1 1
Medicare Fraud &
ID Theft Prevention
2013 SMP National Training Meeting Washington, D.C.
August 5, 2013
Margaret “Peggy” Sparr, Director Program Integrity Enforcement Group (PIEG)
Center for Program Integrity, CMS
410-786-8897
Margaret.Sparr1@cms.hhs.gov
Medicare Parts A, B, C & D
Part A– Hospital Insurance Trust Fund:
inpatient hospital, skilled nursing facility (SNF) & some home health & hospice svcs Part B– Supplementary Medical Insurance (SMI)
Trust Fund: outpatient hospital; lab; IDTF &
diagnostic tests; ambulance services;
physician services; PT/OT/ST; Durable
Medical Equipment (DME); CMHC; CORF/ORF Part C– Medicare Advantage Program (Managed
Care Organizations)
Part D– Medicare Prescription Drug Coverage
3
Medicare Expenditures
Per 2012 CMS Office of Actuary report:
Since FY 2006, Medicare expenditures rose from $408 billion for 43.2 million beneficiaries to
$550 billionfor 50.2 million beneficiaries in FY 2012 Every 8 seconds, someone becomes Medicare
eligible, so expenditures will continue to rise.
Medicare Fraud Examples
• Kickbacks
• Physician Fraud
• Home Health Care Fraud
• Ambulance Rides
• Power Mobility Device Scams
• Arthritis Kit Scams
• Free Tests and Screenings
• Diabetic Supplies
5
Beneficiary Fraud
“Professional” patients “rent” use of Medicare ID # (“no show” patient)
Solicit kickbacks to participate in fraud
receive unnecessary service (surgery/tests) accept free transport, sign logs for services not received
Obtain physician orders for unnecessary diagnostic tests, drugs, treatments
Re-sell drugs back to pharmacy after dispensing
Recruit friends for “finder’s fee”
Beneficiary Fraud – ACA Sec 6402(a)
Administrative Remedy for Knowing Participation by Beneficiary in Health Care Fraud Scheme
Effective upon enactment, this provision
requires Secretary to impose an administrative penalty on a Medicare, Medicaid, or CHIP- eligible individual, commensurate with the offense or conspiracy, for knowing
participation by individual in a Federal health care fraud offense or conspiracy to commit such an offense.
This is in addition to any existing remedies available to Secretary.
7 7
Medical Identity Theft
Medical identity theft is the misuse of another individual’s personal information to obtain or bill for medical goods or services.
Such theft creates both patient safety risks and financial burdens for those affected. Use of compromised numbers can lead to erroneous entries in beneficiaries’ medical histories and even the wrong medical treatment.
Medical identity theft not only harms beneficiaries and providers, it causes significant financial losses for the Medicare Trust Funds and taxpayers.
“Guard Your Card”*
Recent Complaint Feedback
66% of unsolicited phone calls were for diabetic supplies
26% were for orthotics & other supplies
8% were for unspecified types of medical supplies or equipment
61% of companies reportedly offered items for free or no charge
13% of companies told beneficiaries they were calling on behalf of Medicare or SSA
39% of beneficiaries provided their Medicare numbers to callers before calling 1-800-MEDICARE
5% of beneficiaries stated the supplier already had their Medicare number
May 14, 2013
Medicare Fraud strike force charges 89 individuals for approximately $223 million in false billing
8 of 9 Strike Force cities involved
89 individuals, including doctors, nurses and other licensed medical professionals Miami, Baton Rouge, Houston, LA, Detroit, Tampa, Chicago, Brooklyn Kickbacks, False billing, unqualified personnel
DME, Home health, Mental Health, Physical Therapy, psychotherapy, infusion therapy.
9
New York (Part B and DME) by Zip Code
11 11
National Medicare ID Theft Case
Arrests
October 13, 2010: OIG & FBI arrested 73 individuals in 5
states directly linked to 2,500stolen NY Medicare HICNs
DOJindicted 73 in NY (44), CA (10),OH (6), GA (6)& NM (7)in the largest Medicare fraud scheme ever perpetrated by single criminal enterprise
Organized crime enterprise throughout US & Armenia perpetrated large-scale, nationwide Medicare scam
$163 Min fraudulent Medicare billing for unnecessary medical treatment in 118false front clinics in 25states
May 20, 2011: Rafik Terdjanian pled guilty to 1 count conspiracy to commit bank fraud in SDNY
Rafik assisted son Robert with managing bank accounts for $35 MMedicare fraud scheme (2006-2010)
How Numbers Become Compromised
At the current time (July 1, 2013), CMS is aware of about
1,807 compromised Medicare provider numbers,
555 compromised Medicare Part D provider numbers and
13 13
Map of Compromised Beneficiary Numbers PSC / ZPIC / PDAC (Part B and DME)
Map of Compromised Beneficiary Numbers MEDIC (Part C and D)
15 15
Florida (Hialeah/Miami area) by Zip Code PSC/ZPIC/PDAC (Part B and DME) Beneficiaries
Florida (Hialeah/Miami area) by Zip Code
MEDIC (Part C and D) Beneficiaries
17 17
Zip Code Distribution of PSC/ZPIC/PDAC (Part B and DME) Beneficiaries from Puerto Rico
California ( Los Angeles Area) (Part B and DME) by Zip Code
19 19
Texas ( Houston Area) (Part B and DME) by Zip Code
New Mexico (Part B and DME) by Zip Code
21 21
Actions CMS Take
After a Medicare contractor verifies that a provider or beneficiary number is compromised, the number maybe placed on
prepayment edit.
• When claims are submitted using that number, they may be subject to medical review or automatically denied.
• When CMS contractors provide reliable evidence of fraud, overpayment or willful misrepresentation associated with a provider number, with CMS approval, the contractor can impose a suspension of payment for future claims.
• Medicare contractors develop cases, open investigations, and make referrals to Law Enforcement for prosecution.
Anti-Fraud Results To Date
$4.9 billion recovered in settlements and judgments in civil cases involving fraud against the government in the fiscal year in FY ending Sept. 30, 2012
$13.3 billion total recoveries under the False Claims Act since January 2009 - which is the largest four-year total in the Justice Department’s history and more than a third of total recoveries since the act was amended 26 years ago in 1986..
Strike Force operations in nine locations have charged more than 1,500 defendants who
collectively have falsely billed the Medicare program for more than $5 billion.
23 23
Anti-Fraud Results To Date
$4.9 billion recovered in settlements and judgments in civil cases involving fraud against the government in the fiscal year in FY ending Sept. 30, 2012
$13.3 billion total recoveries under the False Claims Act since January 2009 to– which is the largest four-year total in the Justice Department’s history and more than a third of total recoveries since the act was amended 26 years ago in 1986..
Strike Force operations in nine locations have charged more than 1,500 defendants who
collectively have falsely billed the Medicare program for more than $5 billion.
Anti-Fraud Results To Date
Qui tam-provisions, which allow private citizens to file suits alleging false claims on behalf of the government.
If the United States prevails in the action, the whistleblower, known as a relator, receives up to 30 percent of the recovery.
DOJ saw a record 647 qui tam suitsfiled last fiscal year and recovered a record $3.3 billion in suits filed by whistleblowers during the same period.
DOJ’s 2012 efforts also included record recoveries for health care fraud, where recoveries topped $3 billion for the first time in a single fiscal year, thereby besting the
25
As a Medicare beneficiary, caregiver, SMP volunteer or community representative, protect yourself and/or other beneficiaries by:
-knowing and sharing all anti-fraud resources available to give to yourself, beneficiaries and their families.
Go to www.stopmedicarefraud.gov for materials - Be aware of current fraud schemes to watch out for
scams like questionable DME suppliers, non- emergency ambulance companies or home health agencies offering “free” services in exchange for your Medicare number.
- Know your SMP and Administration for Community Living (ACL) contacts.
What can YOU do?
• 1-800 Medicare
• OIG Hotline: 1-800-HHS-TIPs
• Medicare Ombudsman
• CMS’ periodic communications on the MSN or the occasional inserts
• SMP volunteers
• To find an SMP in your area,:1-877-808-2468
• FTC ID Theft Hotline: 1-877-438-4338 (1-877- ID- THEFT)
Much of this information is on the Medicare.gov website.
Ways to Report Fraud
27
www.Stop Medicare Fraud.gov
Contact Information
Email: Margaret.Sparr1@cms.hhs.gov Telephone: (410) 786-8897
USEFUL WEBSITES:
www.cms.hhs.gov/medlearn
Notices, alerts, bulletins, on-line education www.stopmedicarefraud.gov
Strike Force & HEAT & prosecution info, press releases, indictments -- by state
