$1 billion spent to fight Medicare fraud in 2010

Washington -- The Medicare program spent $1 billion fighting fraud and ensuring the accuracy of payments for health care services in 2010, according to a new government study.

The Centers for Medicare & Medicaid Services has expanded its anti-fraud efforts after receiving increased funding from Congress and reallocating money saved from Medicare contractor consolidations since 2006, according to a Government Accountability Office report released Aug. 29. Operations include more oversight of Medicare private insurers and drug plans, and benefit integrity activities.

The health system reform law also provided CMS with an additional $350 million for fraud and abuse control efforts, the GAO said.

"Curbing waste and fraud, including the tens of billions of dollars in Medicare improper payments, is a big job, and we need the right tools in place to make progress," Sen. Tom Carper (D, Del.) said in a statement on the GAO report. "Moreover, government must embrace a culture of thrift where we look into every nook and cranny for savings without sacrificing results."

Sen. John McCain (R, Ariz.) agreed that CMS is headed in the right direction, but he also noted that an unacceptable amount of money still is lost to fraud on an annual basis. The Medicare program spends about $500 billion a year, a figure that included an estimated $48 billion in improper payments in 2010.

Physicians soon will experience the effects of enhanced program integrity efforts. The Medicare agency will require nearly all doctors in the Medicare program to revalidate their Medicare enrollment information by March 2013. CMS says it will deactivate billing privileges for those physicians who fail to re-enroll in the program.

"Medicare fraud threatens patients, physicians and the entire health system," said American Medical Association President Peter W. Carmel, MD. "The AMA supports efforts to identify truly fraudulent activities in Medicare without adding additional administrative burdens to the vast majority of honest physicians who care for Medicare patients."

The GAO was unable to gauge the full effectiveness of anti-fraud activities in the Medicare program because the data used to calculate a return on investment are flawed, the report found. The watchdog agency recommended that CMS take steps to enhance the reliability of the data to show that the investment in program integrity is paying off.

The GAO report is available online (link).