WASHINGTON, D.C. – As law enforcement announced a nationwide sting against Medicare fraudsters, a bipartisan group of lawmakers was putting the finishing touches on legislation aimed at making a significant dent in the problem.
Justice Department officials announced that they had arrested 90 people, with more than half being from South Florida. The arrests were on charges related to defrauding $260 million from the Medicare program.
“This is exactly why we’re doing the legislation,” said U.S. Sen. Bill Nelson (D-FL) who chairs the Senate Special Committee on Aging. “We’ve got to get this problem under control.”
Nelson’s legislation would require Medicare to verify that those wishing to enroll in the program have not owned a company that previously defrauded the government. The bill also will allow private insurers to share information about potentially fraudulent providers with Medicare, and requires new medical coding systems to be tested before they’re deployed to ensure Medicare’s fraud prevention systems work properly.
The bill is co-sponsored by Sens. Sue Collins (R-ME), ranking member of the Aging committee, and Chuck Grassley (R-IA) and Tom Carper (D-DE).
According to at least one recent estimate, fraud in the country’s Medicare system takes some $60 to $90 billion out of the system and puts it into the pockets of crooks.
The lawmakers are planning to formally file the bill on Thursday. The legislation is expected to garner support from various consumer and industry groups.
Attached is a summary of the bill:
STOP SCAMS ACT OF 2014
Sponsors: Sens. Bill Nelson, Susan Collins, Tom Carper, Chuck Grassley
THE MEDICARE PROGRAM NEEDS TO IMPROVE SAFEGUARDS AGAINST FRAUD
The Medicare program is particularly vulnerable to fraud as it goes through significant changes and implements a variety of new policies. Among these is the future adoption of new code sets; new provider enrollment procedures; limited resources; and the ever-increasing sophistication of Medicare fraud schemes. The Medicare program needs to carefully test new systems to assess their impact on detection and prevention of fraud prior to deployment. It needs to be able to better identify and keep out of the program those who have a known history of defrauding the government. And finally, it needs to know how much fraud is in the system, and what its greatest vulnerabilities are, to target resources effectively.
MEDICARE FRAUD: A GROWING PROBLEM
In FY 2012, the Justice Department opened 1,131 new criminal health care fraud investigations involving 2,148 potential defendants, and a total of 826 defendants were convicted of health care fraud-related crimes during the year.
According to at least one estimate, Medicare fraud is estimated to cost taxpayers $60 billion to $90 billion each year.
STOP SCAMS ACT OF 2014
The Stop SCAMS Act of 2014 helps safeguard taxpayer dollars and reduce fraudulent payments by:
PARTNERING WITH THE PRIVATE SECTOR TO REDUCE MEDICARE FRAUD
Allows private insurers to share information about potentially fraudulent providers with Medicare and each other to prevent health care fraud — Coalition Against Insurance Fraud’s testimony supports this public-private partnership.
REQUIRING INDEPENDENT VERIFICATION OF PROVIDER OWNERSHIP INTERESTS
Under Medicare currently, providers who previously had an ownership interest in an organization that defrauded the Medicare program could potentially get back into the program by using a different name and failing to disclose their interest in the previous organization — how the Wolf of Wall Street’s business partner allegedly defrauded Medicare after failing to disclose his ownership interest in the company. The bill would require Medicare to verify provider ownership interests using other databases, including information obtained under the Physician Payments Sunshine Act.
TESTING MEDICAL CODES BEFORE IMPLEMENTATION
Require full end-to-end testing of code sets before implementation of the new codes, to ensure that payments to providers are not delayed and fraud prevention systems continue to work appropriately. Before HHS could implement any new coding system, it would be required to certify to Congress that all testing had been completed, and plans were put in place to remediate any impact on the timely payment of legitimate claims.
HARNESSING EXISTING RESOURCES TO BETTER TARGET FRAUD PREVENTION EFFORTS
Allow the Medicare Payment Advisory Commission to make recommendations regarding fraud prevention, and require the Medicare program to develop a strategy for reliably estimating the amount of taxpayer dollars lost each year to fraud.
ORGANIZATIONS ENDORSING THE BILL
National Healthcare Anti-Fraud Association, Coalition Against Insurance Fraud, the National Insurance Crime Bureau, America’s Health Insurance Plans, Humana and the Blue Cross Blue Shield Association.
I have reached that certain age; my brains have gone to pot.
Without a nap at midday comes a stupor of my thought.
I’m at my desk, dressed to the nines, a smile upon my face,
But deep inside I’m fast asleep, far gone in outer space.
A wooly fog descends upon the grey cells in my head.
Creative juices cease to flow – O, how I long for bed!
But the clock says I must toil another hour or two,
So I down a Red Bull to dissolve the mental glue.
One thing only is there now to stop my snores repeating;
Leaping to my feet I yell: “Hey, let’s all have a meeting!”
Portland, OR – Oregon’s Senator Jeff Merkley recently met with seniors at the Hollywood Senior Center and announced that he will be introducing legislation in the Senate that will increase Social Security benefits for seniors by changing the cost of living adjustment (COLA) formula to keep up with inflation. Since seniors spend more of their income on healthcare, housing and heating fuel than the average household, the current formula fails to keep up with the actual costs seniors face. The Merkley bill would provide a fair benefit to seniors.
“It’s time that we stop talking about reducing Social Security benefits and instead focus on giving our seniors a raise,” said Merkley. “I hear too many stories in Oregon about seniors who are struggling to stay afloat on their Social Security benefits and have to make a choice between medication and heating their home. It is unacceptable to have an inflation formula that steadily erodes the purchasing power of Social Security benefits. Seniors deserve better.”
Senator Merkley sees Social Security and Medicare as a covenant with seniors. People work their whole lives with the understanding and expectation that they can rely on these programs when they retire. He has been a strong critic of a proposal circulating in Washington, DC to reduce the Social Security COLA for seniors by moving to a new formula called chained CPI. For more than half of our seniors, Social Security constitutes a majority of their income. For a third, it is nearly 90 percent of their income.
The legislation announced by Merkley would move the Social Security COLA to the Consumer Price Index-Elderly (CPI-E) formula, which is designed to account for the unique spending patterns of seniors.
Currently the Social Security COLA is calculated by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) formula. Senator Merkley’s legislation would change the way that the Social Security COLA is calculated by replacing the CPI-W with the CPI-E formula.
Sen. Chuck Grassley of Iowa today made the following comment on the announcement from the Social Security Administration that it will suspend debt collection of payments more than 10 years old. The announcement came after The Washington Post reported on agency debt collection efforts on survivor benefits paid to now-deceased beneficiaries. Just before the Social Security Administration’s announcement, Grassley sent letters to the Social Security Administration and the Treasury Department, seeking information on how the agencies interpreted their authority to pursue the old debts as they have.
“Payment beneficiaries have to be accountable for overpayments from the government, but the government has to be reasonable and use common sense. Is it fair and reasonable to pursue debts from the surviving children for payments to the parents, no matter how long ago any overpayment occurred? The agency is right to revisit that point. However, it shouldn’t take embarrassing media coverage and lawsuits for this step to take place. Agencies should be able to apply common sense and fairness without a public firestorm. And Congress needs to be careful about legislating one line in an unrelated bill that an agency then develops into something possibly beyond what Congress intended. The statute of limitations language didn’t give the agency permission to collect debts where the debtor is deceased. It’s not clear where that authority came in. There’s a difference between collecting decades-old debt from the debtors and decades-old debt from their kids. I still expect responses to my letters.”
The Obama administration is abandoning a surprise plan to alter Medicare’s drug coverage after withering criticism from Congress and K Street.
Medicare chief Marilyn Tavenner alerted lawmakers Monday that her agency would not go forward with a proposal to give insurers more leeway to limit the number of drugs they cover for Medicare beneficiaries.
Critics argued that making the change, which was designed to save money, would have hampered seniors’ access to necessary drugs.
Democrats worried the issue would hurt them in the midterm elections, and House Republicans had scheduled a vote this week on a bill blocking the regulation from going forward.
The about-face is the latest example in which the Obama administration has changed its healthcare policies to try to benefit the president’s party.
Tavenner’s announcement means Medicare will continue to subject six classes of prescription drugs to stringent rules requiring insurers to cover nearly all medications in those classes.
If the change had gone forward, only three classes of drugs — cancer, HIV and anti-seizure medications — would have been subject to those rules.
“We will engage in further stakeholder input before advancing some or all of the changes in these areas in future years,” Tavenner wrote in a letter to lawmakers announcing the administration was backing off.
“We are committed to continuing to work with Congress to continue to ensure that Parts C and D work best for Medicare beneficiaries.”
Seizing the opportunity, Senate Minority Leader Mitch McConnell (R-Ky.) called on the administration to go a step further and withdraw its proposed cut to Medicare Advantage.
Set to be finalized next month, the rate reduction is opposed by Republicans and some Democrats, and GOP campaign committees are already using it to target opponents.
“We remain concerned about the impact of ObamaCare’s looming cuts to Medicare Advantage, something that was not addressed in today’s announcement,” McConnell said in a statement.
“Seniors need to know whether the president will stand by his word, and that they can keep the plans they have and like.”
The Obama administration’s quixotic push to alter Part D in an election year stunned the healthcare world when the regulations came out in January.
The Centers for Medicare and Medicaid Services (CMS) floated a long list of changes in addition to lifting “protected status” for three types of drugs.
One provision would have limited the number of Part D drug plans that insurance companies could offer in a specific region of the country.
Another would have relaxed the rules that govern plans’ preferred pharmacy networks, allowing all pharmacies to participate.
The regulations would have also permitted federal health officials to participate in negotiations between insurers and pharmacies in Part D for the first time.
Each change quickly triggered its own fight among industry groups.
Local pharmacies supported the relaxed rules for preferred networks, for example, while disease and patient groups slammed the changes to “protected status” drugs.
Altogether, the controversy produced an unprecedented backlash for the administration that united Republicans, Democrats and stakeholders across the healthcare world.
The CMS was flooded with communications from lawmakers, including a rare, unanimous letter from the Senate Finance Committee highlighting the likely harm to seniors.
The House Energy and Commerce and Ways and Means committees also weighed in with a unique bi-panel, bipartisan letter opposing the changes.
Tavenner walked back nearly all of the proposed changes Monday but vowed to finalize several smaller provisions, like strengthening certain standards for drug prescribers, in short order.
“We plan to finalize proposals related to consumer protections, anti-fraud provisions that have bipartisan support and transparency after taking into consideration the comments received during the public comment period,” she wrote.
The announcement received swift praise from healthcare groups that emerged to fight the regulations, such as the Washington, D.C.-based Partnership for Part D Access.
“We are thrilled that CMS has listened to the loud chorus of support for maintaining beneficiary access to the life-saving drugs provided under Medicare Part D,” said Chuck Ingoglia, senior vice president of the National Council for Behavioral Health, which is spearheading the group.
“Although we need to remain vigilant on this issue, we commend today’s action by CMS will allow millions of seniors to continue to confidently rely upon Medicare to provide them the drugs they need.”