Dead doctors' IDs used to bilk Medicare

Washington -- Some physicians worry that their professional identities will be stolen and Medicare fraud perpetrated in their names for as long as they live. A new report shows that this possibility doesn't necessarily end after a doctor has died.

Medicare paid at least $60 million and as much as $92 million since 2000 for fraudulent durable medical equipment claims that were filed using deceased physicians' identification numbers, a Senate investigation found. Of these nearly half-million claims, an estimated 16% were from doctors who had died 10 or more years before the service date listed.

Although the amount is relatively small compared to the total amount of fraud that occurs in the Medicare program, lawmakers jumped on the results because of the relative ease with which they said the administration should be able to prevent it. The Centers for Medicare & Medicaid Services recently has been struggling to combat ballooning fraud in the durable medical equipment arena.

"The failure to stop payment of deceased physician claims is inexcusable, since dates of deaths are so readily available," said Sen. Carl Levin (D, Mich.) chair of the Senate Committee on Homeland Security and Governmental Affairs permanent investigations subcommittee. Staffers on his panel conducted the research for the report, presented at a July 9 hearing.

This was not the first time that investigators found Medicare fraud involving dead doctors' identities. The Dept. of Health and Human Services Office of Inspector General released a report in November 2001 finding that Medicare paid more than $90 million in 1999 for medical equipment that was billed using invalid or inactive unique physician identification numbers. These included UPINs for deceased physicians.

At the time, CMS said it would implement new procedures to ensure that this never happened again. After ordering the contractors that handle physician ID numbers to conduct a one-time cleanup to remove dead physicians' UPINs, the agency instructed them to update their identification registries every 15 months to account for new deaths. But the Senate report charged that the contractors are not doing their job well enough, and invalid IDs are still slipping through the cracks.

In testimony before the subcommittee, CMS Deputy Administrator Herb B. Kuhn said the agency would look into ways to improve its process of deactivating old ID numbers.

The agency's anti-fraud abilities are expected to become much stronger with the switch to the national provider identifier system, Kuhn said. All physicians and suppliers were required to move to the NPI in May, so any UPINs that had been used fraudulently no longer can be used to file claims.

Next year CMS will allow only individual practitioners enrolled in Medicare to order and refer patients for medical equipment -- a move that is expected to reduce fraud opportunities even more. Currently a group ID or any other NPI can be used to order or refer equipment.

Also, the Social Security Administration has agreed to provide Medicare with monthly updates of deaths. CMS will match this information with the NPI system and deactivate the IDs and enrollment information for physicians who have died.

What physicians and CMS can do

Physicians and other members of a practice can do their part to ensure that the identity of their partner or boss will not be used to commit Medicare fraud after he or she dies.

When a physician dies, the practice should immediately notify its Medicare contractor, said CMS spokesman Peter Ashkenaz.

Still, the dead physician ID problem at its heart is a CMS problem, and the agency is falling far short of tackling it, said Malcolm K. Sparrow, PhD. He's a professor of public management at the Harvard Kennedy School of Government and an expert on government fraud control.

One major problem is that so much Medicare fraud goes unchallenged, he said. Even when it is, the focus is more on simply preventing the payment from going forward than on prosecuting the offender.

In cases where a dead physician's ID number has been used, the government should use the opportunity to investigate all of that supplier's claims to see how many other types of wrongdoing he or she is committing, Sparrow said. Instead, these offenders simply receive informational edits back with their rejected claims, allowing them to cross off the invalidated ID numbers from the lists that they may have bought on the black market.

"It's no surprise that we've seen claims using dead patients, prisoners, deportees, and now, dead doctors," Sparrow said. "Medicare is a fat, sleeping, happy target, and the target needs to bite back."

CMS' Kuhn noted that Medicare, with the help of other federal investigators, recently shut out all Medicare claims from hundreds of fraudulent suppliers in the Miami and Los Angeles areas. But, he added, the agency has much more work to do.