Fraud is so rampant in the Medicare and Medicaid programs that at times it seems impossible to stop. But a new study shows that the government’s efforts to take down fraudsters are working, and we’re on track to predict and prevent fraud before it starts.
A study from Harvard Medical School and the University of Southern California, published in JAMA Network Open, found that between 2007 and 2017, the number of doctors who were barred from billing Medicare and Medicaid increased by 200 percent. These physicians were kicked out of federal insurance programs for one of three reasons: they committed health care crimes; they participated in a health care fraud scheme, or they illegally prescribed a controlled substance.
How were so many crooked physicians found out? There’s no doubt that some of it is due to whistleblowers coming forward to report fraud. Federal investigators rely on tips from people who have first-hand knowledge of fraud happening in their workplaces, and it remains one of the best ways to identify and take down criminals. Although we don’t know if there have been more whistleblowers in the last decade, it is possible that hotlines and online reporting forms have made it easier for people to come forward.
In addition to whistleblower activity, the authors of the study believe these improvements have been made because of expanded fraud prevention and combat efforts. Both the federal and state governments are simply getting better at figuring out who is committing these crimes and holding them accountable.
This is due in part to a predictive analysis tool Medicare introduced in 2011, which is used to identify doctors who might be gaming the system. Inspired by similar systems used to pinpoint credit card fraud, the tool flags four types of potentially fraudulent charges in the system:
- Rules-based: Charges that clearly broke Medicaid rules (i.e., a charge made with a stolen Medicaid ID);
- Anomaly: Charges for procedures that almost certainly didn’t happen (i.e., a charge made by a doctor who billed for procedures when he was out of the country);
- Social networking: Suspicious charges made by physicians who have worked with known fraudsters;
- Predictive models: Suspicious charges made by doctors who fit the profile of a provider likely to commit fraud.
After a charge (or several charges) are flagged, potential cases are passed on to investigators to look into them further.
Although predictive analysis has helped generate higher quality leads for investigators (which has clearly made a dent in the number of providers committing health care crimes), this strategy isn’t perfect. It’s not uncommon for them to generate false positives, especially with the predictive model. Just because a doctor fits the bill for fraud, that doesn’t mean they’re actually committing a crime.
However, the Harvard Medical study researchers believe they can help make this tool even more precise.
Study authors not only researched the number of doctors kicked out of Medicare and Medicaid, but they took a close look at those doctors to identify common characteristics. They found that the providers who committed fraud were predominately:
- Graduates of osteopathic medical schools or medicals school outside the U.S.; and
- Doctors without faculty appointments at medical schools.
Additionally, doctors who were forced out of federal insurance programs came mostly from a few areas of medicine: psychiatrists, internal medicine, family medicine, anesthesiologists, surgeons, and OBGYNs.
The study doesn’t say why there tends to be more fraud in these areas. Perhaps certain types of people are drawn to these careers, or maybe it’s easier to submit false claims at these practices. Either way, by pinpointing these qualities, the study authors hope they can make Medicare’s predictive analysis tools even better.
That’s a good thing for taxpayers. The better the government is at tackling fraud; the more tax dollars are saved from lining the pockets of criminal doctors. Plus, it helps government investigators reserve resources and focus on the biggest, most egregious fraud.
Improvements are already being seen. In 2017, the Department of Justice and the Department of Health and Human Services recovered $2.6 billion from health care fraud schemes. In 2018, 600 people were charged in the largest health care fraud takedown ever seen. Armed with information from this study, federal investigators will be able to take down more medical providers committing fraud.
Still, there is only so much that investigators at the top can do, no matter how much technology they have. Not every provider committing health care fraud will fit the predictive analysis profile, and others may be very good at covering up their tracks.
Even if investigators have the technology to flag potentially fraudulent charges, it may not be enough to initiate a case. Whistleblowers with insider information are still needed to gather evidence and provide testimony. With this additional information, investigators are often able to secure higher verdicts and settlements or ensure that criminals are put behind bars.
Under the U.S. and state False Claims Acts, whistleblowers that report healthcare fraud involving Medicaid or Medicare could be entitled to a percentage of any verdict or settlement. Report fraud today, and you might earn a multimillion-dollar reward - hundreds of whistleblowers have already received rewards.