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Auditors find fraud, make profit

WASHINGTON — In coming weeks, private audit companies will begin scouring mountains of medical records. Their mission: determine if health care providers erred when billing Medicare and require them to return any overpayments to the federal government. The auditors will keep a tidy percentage for their services.

In three years, they've returned more than $300-million to the federal government — and that's just from three states, including Florida. That experiment is winding down. But a larger, national program will soon take its place.

The rollout of "recovery audit contractors" will be gradual. They'll monitor health care providers in 19 states beginning this spring. In October, an additional five states will join.

While the contractors are often described as overzealous, that's a compliment as far as one watchdog group is concerned.

"A little zealotry is what we're looking for on the part of the taxpayers," said Leslie Paige, spokeswoman for Citizens Against Government Waste.

The program's critics say that contractors have too much incentive to question as many claims as possible. That's because they get to keep about 20 percent of the overpayments.

"What we have here is bureaucrats and government contractors coming in and trying to second-guess what doctors and nurses have done in a hospital setting," said Don May, vice president for policy at the American Hospital Association. "They're playing Monday morning quarterback."

Health care providers are nearly unanimous in their dislike of the program's continuation, much less its expansion. Many lawmakers have similar sentiments. A bill sponsored by Rep. Lois Capps, D-Calif., calls for a one-year moratorium.

Capps, a nurse, is concerned that legitimate Medicare bills are being denied for reasons that aren't being well communicated to the providers.

Kerry Weems, the acting administrator for the Centers for Medicare and Medicaid Services, said he has tried to address many of the concerns. When the program goes national, all contractors must have a medical director on staff. The agency also is limiting to three years how far back auditors can look when reviewing patient records.

The government will spend about $430-billion this year on Medicare, which provides health coverage to 44-million elderly and disabled people. The size of the program, with more than 1.2-billion claims filed each year, not only makes it ripe for fraud but also for mistakes. The Office of Management and Budget estimates that errors total about $10.8-billion a year.

A report from the Centers for Medicare and Medicaid Services shows that contractors reviewed about 930-million claims in Florida, California and New York during the program's first 2 1/2 years. They identified errors in less than 0.2 percent of the claims reviewed.

What gets health care providers most upset is when auditors determined a procedure or hospital admission was not medically necessary.

May said that there's a "lot of gray area" when it comes to whether a patient needs to be admitted to a hospital or rehab facility. Often the patients have diabetes or other complicating factors that prompt a physician to want closer monitoring.

"You need a physician looking at these daily if not more so to make sure the patients are being managed effectively," May said.

Auditors find fraud, make profit 03/01/08 [Last modified: Thursday, October 28, 2010 9:21am]
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