OIG Says Anti-Fraud Efforts Saved Government $35.4 Billion

WASHINGTON–The Department of Health and Human Services Office
of Inspector General said it saved the government $35.4 billion
with its anti-fraud activities during fiscal 2005.

In its semiannual report to Congress, OIG reported that it
negotiated $1.4 billion in civil and administrative settlements
related to Medicare, Medicaid and other federal health care
programs in fiscal 2005, which ended Sept. 30.

During this period, OIG excluded 3,806 individuals and entities
from participating in federally sponsored health care programs, and
reported 537 criminal actions and 262 civil actions.

HHS Inspector General Daniel R. Levinson said accountability for
Medicaid funds and payment for Medicaid prescription drugs were
focal points of OIG work this period. The Dec. 2 report also cited
a number of DME-related examples in the government’s efforts to
combat fraud and abuse, including:

–The owner of a Texas DME company was sentenced to 41 months in
prison and ordered to pay $2.2 million in restitution for health
care fraud and money laundering. As part of the scheme, the man
paid recruiters for locating Medicare patients and paid physicians
for fraudulent certificates of medical necessity and prescriptions
for wheelchairs. Though Medicare was billed for power wheelchairs,
beneficiaries either never received wheelchairs at all or were
provided with much less expensive scooters.
–An Oregon DME supplier and its owner were sentenced for charges
related to paying business associates to induce Medicare referrals.
The company received reimbursements from Medicare for wheelchairs
and accessories, hospital beds and enteral nutrition that were not
medically necessary. A $2 million settlement agreement was
previously reached, resolving their liability for DME that was
allegedly either not provided or medically necessary and for
allegedly using CMNs that were false, fraudulently obtained or
forged.
–Home Health Corp. of America agreed to pay $300,000 and enter
into a five-year integrity agreement to resolve its liability under
the Civil Monetary Penalties Law provisions applicable to
kickbacks. OIG alleged that from February 1997 through May 1998,
HHCA made payments in the form of loans, consulting fees and
monthly space rental payments to six physicians located in
Pennsylvania and Florida in exchange for their referral of Medicare
beneficiaries requiring home health services and/or DME provided by
HHCA.
–United Healthcare Insurance Co. agreed to pay $3.5 million to
resolve allegations that the contractor defrauded the Medicare
program from 1996 to 2000. The government alleged that United
Healthcare’s telephone response unit mishandled beneficiary and
provider phone inquiries and falsely reported its performance
information to CMS while under contract with CMS as a regional
carrier for DME claims.

The report also updated OIG’s September 2004 report on Medicare
payments for home oxygen equipment. The MMA mandated that CMS use
Federal Employees Health Benefits plans’ median payment rates to
reduce Medicare fee schedule allowances for home oxygen equipment
in 2005. As a basis for those rates, OIG issued a report analyzing
FEHB median payments for home oxygen equipment.

But because questions were raised about the inclusion of oxygen
contents for stationary and portable equipment in FEHB payment
rates, OIG conducted additional work to clarify data in its earlier
study and found that the plans’ median payment rates were 12.4
percent lower for stationary equipment and 10.8 percent lower for
portable equipment. The greatest difference between the median FEHB
payment rate and the median Medicare fee schedule allowances was
for oxygen concentrators.

While actual fee cuts varied by state, this year CMS reduced
rates by an average of 8.6 percent for stationary oxygen and 8.1
percent for portable equipment.

OIG said its $35.4 billion in savings and expected recoveries
include $32.6 billion in implemented recommendations and other
actions to put funds to better use; $1.2 billion in audit
receivables; and $1.6 billion in investigative receivables.

To view the report,
click here.