Medicare Fraud

With annual expenditures well in excess of $300 billion, the Medicare and Medicaid programs have presented a substantial target to those individuals and/or businesses seeking to enrich themselves at the taxpayer's expense (Kopf, 1998). Beginning in the fall of 1994, the Secretary of Health and Human Services (HHS) requested that the U.S. Inspector General would develop a new approach enlisting the resources of the various HHS components to identify and ameliorate fraud and abuse in these two public health insurance programs. It was then decided to implement a coordinated effort involving the Office of Inspector General (OIG), the Health Care Financing Administration (HCFA), and the Administration on Aging (AoA).

The purpose of the initiative which began in March 1995 and which was known as Operation Restore Trust (ORT) was identified by James A. Kopf (1998), director of Criminal Investigations for OIG as:

1. To coordinate all available resources in an

effort to make a significant impact on health

2. To reach out and educate the public on the

growing health care fraud schemes and issues.

3. To demonstrate that a combined effort would

be the most cost efficient method of attacking

this problem with results yielding a significant

As William J. Scanlon (1999) of the U.S. General Accounting Office (GAO) recently reported, improper bi

. . .
merican Medical Association (AMA) and other providers have opposed the expansion of Medicare peer review organizations to detect health care fraud. Specifically, according to Gardner (1999), the AMA wants HCFA to eliminate a payment error prevention program from its proposed contracts with professional review organizations (PROs). The PROs consist of 37 private contractors hired by HCFA to analyze the quality of care provided to Medicare beneficiaries. Under the proposal, these agencies would also be required to search hospital billing data and patient records for incorrect billing resulting from poor documentation, incorrect diagnostic related group (DRG) assignment, inappropriate transfers, and medically unnecessary care. In return for reducing payment errors, the PROs would receive financial rewards. The objection of the AMA centers upon the perception that the primary thrust of the PROs has been transferred to protecting the fiscal integrity of the Medicare trust fund from its earlier focus on improving the quality of care provided to Medicare beneficiaries. Gardner (1999) reported that HCFA considers this new mission consistent with the overall responsibilities of PROs. The payment error prevention program is viewed
. . .

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Approximate Pages = 17 (250 words per page)

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