Yesterday, the Obama administration released its fiscal year 2011 budget and among the thousands of pages of explaining budget outlays and new programs was a part of the Health and Human Services department budget dedicated to cracking down on waste, fraud, and abuse.
As part of the budget proposal, HHS is seeking to spend more than half a billion dollars in discretionary funds to fight health care fraud, a $250 million increase over last year’s budget. The money would be used to expand initiatives like the Health Care Fraud Prevention and Enforcement Action Team (HEAT), which brings together high-level officials at HHS and the Department of Justice to spot trends and develop new fraud prevention tools. HHS officials said the new funding will also be used to minimize inappropriate payments and target emerging fraud schemes. The agency estimates that its fraud-fighting efforts will net the government nearly $10 billion in savings over the next decade.
But the government isn’t stopping there. HHS also has plans to squeeze even more savings out of Medicare and Medicaid by giving greater scrutiny to the provider enrollment process and the oversight of claims.
So should physicians be concerned? Well, maybe. In the days before the budget was released, I attended a conference on reimbursement in Las Vegas, hosted by the American College of Emergency Physicians. During one of the sessions, Edward R. Gaines, III, a lawyer who specializes in advising physicians on billing, said that the government is definitely stepping up its efforts in audits.
One particular effort that seemed to have physicians on edge was the Recovery Audit Contractor (RAC) program. Under the RAC program, Medicare has contracted with four companies around the country whose job it is to scour Medicare claims for inaccurate payments. The contractors are given incentive payments based on the overpayments and underpayments that they uncover. But while they are tasked with looking for underpayments to physicians as well as overpayments, physicians fear that it’s only overpayments that will be the focus.
Further ratcheting up the level of unease are some of the powers available to the RACs. For example, in certain circumstances, the RACs are able to extrapolate payments going back to October 2007. So instead of paying back the money on a few months of errors on higher-than-appropriate coding, physicians could see their 10% error rate spread over a couple of years of claims. That could get expensive. Government officials say the circumstances in which extrapolation would be applied are limited, but it’s unclear just how limited and that’s bound to make people jumpy.
Until recently the RAC was only a pilot program, so exactly how this auditing system will work is still playing out. But Mr. Gaines advised physicians to keep their eyes open and consider auditing themselves to stay ahead of the RACs.
— Mary Ellen Schneider (on Twitter @MaryEllenNY)