Estimates of how much Medicare loses to waste, fraud and abuse range as high as $100 billion annually. A congressional subcommittee heard earlier today at least some of the reasons why so many tax dollars go down the Medicare drain every year.
In addition to federal law enforcement resources, the Department of Health and Human Services has used private sector contractors for years to fight waste, fraud and abuse. But many of these contractors are at least a decade behind in adopting the most effective tools for detecting such activities.
Robert Vito, an HHS regional inspector general, told the House Energy and Commerce subcommittee on oversight and investigations that many of the problems with the contractors identified a decade ago still have not been fixed.
“Proactive data analysis has not represented a significant portion of benefit integrity contractors’ activities. Instead, much of the benefit integrity contractors’ fraud identification relies on reactive methods, such as complaints from external sources,” Vito said.
“The lack of proactive and early identification of fraud results in the Medicare program relying on the familiar ‘pay and chase’ model rather than a risk reduction model that includes early detection and prevention of inappropriate payments,” he said.
In other words, the contractors typically wait until somebody tells them about a problem, then tries to chase down the perpetrators, instead of using data analyses to identify problems themselves and go after them.
As a result, for example, only 13 percent of all the anti-waste and fraud cases initiated by the contractors working on Medicare’s Part D prescription drug benefit program were the result of proactive data analyses, Vito said.
Vito said his office had reported on the lack of proactive data analysis in a 2001 report to Congress. Many of the recommendations in that report remain unfulfilled, he said.
In partial defense of the contractors, Vito pointed out to the subcommittee that many of them reported being unable to get the kind or quantity of data required to do such analyses. And much of the data that is received is inaccurate or inconsistent.
In addition, Vito said HHS’s Center for Medicare and Medicaid Services (CMS) does too little to monitor the performance of the contractors.
“CMS has not systematically assessed the wide variation across contractors’ activity data. In fact, CMS’s contractor performance evaluations provide very few quantitative details about the contractors’ achievements in detecting and deterring fraud and abuse,” he said.
For more from Vito’s testimony, go here.
