Medicare, Medicaid Exclude 200% More Docs for Healthcare Fraud

December 18, 2018 - Efforts to combat healthcare fraud, waste, abuse by Medicare, Medicaid, and public insurance programs may be paying off, according to a new study from the University of Southern California and Harvard Medical School.

The study recently published in JAMA Network Open revealed that the number of physicians excluded from Medicare, Medicaid, and other public healthcare programs increased by about 200 percent from 2007 to 2017. The physicians had to exit the programs because of healthcare fraud schemes, health crimes, or unlawful prescribing of controlled substances.

The trio of researchers also found that excluded physicians during the ten-year period were more likely to be male, older, not have a faculty appointment at a US medical school, and have graduated from osteopathic medical school or were an international medical graduate.

Additionally, Medicare and state public insurance programs excluded more practicing family medicine physicians, psychiatrists, internal medicine providers, anesthesiologists, surgeons, and OBGYNs during the period.

Researchers from the University of Southern California and Harvard Medical School hope their findings can support and bolster healthcare fraud, waste, and abuse prevention efforts.

“Our results highlight the potential value of using physician characteristics, in conjunction with information on medical claims filed by physicians, to help identify adverse physician behavior,” they wrote in the study. “In their predictive models, Centers for Medicare & Medicaid Services already uses fee-for-service claims data to identify clinician behaviors that warrant administrative actions. However, some of these models have high false-positive rates and have led regulators to invest significant time and resources into investigations of physicians who are not engaged in untoward activities.”

“Therefore, improving the sensitivity and specificity of these predictive models could increase the efficiency with which regulators allocate limited investigation and enforcement resources,” they stressed.

Healthcare fraud, waste, and abuse is a multibillion-dollar problem for Medicare, Medicaid, and other public healthcare programs.

According to the latest date from the Institute of Medicine, healthcare fraud, waste, and abuse cost $750 billion, or 28 percent of total healthcare spending in 2009. And fraud alone represented about $75 billion of that wasteful spending.

The FBI also estimated fraudulent medical billing cost the industry up to $260 billion in 2010, or 10 percent of total healthcare spending.

Healthcare fraud, waste, and abuse continues to be a major problem for Medicare, Medicaid, and other public healthcare programs. In 2017 alone, federal healthcare fraud investigations and convictions returned about $2.6 billion in taxpayer dollars to public insurance programs.

HHS OIG and the Department of Justice also charged over 600 individuals involved in healthcare fraud schemes in 2018, representing the largest healthcare fraud takedown to date.

In light of the costly problem, Medicare, Medicaid, and public healthcare programs have implemented strategies to combat and prevent healthcare fraud, waste, and abuse over the last couple of years. For example, the Affordable Care Act allocated $350 million starting in 2011 to the Health Care Fraud and Abuse Account department at HHS and boosted sanctions on providers who may have committed healthcare fraud, waste, or abuse.

Medicaid programs also received the authority to halt payments to questionable providers and recoup overpayments within 60 days, rather than three years.

The federal and state efforts to combat healthcare fraud, waste, and abuse may be working, the study suggested. The number of physicians excluded from Medicare, Medicaid, and other public healthcare programs increased on average by 20 percent per year from 2007 to 2017, researchers reported.

The number of physician exclusions may be rising due to prevention and combat efforts, they explained.

“[T]his finding could be evidence that regulators, who have been aided by recent public policies targeting the reduction of fraud and waste, may be getting better at identifying perpetrators of fraudulent activity,” the report stated.

A predictive analytics tool launched by Medicare in 2011 also helped to identify physicians engaging in illegal or questionable billing, potentially resulting in enhanced prevention. Notably, the tool saved $1.5 billion in 2016 by proactively detecting fraudulent claims and improper Medicare payments before the claims were paid to providers.

“This combination of increased funding for identifying and preventing health care fraud, harsher sanctions for potential perpetrators of fraud, and new tools for identifying fraud may have helped regulators to identify greater numbers of physicians engaging in fraudulent activity,” the report stated.

Researchers intend for their findings to enhance federal and state efforts to prevent healthcare fraud, waste, and abuse. The physician characteristic data should help predictive analytics tool to better identify physicians at risk for healthcare fraud, abuse, and waste.