Three thousand five-hundred miles and change later, I find myself back at my desk after a productive and enjoyable week off. For an ongoing summation of my time away, feel free to visit this blog. I promise that I spent my time in a mostly virtuous fashion.
I’d like to re-enter the discussion of the audit universe today with another in a stream of salient examples of corporate payola from the Medicare program. Last Summer, CMS launched a new predictive modeling computer system to pre-emptively stop fraudulent Medicare payments. The total cost of the computer system is estimated to be roughly $100 million, with $77 million having been spent thus far. Northrup Grumman and IBM are two of the main corporations behind the system.
As of the end of 2011, this grand investment has halted exactly one payment for $7,591. On a related note, there was a fly in my house the other day, so I called a company with a wrecking ball rather than reaching for a flyswatter.
Like any other human being, I like being proved right from time to time. I observe every governmental investment in something new and flashy through the lens of what’s in it for private enterprise. Being a citizen of a kleptocratic oligarchy, I have become far too used to industry skimming tax dollars out of the till for no apparent payback. We have all seen this with the rather poor RAC results after nearly 2 1/2 years of audits, with successful provider appeal rates still astronomically high. Given the reams of anecdotal evidence, it makes perfect sense to me that private enterprise gets a government check for very little demonstrated benefit.
I like things that work, and one method that has worked well among CMS’ many blind skeet shooting expeditions is human investigations. The Health Care Fraud Prevention and Enforcement Action (HEAT) Team continues to see tremendous success from their efforts. Through the first 8 days of February alone, the HEAT teams either released indictments or gained guilty verdicts against entities involved in roughly $139 million in health care fraud. Yesterday in Texas, an indictment was unsealed on seven defendants involved in over $375 million in either phony or unnecessary home visits. As part of the investigation into the physician at the center of the fraud, 78 home health care agencies found their Medicare payments suspended. I don’t know about you, but this represents success to me. I’m fairly certain that the payroll of the government-employed human investigators is significantly lower than $77 million.
The deputy director of Medicare’s anti-fraud program called the act of judging their efforts solely from payment suspensions as “unsophisticated”. I find this wording to be alarmingly typical of the institutional arrogance I encounter as a citizen whenever I ask questions about why someone is being paid by tax dollars for providing nothing. Predictive modeling, if designed properly, holds great promise. Yet if the brains of Northrup Grumman and IBM can’t get immediate results in the year 2012 right out of the gate, it bears asking, “who can?”.
When all of the checks are cut, Medicare is in need of much better than a 1/10,000 return on investment.
Paul Spencer will be presenting at the Fi-Med RAC Summit in Milwaukee, WI on April 16th and 17th, 2012. Visit the Summit website for further information.