Preventing Medicare Fraud Improves Patient Outcomes, Study Shows

November 18, 2019 - Medicare fraud not only wastes billions of taxpayer dollars annually, but it also carries a significant human cost, according to a study from researchers at Johns Hopkins Bloomberg School of Public Health.

The study published in JAMA Internal Medicine on October 28 found that patients treated by a healthcare provider who was later excluded from the Medicare program for committing fraud and abuse were between 14 and 17 percent more likely to die compared to similar patients treated by non-excluded providers.

Researchers estimated that Medicare fraud and abuse perpetrators contributed to about 6,700 premature deaths in 2013 alone.

“We found that even a single visit with a provider later excluded for fraud and abuse increased  the risk of dying compared to someone who lived in the same county and had the same health status but did not see an excluded provider,” lead author Lauren Hersch Nicholas, PhD, assistant professor in the Bloomberg School’s Department of Health Policy and Management, stated in a press release. “While fraud has traditionally been viewed as a financial concern, our study shows that it also represents a major public health threat to patients.”

For their study, Nicholas and three other researchers from Johns Hopkins University examined HHS’ Office of the Inspector General’s list of providers banned from Medicare for fraud and abuse between 2012 and 2018. They linked the list of excluded providers to a random sample of Medicare beneficiaries treated by those providers.

READ MORE: How Providers Can Detect, Prevent Healthcare Fraud and Abuse

The study covered over 8,200 Medicare beneficiaries who were first treated by providers who were excluded for Medicare fraud and abuse in 2013, as well as a comparison group of nearly 297,000 Medicare beneficiaries treated by randomly selected providers who had not been excluded for fraud and abuse.

The two groups were in similar health prior to Medicare fraud and abuse exposure, researchers pointed out. However, patient outcomes differed up to three years after.

Not only did researchers observe a difference in mortality, but they also reported increased hospitalizations among beneficiaries treated by providers who committed Medicare fraud and abuse.

Patients treated by Medicare fraud and abuse perpetrators were also 11 to 30 percent more likely to have an emergency hospitalization in the year following exposure to the excluded providers, the study showed.

The study also found that patients treated by providers who were later excluded from Medicare for fraud and abuse were more likely to be low-income, non-white, and disabled.

READ MORE: 13 States Still Struggle to Check Providers to Avoid Medicaid Fraud

“Sadly, provider fraud and abuse affects some of our most vulnerable patients,” Nicholas explained in the press release. “If we can find and remove providers committing fraud and abuse more quickly, we can save patient lives, improve health outcomes, and prevent unnecessary spending.”

Medicare program integrity has risen to the top of CMS’ priority list. For example, the agency, alongside the Department of Justice, FBI, HHS Office of the Inspector General, and the federal Health Care Fraud Unit have engaged in several major healthcare fraud takedowns in the last couple of years.

Most recently, the Department of Justice announced the arrest of 35 individuals, including ten medical professionals, in September for their involvement in national healthcare fraud schemes that cost Medicare over $2.1 billion.

In addition to stopping Medicare fraud and abuse, CMS is also bolstering its prevention efforts. Last month, the agency highlighted its use of artificial intelligence and new technologies to reduce reliance on human resources and prevent fraud from occurring in the first place.

“This new technology could allow the Medicare program to review compliance on more claims with less burden on providers and less cost to taxpayers,” explained CMS Administrator Seema Verma in the official blog post. “Advanced analytics and artificial intelligence (AI) can perform rapid analysis and comparison of large scale claims data and medical records that could allow for more expeditious, seamless and accurate medical review, and ultimately, improved payment accuracy.”

READ MORE: Telemedicine at Center of Billion-Dollar Healthcare Fraud Scheme

But AI and other new technologies can also exacerbate the Medicare fraud and abuse problem, which cost the federal government between $30 and $140 billion a year. Telehealth, for example, was in the spotlight in September after the owner and CEO of Video Doctor Network pled guilty to one of the largest healthcare fraud schemes ever investigated by US authorities.

While technology can make it easier for bad actors to infiltrate the Medicare program, more complex care and payment delivery models are also making it more difficult for authorities to identify fraud and abuse. CMS pointed out in the blog post that “program integrity risks become increasingly difficult to recognize” as programs encourage greater collaboration among providers, payers, and other stakeholders.

Prevention will be the key to saving Medicare program integrity, billions in taxpayers dollars, and ultimately the lives of beneficiaries, as the latest research shows.