The Centers for Medicare and Medicaid Services has announced "aggressive new steps" to find and prevent waste, fraud and abuse in Medicare.
In a separate announcement, CMS also has begun the initial phase of the RAC program and announced the four new contractors who will each cover approximately a quarter of the country.
The contractors are: Diversified Collection Services, Livermore, Calif., which will initially cover the states of Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont; CGI Technologies and Solutions, Fairfax, Va., which will cover Indiana, Michigan and Minnesota; Connolly Consulting Associates, Wilton, Conn., which will cover Colorado, Florida, New Mexico and South Carolina; and HealthDataInsights, Las Vegas, which will cover Arizona, Montana, North Dakota, South Dakota, Utah and Wyoming.
CMS officials said they are working more closely with beneficiaries and providers, consolidating fraud detection efforts, strengthening oversight of medical equipment suppliers and home health agencies and launching the national recovery audit contractor (RAC) program.
"Because Medicare pays for medical services and items without looking behind every claim, the potential for waste, fraud and abuse is high," said CMS Acting Administrator Kerry Weems.
CMS is also shifting its traditional approach to fighting fraud by working directly with beneficiaries to ensure they receive the durable medical equipment or home health services for which Medicare is billed and that the items or services are medically necessary.
"By enhancing our oversight efforts we can better ensure that Medicare dollars are being used to pay for equipment or services that beneficiaries actually received while protecting them and the Medicare trust fund from unscrupulous providers and suppliers," said Weems.
CMS is also consolidating its efforts with new program integrity contractors to look at billing trends and patterns across Medicare. CMS officials will focus on companies and individuals whose billings for Medicare services are higher than the majority of providers and suppliers in the community.
CMS will also be taking steps to fight fraud and abuse in home health agencies in Florida and with suppliers of durable medical equipment, prosthetics and orthotics (DME) in Florida, California, Texas, Illinois, Michigan, North Carolina and New York. Those steps include:
(bullet) Conducting more stringent reviews of new DME suppliers' applications, including background checks to ensure that a principal, owner or managing owner has not been suspended by Medicare;
(bullet) Making unannounced site visits to check that suppliers and home health agencies are actually in business;
(bullet) Implementing extensive pre- and post-payment reviews of claims;
(bullet) Validating claims submitted by physicians who order a high number of certain items or services by sending follow-up letters to these physicians;
(bullet) Verifying the relationship between physicians who order a large volume of DME supplies or home health visits and the beneficiaries for whom they ordered these services;
(bullet) And identifying and visiting high-risk beneficiaries to ensure they are appropriately receiving the items and services for which Medicare is being billed.
CMS is consolidating the work of Medicare's program safeguard contractors (PSCs) and Medicare Drug Integrity Contractors (MEDICs) with new Zone Program Integrity Contractors (ZPICs). The new contractors will eventually be responsible for ensuring the integrity of all Medicare-related claims under Parts A, B, C and D and coordination of Medicare-Medicaid data matches (Medi-Medi).
"We are continuing to build on our fraud fighting and program integrity efforts by identifying high-risk areas and trends to better focus our limited funds and resources," said Weems.
Medicare is required by law to pay claims to healthcare providers for services provided to beneficiaries within 30 days after the claim is submitted, as long as the claim meets Medicare's rules.
The RACs will be paid on a contingency fee basis on both the overpayments and underpayments they find. The three-year RAC demonstration program in California, Florida, New York, Massachusetts, South Carolina and Arizona collected more than $900 million in overpayments and nearly $38 million in underpayments returned to healthcare providers.