U.S. Sees $15 to 24 Billion in Medicaid Fraud and Abuse Each Year

WASHINGTON–Some 5 to 8 percent of state and federal Medicaid
funding is generally believed to be lost to fraud and abuse, a CMS
official said.

That range–which was quoted to senators at a March 28 Homeland
Security and Governmental Affairs subcommittee hearing–translates
to $15 billion to $24 billion each year from the $300 billion
program, according to a BNA report.

CMS Center for Medicaid Services Director Dennis Smith said
fraud “comes in a variety of shapes and sizes,” with the greatest
area of concern involving health care providers who have an
incentive to overbill Medicaid.

The Subcommittee on Federal Financial Management, Government
Information and International Security examined recent attempts to
fight Medicaid fraud–including provisions in the recently passed
Deficit Reduction Act, such as improved enrollment documentation
requirements, incentives for states to enact false claim acts and
additional funding for the OIG to control fraud and abuse.

Smith said the DRA also mandates the creation of a new Medicaid
Integrity Program, requiring CMS to develop a comprehensive plan to
audit, identify and recover overpayments as well as provide
education.

Aggressive prosecution is a necessary component of any fraud
control program, according to Subcommittee Chairman Sen. Tom
Coburn, R-Okla.–he said more physicians and providers need to go
to jail as an example of what happens when people steal from
Medicaid, BNA reported.

“I’m hot after this [fraud] because this is where the money is,”
Coburn said. “We’ve got to get better.”

According to HHS Inspector General Daniel Levinson, the federal
share of each state’s Medicaid costs is anticipated to total more
than $192 billion this year.

For more information on the subcommittee hearing,
click here.