Healthcare Fraud
Beneficiaries Should Not Have To Pay the Price
Summary: The Trump administration's CRUSH initiative aims to reduce Medicare and Medicaid fraud by targeting provider-driven schemes in DMEPOS, AI billing, and managed care. Advocacy groups warn that new, strict regulations could harm beneficiaries, urging CMS to focus on corporate accountability rather than creating barriers to care for the disability community. You can find more information about this issue on the CMS website.
One of the significant initiatives of the Trump administration this year is addressing claims of waste, fraud and abuse in federal programs such as Medicare and Medicaid. The initiative is called “Comprehensive Regulations to Uncover Suspicious Healthcare” (CRUSH), and it outlines a set of enforcement and regulatory priorities that this administration is exploring to reduce funding inefficiencies nationally. As part of the CRUSH initiative, the Centers for Medicare & Medicaid Services (CMS) conducted a Request for Information earlier this spring to address claims of waste, fraud, and abuse into our federal public health programs.
With their initiative, CMS identified a goal of strengthening fraud detection, prevention and response across our federal health care programs. They indicated areas of exploration and concern, calling attention to areas with implications for the disability community in particular: durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) suppliers; artificial intelligence in coding and billing; and concerns with the federal Marketplace and Medicaid. This RFI is a potential first step towards advancing new rules affecting Medicare, Medicaid and the ACA Marketplace. The public comments on the RFI included submissions from a number of disability allies and public health advocates. Many organizations are making the point that any waste, fraud or abuse that does exist is generally not being done by the beneficiaries who are the recipients of care paid for by these programs. The vast majority of fraud is done by providers and healthcare financing organizations. The following selections are from comments submitted by organizations to CMS’s RFI.
On Corporate Accountability:
Some organizational comments focused on steps that CMS could take to ensure that companies are held accountable for their practices and take actions that would reduce the likelihood of waste, fraud and abuse. Comments from Families USA and AARP follow:
“Federal oversight findings from HHS OIG, the U.S. Government Accountability Office (GAO), and the U.S. Department of Justice make clear that the most significant threats to Medicare and Medicaid program integrity come from organized provider fraud and market-based schemes, not from individual beneficiaries. These investigations have uncovered networks in which marketers, brokers, telemedicine platforms, laboratories, and equipment suppliers collaborate to generate medically unnecessary claims. These examples provide compelling evidence that the misaligned financial incentives of our health care payment and delivery system are a far greater vulnerability for fraudulent billing schemes than the concern that low-income families and seniors might improperly receive health insurance coverage.” (Families USA)
Families USA identified a key area of fraud risk with the growth of Medicaid Managed Care Organizations (MCOs), which are now serving a majority of Medicaid enrollees across 42 states, accounting for over half of all Medicaid spending nationwide. Without adequate oversight of their operations, Families USA recommended these core proposals to address possible unjustified spending:
Require MCOs to report publicly on prior authorization processes and require states to audit prior authorization denials.
Require states to publicly post Medical Loss Ratio (MLR) reports submitted by MCOs and obligate MCOs to pay remittances to the state when they do not meet minimum MLR requirements.
Require all states to publicly report MCO sanctions data and establish a publicly available dashboard to make data on state MCO sanctions easily accessible.
Publicly post all approved state Medicaid contracts with MCOs.
Develop best practice guidance for states to adopt managed care procurement policies that incentivize high-performing plans and cultivate greater competition in the managed care market
AARP added to this emphasis on corporate accountability: “CMS should require greater transparency regarding parent-company and complex ownership structures. Although current enrollment rules require disclosure of direct and indirect owners, they do not fully capture the layered corporate relationships that increasingly characterize the post-acute and long-term care industry. Requiring clearer disclosure of parent companies and related entities would improve CMS’s ability to hold corporate owners accountable for systemic misconduct and deter fraudulent actors from shifting ownership structures to avoid detection.” (AARP)
On Decision-Making and AI
The National Association of Medicaid Directors asserted that machine learning could play an important role in provider accountability and fraud detection. Expanded use of AI in relationship to care was advised against by other organizations. AARP submitted:
Medical decisions should remain in the hands of patients, their families, and their trusted providers—not third-party contractors or algorithms. Fairness, transparency, and accountability should guide all uses of AI or other algorithmic tools that make consequential decisions regarding a patient’s health, coverage, or well-being. […] We are especially troubled by arrangements that pay artificial intelligence vendors based on how much “savings” they generate, which creates a clear incentive to deny care. AARP believes AI can and should play a constructive role in Medicare, but its purpose should be to identify and stop fraudulent or improper payments—not to substitute for medical judgment or punish patients for fraud committed by providers. (AARP)
On Durable Medical Equipment, Prosthetics, Orthotics Suppliers (DMEPOS)
One of the areas that unfortunately has seen an inordinate amount of bad actors committing waste, fraud and abuse is in the area of Durable Medical Equipment, Prosthetics, Orthotics Suppliers (DMEPOS). These items are utilized by the disability community and necessary for those with mobility disabilities to live independent lives and fully engage in their community. Many times, people are misled by those who are offering these services. AARP provided the following comment which would address the concerns related to DMEPOS companies:
“We suggest CMS conduct an annual review by CMS of DMEPOS suppliers’ advertising and marketing materials to ensure beneficiaries are instructed to work with their own doctor to be prescribed and obtain medically necessary supplies, similar to prescription drugs, and avoid advertising “free” supplies. […] On the issue of advertising “free” supplies, we suggest prohibiting use of that term in advertising. CMS can further clarify that even though a Medicare beneficiary may or may not have to pay cost-sharing for a DMEPOS supply, since it is submitted for payment via a claim to Medicare and only approved if determined to be medically necessary. The claim could later be denied, and therefore it could have a potential cost or have other implications for a beneficiary’s future benefits. (AARP)
On Medicaid and CHIP
The Disability and Aging Collaborative (DAC) and Consortium for Constituents with Disabilities (CCD) focused their comments on Medicaid and CHIP, especially on ensuring the availability of Home and Community-Based Services (HCBS). To this issue, they highlight that increased spending should not be interpreted as proof of fraud:
“Categorically identifying HCBS services as “high risk” is misleading. Increased enrollment in a particular program, increased spending on HCBS, or an increased number of direct care workers alone or in combination may be reflective of trends that have nothing to do with program integrity. HCBS spending has been increasing across the country as a direct result of decades of work by families, people with disabilities, and older adults who want to live, work, and age with dignity in their own homes and communities, alongside bipartisan federal and state efforts to rebalance funding to HCBS from institutional care. Simply put, more people are enrolled in Medicaid HCBS and fewer people are relying on more expensive institutional care.” (CCD & DAC).
CMS should strengthen Medicaid data analytics to identify and prevent fraud, including maximizing use of existing data sources (such as electronic visit verification data), determining if any additional data is needed, improving transparency and data sharing in Medicaid managed long-term services and supports, and considering whether additional quality measures (including questions in HCBS consumer experience surveys) could help identify patterns of fraud. (AARP)
Fraud prevention is a critical part of the ongoing work that has traditionally been accomplished through a well-funded Medicaid program nationally. The National Association of Medicaid Directors (NAMD) outlines how efforts to maintain program integrity are a critical part of its efficiency and function, including expanding the offerings of the existing Medicaid Integrity Institute (NAMD). Whenever fraud prevention is addressed, it must not open the door for vulnerable people losing access to services. Federal fraud allegations have put essential HCBS programs at risk of underfunding and program cut-offs for disabled individuals and their families. Building out a robust fraud reduction strategy must be targeted and conscientious, and not removing the essential services that allow people to live their lives and maintain their health.
“Every dollar lost to fraud or improper payments is a dollar taken away from Americans who rely on affordable coverage programs for their care. Innocent individuals should never be forced to pay the price, whether through broad-stroke efforts that withhold or defer payments to states, delays in needed care, barriers to services like home and community-based services (HCBS), or burdensome bureaucratic hurdles that jeopardize their wellbeing. (AARP)
Conclusion
Any efforts to eliminate waste, fraud and abuse in public programs should not harm innocent beneficiaries who rely on these programs for their healthcare. Special attention needs to be taken to avoid potential unintended consequences which could result due to any new rules and regulations aimed at eliminating fraud. Any new administrative burdens which could result in delays to get approval have the potential to cause delays in care which could lead to poorer outcomes. The areas that CMS appear to be focusing on our items like durable medical equipment which are generally used by people with disabilities. This means that any of these new rules could have disproportionate consequences for the disability community. Instead of potentially cutting off needed healthcare and services for recipients, CMS should direct its efforts to eliminate waste, fraud and abuse through law enforcement mechanisms and create a legal deterrent to those who try to commit these crimes. Making people with disabilities who rely on these public programs as the ones who pay the price of fraud is misdirected and does not punish the true bad actors responsible. Let’s protect those who are innocent in the system and uphold our public trust to ensure they have full access to the care they need.
About the Authors
Karl D. Cooper, Esq. is an attorney, disability advocate, and Executive Director of the American Association on Health and Disability, where he leads work to advance health equity for children and adults with disabilities through policy, research, education, and dissemination.
Before joining AAHD, he practiced law in the Philadelphia area for 14 years and provided pro bono advocacy for people with physical and developmental disabilities. He also serves as Immediate Past Chair of the Disability Section of the American Public Health Association and Chair of APHA’s Intersectional Council.
Michelle Sayles, MA is Director of Communications, American Association on Health and Disability (AAHD).