Senators demand more effective Medicare fraud prevention

The senators were reacting to a report from the Department of Health and Human Services Office of Inspector General (OIG) that raised concerns about two parts of Medicare — Part C and Part D.

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The report looked into the oversight contractor responsible for preventing waste and fraud in both Medicare Advantage and the Medicare prescription drug program. It found that oversight work by the Medicare Drug Integrity Contractor (MEDIC) has seen little success in its efforts to identify waste and fraud. 

“Unfortunately, this report by the inspector general shows that we haven’t made enough progress in safeguarding Medicare by detecting and preventing waste, fraud and abuse,” Carper said. “This lack of progress is deeply disappointing, but not necessarily surprising given that the oversight contractors charged with detecting fraud — and paid a pretty penny by the taxpayers to find it, I might add — lack access to basic data from the program. The bottom line is that we must have stronger measures in place to identify and prevent this abuse of a healthcare program vital to our nation’s seniors.”

The OIG report found that 223 investigations by MEDIC into waste and fraud in the Medicare prescription drug program resulted in referrals to law enforcement. But lawmakers complained that most of those investigations were started based on tips from the fraud hotline, rather than “proactive” methods such as research and analysis, which is supposed to be done by MEDIC. MEDIC has an annual budget of $14 million, but only 21 referrals to law enforcement were discovered through proactive means.

“Every dollar wasted through Medicare fraud moves the program another step toward bankruptcy,” Coburn said. “Despite spending more than $24 million over a two-year period, [Centers for Medicare and Medicaid Services’ (CMS)] contractor only discovered through their own initiative 21 cases of fraud that they referred to law enforcement. All of the other cases came in passively from complaints.”

The report said that the CMS has not set up a database that would help MEDIC identify potential fraud. It recommended that CMS clarify its policies for MEDIC, improve access to data and enhance monthly workload reporting requirements to improve CMS oversight of the MEDIC's activities.

“This report shows how poorly the federal government is at safeguarding taxpayer dollars,” Hatch said. “It is simply unacceptable that CMS does not have the tools in place to effectively weed out waste, fraud and abuse within Medicare — a program whose fiscal future is already at risk. Implementing the inspector general’s recommendations would be a strong step forward to better protect the American people’s money and shore up the Medicare program.”

Lawmakers are expected to address entitlement reform later this year. Republicans want to make cuts to the programs as part of a deal to raise the debt ceiling and lower spending. Medicare reforms will likely be part of the conversation.