountability Office told the panel that 27,000 Medicare doctors, hospitals, nursing homes and hospices failed to pay more than $2 billion in federal taxes in 2006.
The panel, chaired by Sen. Carl Levin (D., Mich.) and its ranking Republican, Sen. Norm Coleman of Minnesota, has focused on Medicare partly because the GAO has called the program a high-risk area for fraud, waste and abuse since 1990. Medicare's parent agency, the Department of Health and Human Services, said Medicare improperly paid out about $12.1 billion in 2005 and $21.7 billion in 2004.
The size of the Medicare program, among others, makes it vulnerable to fraud and abuses, Mr. Kuhn said in an interview. Medicare, which spent a total of $400 billion in 2007 on more than 43 million beneficiaries, processes 1.1 billion claims a year.
For Medicare, the problem of paying false claims is not new. A 2001 report by HHS's own watchdog agency, the Inspector General's office, found that Medicare paid $91 million in 1999 for medical-equipment and supply claims filed under providers no longer enrolled in Medicare. In response, Medicare required a one-time update to eliminate names of dead doctors and validate the rest, and it required its contractors to reject claims with identification numbers that were no longer valid or active.
The new Congressional report said those procedures were ineffective and some dead doctors still had active identification numbers with Medicare as of April 2008. The investigators did not say who was at fault among Medicare, HHS, or various contractors that maintain the enrollment database and process claims. But they said the federal government failed to perform reviews or audits needed.
"The fact is that, seven years after the problem was first identified, the claims-review process is still not working properly to reject claims containing the provider numbers of deceased physicians," the report said. While it welcomed Medicare's move to use new identification numbers, the report said the agency needs to double-check the database "on a timely and effective basis."
Mr. Kuhn said fraud persists "despite our best efforts," and the agency needs all the help it can get from law enforcement, Congress and other agencies. Medicare, he said, is proposing to require a surety bond for medical-equipment bidders and require suppliers to maintain documents, such as physician referrals, for seven years.
Sen. Coleman said in a statement that it is "upsetting" that people "exploit the death of honorable physicians to help in their scheme to defraud Medicare." He added, "This is simply unacceptable -- making sure that the prescribing doctor is alive before paying a claim should be a no-brainer. It's time to close this $100 million loophole."
"The slipshod procedures that let these claims get through are an insult to U.S. taxpayers, Sen. Levin said. "It is long overdue to shut the door on this multimillion-dollar abuse."
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