Solutions for controlling healthcare fraud and abuse

Now that sequestration is in effect, healthcare leaders are eager to see exactly how these cuts will take shape and the impact they will have. While the sequester remains politically unpopular with both parties, cuts to programs geared toward saving Medicare funds such as HHS’s Health Care Fraud and Abuse Control program, seem to make even less sense than others.

While no one wants to see such fraud-fighting programs minimized, alternative anti-fraud approaches have surfaced that would add no additional cost to the federal budget. In fact, viable solutions exist that can generate savings without requiring additional HHS or law enforcement resources.

In its annual report published last month, the Office of the Inspector General (OIG) announced record-breaking successes in prosecuting fraudulent healthcare providers and recovering public monies lost to theft, fraud and abuse. Fiscal year 2012 proved to be the most profitable year for the 16-year-old initiative, netting approximately $4.2 billion in recovered healthcare dollars.

These accomplishments are highly laudable, but we must do more. The funds recovered last year still likely represent only a drop in the bucket of money that could be saved if lawmakers were to implement comprehensive program integrity reform — reform that would stop the slow drain of lost dollars on the front end.

Independent research conducted by the home healthcare community, and corroborated by data from MedPAC, clearly demonstrate that waste, fraud and abuse are isolated and generally very easy to recognize. For example, analyses of 2011 Medicare claims data show that nearly 90 percent of all aberrant spending occurred in just a handful of counties in a few select states. In those locales, evidence is impossible to ignore.

Despite these obvious aberrances, for years the accepted policy has been to “pay and chase.” Fraudulent providers have been routinely reimbursed for their assumed services, while government — sometimes years down the road — spends even more money to investigate, prosecute and attempt to recover precious, squandered healthcare dollars intended for the nation’s elderly.

As policymakers and providers anxiously await the impacts of the sequester next month, and as some in government are recommending policies that cut Medicare payments even more or shift the burden onto vulnerable seniors, the time is now to find a better way.

Many lawmakers, providers and patient advocates have recognized that the best way to approach fraud and abuse is to stop it before it can start. One such safeguard has already proven effective. In 2009, the home health community proposed a 10 percent cap on Medicare outlier claims to stem what was considered an example of unchecked fraud and abuse. Adopted by the Centers for Medicare and Medicaid Services (CMS) and included in the Affordable Care Act (ACA), this single reform achieved a 70 percent reduction in outlier costs — from $1.2 billion in 2009 to $350 million in 2010 — and is on track to generate a total of $11 billion in taxpayer savings over the next decade.

The Partnership for Quality Home Healthcare, in coordination with other home healthcare leaders, has developed a package of program integrity reforms. Among the cost-saving measures in the “Skilled Home Healthcare Integrity and Program Savings (SHHIPS)” proposal are payment safeguards, episode caps, mandatory criminal background checks, compliance and ethics programs, and temporary entry limitations to prevent excess growth in over-saturated markets. These simple yet effective mechanisms would go far to ensure only honest and reputable providers have the privilege to participate in the programs keeping our seniors healthy.

As the president prepares his 2014 budget proposal, he has an opportunity to build upon the trajectory HHS and law enforcement agencies have established, and propose even greater efforts to save federal dollars by ending Medicare fraud and abuse. We hope he will see the value in program integrity reforms and propose reforms, like SHHIPS, that are proven to successfully generate budget savings.

Instead of focusing anti-fraud efforts on costly and backward-looking initiatives, home health leaders are proactively leading the way with proven program integrity reforms to curtail fraud, eliminate bad actors, and provide savings to taxpayers. It is our hope that leaders in Washington will embrace a better solution — one that will end the “pay and chase” game for good.

Tauzin is former chairman of the House Energy & Commerce Committee and senior counsel to the Partnership for Quality Home Healthcare.