Rx Drugs, Home Health Lead Government’s Anti-Fraud Agenda

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By James Swann

Prescription drugs and home health services are the top two anti-fraud priorities for the government, due to high spending levels and claims error rates.

Spending on the Medicare Part D outpatient drug program is increasing faster than all other programs within Medicare, making it vulnerable to fraud, Gregory Demske, chief counsel for the Health and Human Services Office of Inspector General, said March 29.

Demske, speaking at an American Health Lawyers Association event in Baltimore, also said the nationwide opioid epidemic has made cracking down on prescription drug fraud a priority. Drug diversion schemes are common in prescription drug fraud and involve illegally obtaining opioids to either resell them or abuse them.

A third of all Medicare beneficiaries are prescribed at least one opioid a year, Demske said, highlighting the extent of the problem.

Demske said 20 percent of all OIG investigations involve prescription drug fraud.

Home health remains a top priority for the HHS OIG as well due to its high claims error rate (42 percent in 2016), Demske added.

“We remain very concerned about the integrity of home health payments,” Demske said.

Program Vulnerabilities

The HHS OIG is focused on several additional programs vulnerable to fraud, including Medicare Part C (managed care), which Demske said had been thought to be less prone to fraud due to its risk-adjusted payment model.

Medicare Advantage managed care plans submit patient diagnosis codes for payment to the Centers for Medicare & Medicaid Services, and the CMS performs a risk adjustment data validation to determine if the diagnoses are supported by medical documentation.

Demske identified one Medicare Advantage fraud scheme from last year in which a doctor was inflating patient diagnoses to get higher payments.

The OIG also continues to find fraud within hospice care, laboratories and durable medical equipment, Demske said, and will continue to conduct hospital compliance reviews.

Return on Investment

A good return on investment can be an important metric in assessing the success of anti-fraud enforcement, and Demske lauded the government’s anti-fraud ROI.

The Health Care Fraud and Abuse Control account produces a return of $5 for every $1 invested, Demske said, though this underestimates the overall results.

Exclusions and jail sentences that are the end result of HCFAC funding may not bring in money, but they do prevent criminals from harming federal health-care programs.

“The OIG is bringing more high-impact exclusion matters against doctors who should be out of the program,” Demske said. An exclusion prevents a provider from participating in federal health-care programs, and high-impact exclusions refer to providers who have participated in extensive fraud schemes.

The HCFAC program coordinates federal, state and local law enforcement activities related to health-care fraud and abuse.

The fiscal year 2016 report on the HCFAC program was issued by the HHS and the Department of Justice in January.

To contact the reporter on this story: James Swann in Washington at jswann1@bna.com

To contact the editor responsible for this story: Kendra Casey Plank at kcasey@bna.com

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