Electronic Health Records

CMS proposes more rewards for Medicare fraud whistleblowers

The Centers for Medicare & Medicaid Services is upping its efforts to suss out Medicare fraud and abuse with a proposed rule to be published in the Federal Register by April 29. The proposed rule seeks to make changes to the Medicare Incentive Reward Program enacted in 1998 that would pay those responsible for reporting instances of Medicare fraud and abuse a portion of the funds recovered. Likewise, changes are proposed that would affect provider enrollment in Medicare.

According to the proposed rule, recent successes detecting Medicare fraud and abuse have paid off significantly and warrant further improvements:

As demonstrated by the sustained record-breaking returns to the federal government that result from private persons filing suit on behalf of the government, fraud reporting by individuals is a proven tool for the government to detect fraud, waste and abuse in the Medicare program. In 2012, the Health Care Fraud and Abuse Control Program had record collections for health care fraud, where collections topped $4 billion.

HIPAA called for the creation of a program by the Secretary of the Department of Health & Human Services (HHS) to encourage individuals to report Medicare fraud or abuses to CMS:

billing for services never rendered

billing for supplies not ordered

exchange of Medicare beneficiary data for money, goods, etc.

The Incentive Reward Program rewards whistleblowers with a portion of the amount of funds recouped. As CMS explains, “The purpose of these provisions is to help protect the Medicare Trust Funds by providing incentives to Medicare beneficiaries and other parties to report suspected conduct. The intent of these provisions is not to provide rewards for ‘simple mistakes’ or unintentional billing errors.”

The proposal would increase the reward paid to whistleblowers “from 10 percent of the overpayments recovered in the case or $1,000, whichever is less, to 15 percent of the final amount collected applied to the first $66,000,000 for the sanctionable conduct.”

CMS believes increased rewards should lead to exposing many more incidences of fraud and the recovery of large sums of money annually:

Based upon the experience under the IRS reward program, the increase in the portion of the amount collected eligible for a reward will likely result in an increase of reporting of sanctionable conduct, which would increase the collection of improper payments by the federal government. There may also be a sentinel effect whereby fraud and errors are reduced by Medicare beneficiaries’ scrutiny of their bills. For these reasons, and as further explained in the Regulatory Impact Analysis of this proposed rule, we tentatively project a net increase in recoveries of $24.5 million per year as a result of our proposed changes to the Incentive Reward Program. Estimated costs of preparing attestations $0.07 million.

Once the proposed rule is published in the Federal Register, the public will have 60 days to submit comments to CMS.

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