Skip to content

W&M Oversight: CMS Must Do More to Address Waste, Fraud, Abuse in Medicare

July 19, 2017

Today, the Ways and Means Oversight Subcommittee, chaired by Rep. Vern Buchanan (R-FL), held a hearing to examine how the Centers for Medicare and Medicaid Services (CMS) addresses waste, fraud, and abuse in the fee-for-service Medicare program, the managed care Medicare Advantage program, and the prescription drug Medicare Part D program. The hearing comes just days after the Department of Justice and the Department of Health and Human Services announced the largest ever health care fraud takedown, charging more than 400 people – many of them doctors, nurses, and other medical professionals – who claimed more than $1.3 billion in fraudulent billings.

This is too common in a program as big and as broad as Medicare. According to CMS, in 2015 $59.6 billion – about 10 percent of all Medicare spending – was spent on improper payments, rather than on improving the health of Medicare beneficiaries.

As Chairman Buchanan said at the start of the hearing:

“Nearly 60 million Americans, including four million in my home state of Florida, rely on the Medicare program to provide care. We have a responsibility to all of them, and to all taxpayers, to ensure that care is high quality, and that CMS is paying accurate and appropriate amounts to those providing the care. As it stands now, Centers for Medicare Services has not been in a position to ensure that this is the case.”  

Members expressed their concerns with the level of improper payments – specifically focusing on fraud schemes that for too long have gone undetected.

As Rep. Pat Meehan (R-PA) said:

We are seeing not only a growth in concern about fraud, but the opioid epidemic – both on the front end, with over-prescription, but a growing concern about those who have entered into the treatment space … a recent subcommittee report from the Permanent Subcommittee on Investigations in the Senate found that only a small percentage of potential incidents of fraud and abuse in the Part D program were brought to the attention of [investigators] … [in 2015], there were 8,900 total actionable complaints, yet only about 7 percent were investigated.”

Rep. Jackie Walorski (R-IN) highlighted one egregious example of fraud in Indiana that CMS failed to detect and address. She said:

“A prescriber in my home state of Indiana wrote an average of 24 opioid prescriptions each for 108 beneficiaries in a year, costing Medicare Part D $1.1 million … the filters [CMS uses to identify fraud] aren’t working. Whatever was done prior to January 2017 is not working … My Hoosier doc here … is writing an average of 24 prescriptions each for a 108 people in a year and it wasn’t flagged.”

Rep. Carlos Curbelo (R-FL) added:

This issue is of critical importance to South Florida … I’ll just read the first line of a Miami Herald article published recently: ‘With federal agents leading Medicare fraud busts nationwide and in the nation’s Medicare fraud capital of Miami last week, a drug-dealing Miami doctor pleaded guilty to conspiracy to commit healthcare fraud.’ 4.8 million dollars. Now people in my community are sick and tired of having this reputation. And people in my community ask me how come Visa and American Express and MasterCard can prevent fraud, yet we’re always reading about the Medicare fraud that is being chased in the newspaper.”

One of the biggest challenges CMS faces, as Jonathan Morse – acting director of the Center for Program Integrity at CMS – explained, is understanding the cause behind each improper payment. For example, some improper payments are the result of fraud – that is, intentionally deceiving the federal government to obtain an unauthorized benefit – whereas others are the result of a clerical or technical error, such as a typo or a missing document. But CMS lacks the processes to decipher between the two – making it more difficult to find solutions.

As Chairman Buchanan reinforced at the end of the hearing:

“There is a saying that if you can’t measure it, you can’t manage it. And we need to make sure we have good, accurate information … in terms of trend lines and where all of this is going … it doesn’t take a big percentage to get to a gigantic number.”

Urging CMS to improve its strategies for stopping fraud in its tracks, Rep. Curbelo said:

“Whatever it takes, I think this Committee, this Congress needs to empower these agencies to remedy this situation for taxpayers, for Medicare beneficiaries. It’s very demoralizing to read on a weekly basis in Miami these articles about people running these schemes that have cost the taxpayers billions and billions of dollars and by the way threaten the solvency of Medicare … we need to do much better.”

CLICK HERE to learn more about today’s hearing.