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HHS FY 2015 budget to reduce Medicare-Medicaid fraud, waste

By Kyle Murphy, PhD

The Department of Health & Human Services has release its budget for fiscal year 2015, which the department claims is both “fiscally responsible” and aims to strengthen its two most important programs — and doing so by reducing healthcare fraud and waste.

“On the mandatory side, we’ll contribute a net $369 billion toward deficit reduction over the next decade,” Secretary Kathleen Sebelius said in a press conference earlier today. “By incentivizing high-quality and efficient care and by continuing to reduce healthcare cost growth, this budget also strengthens two very important programs — Medicare and Medicaid — with $415 million in net savings over the next decade and extends the solvency of the Hospital Insurance Trust Fund by five years.”

According to Sebelius, a major focus of the FY 2015 budget is to control the year-to-year growth of Medicare over the next ten years. “It will reduce the average annual growth in Medicare over the next decade from 6.3 percent to 5.3 percent. What’s more, by expanding competitive bidding for durable medical equipment, it also produces additional savings for Medicare and its beneficiaries alike,” she added.

An important part of these cost-reduction efforts highlighted in today’s press conference and budget was the work of Health Care Fraud and Abuse Control Program (HCFAC), whose investment is apparently paying off.

“[The budget] invests $428 million in HCFAC and the Medicare Integrity Program, both of which are proven to deliver results in fighting fraud. Every dollar we invest in HCFAC, for example, returns $8.10 of the money we recover. We’ve now announced recovering a record-breaking $4.3 billion,” she explained.

The budget indicates that preventing fraud and reducing improper payments are “top priorities” for the current administration. The investments in HCFAC and Medicaid program integrity funds are expected to yield $13.5 billion in gross savings for Medicare and Medicaid over the next decade.

The budget is also proposing the introduction of new tools via legislative action to increase program integrity oversight. For the Medicare program, these include:

• Allowing prior authorization for Medicare fee-for-service items;

• Allowing civil monetary penalties for providers and suppliers who fail to update enrollment records;

• Allowing the Secretary to create a system to validate practitioners’ orders for high-risk items and services;

• Increasing scrutiny of providers using higher-risk banking arrangements to receive Medicare payments

• Retaining a percentage of incentive reward payment recoveries

For Medicaid, the following proposal are being made:

• Increasing investment in and expanding authority of the Medicaid Integrity Program;

• Supporting Medicaid Fraud Control Unites for the territories;

• Expanding Medicaid Fraud Control Unit review to additional care settings;

• Tracking high prescribers and utilizers of prescription drugs in Medicaid;

• Consolidating redundant error rate measurement programs;

• Preventing use of federal funds to pay state share of Medicaid or CHIP;

• Improving program integrity for Medicaid drug coverage.

Read the complete HHS FY 2015 budget here.

 

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