House Ways and Means Committee Explores Comprehensive Strategy in Combating Medicare and Medicaid Fraud

Topics: Efficiency, Financial Crime, Government, Government Fraud

government fraud

On July 17, the U.S. House Ways and Means Committee held a hearing to discuss the existence of fraud within Medicare and Medicaid and how best to combat it.

Chairman Lynn Jenkins (R-Kansas) gave opening remarks that provided detailed facts about the programs and emphasized their importance. Currently, 60 million U.S. citizens rely on Medicare and Medicaid for which the U.S. spent approximately $702 billion last year. This amounts to 15% of all federal expenditures, and which is expected to increase by 7% to $1.5 trillion annually by 2028.

Purpose of the Hearing

Medicare has been designated a high-risk program for three decades because of the amount of money spent on it each year and how difficult fraud is to measure and identify. For instance, the Centers for Medicare and Medicaid Services (CMS) identifies improper payments within the Medicare and Medicaid programs, but it is difficult to tell whether they are related to fraud or a genuine mistake. As of today, there is no comprehensive strategy to combat fraud within that program, and the purpose of this hearing was to form ideas on how such a strategy can be developed and what it would look like.

Witness Testimony

Three witnesses attended the hearing: Seto J. Bagdoyan, Director of Forensic Audits and Investigative Service at the Government Accountability Office (GAO); Gloria L. Jarmon, Deputy Inspector General for the Department of Health and Human Services (HHS); and Alec Alexander, a former U.S. attorney who is now Director for the Center for Program Integrity for CMS.

The witnesses told how each of their respective organizations has already begun to tackle Medicare and Medicaid fraud in some way. CMS, for example, is attempting to create an anti-fraud culture within their office to help employees understand how to identify potential fraudulent activities. CMS also targets certain areas of the programs, such as home healthcare providers, in order to focus their search and produce results. It has also established monitoring and evaluation mechanisms for program integrity that could be aligned with anti-fraud measures and goals. Alexander, along with CMS, is leading a Major Case Coordination program that enables the Department of Justice (DOJ), HHS, and CMS to collaborate before, during, and after fraud leads.

Last month, this coalition announced the largest healthcare fraud enforcement action by the Medicare fraud strike force, charging 600 defendants for the loss of $2 billion in Medicare and Medicaid expenses. As impressive as these programs are, the U.S. still lacks a comprehensive anti-fraud strategy.

A National Strategy is the Key

A national strategy is the best way to combat Medicare and Medicaid fraud because it would enable every agency and office involved to target fraud risk and find fraudsters more easily. The Ways and Means Committee could introduce a risk-based strategy that would allow GAO, CMS, DOJ, and its Office of Inspector General (IG) to coordinate efforts in discovering the high-fraud risk areas of these programs.

Fraud is not a static issue — it changes form, geographic location, source, etc., which is why going after the areas of high-fraud risk will yield better results than finding the fraudsters one at a time.

ACA Provides the Needed Enforcement Authority 

However, such a strategy will fail if the Affordable Care Act (ACA) is repealed.

US Rep. Suzan DelBene (D-Wash.) posed the question of whether CMS would have authority to impose penalties on providers and suppliers who knowingly participate in fraud schemes. After CMS’s Alexander produced several incomplete answers, Rep. DelBene took the liberty of stating that CMS may no longer have the authority to impose such penalties because the ACA is what gives CMS its enforcement and disciplinary authority.

This presents a potentially serious issue for the U.S. government because if the ACA is repealed, efforts to combat Medicare and Medicaid fraud would be severely hindered. But then again, if the ACA is repealed, there would be a diminished healthcare program left for the U.S. to monitor against fraud.

Assessment Completion Date

Assuming this hypothetical does not happen, it appears that the main purpose of creating a comprehensive strategy is to get all the agencies on the same page, rather than allowing each to have their own anti-fraud programs.

Alexander said he believes that an assessment of Medicare and Medicaid’s high-fraud risk areas can be completed by fall 2019 so that this comprehensive strategy can be implemented.

Maximilian Raileanu, a legal intern at Berliner, Corcoran & Rowe, contributed to this report.