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OIG focuses on Medicare fraud, CMS vulnerabilities in report

By Jennifer Bresnick

In its latest semi-annual report to Congress, the Office of the Inspector General (OIG) details its healthcare fraud prevention activities and a continuing focus on eliminating waste, inefficiencies, and improper conduct within the federal healthcare system.  Covering the period from October 2013 to March 2014, the report reiterates previous concerns about the integrity of EHR systems and the operations of Medicare Administrative Contractors.

Medicare and prescription fraud

OIG uncovered some of the biggest Medicare and pharmaceutical fraud schemes yet, the report states, including a $71 million false claims racket run by three medical clinics in New York.  Irina Shelikhova was convicted of submitting false claims for phony services, giving financial kickbacks for receiving unnecessary treatments, and hiring an unlicensed co-conspirator to act as a physician, forging notes and prescriptions while rendering fake care.

Additionally, in one of the largest settlements in the nation’s history, Johnson & Johnson agreed to pay more than $2.2 billion for promoting certain medications for uses unapproved by the FDA, allegedly providing financial incentives for physicians to use the drugs and encouraging sales representatives to promote the medications for unapproved uses.

CMS oversight of Medicare Administrative Contractors (MACs)

Medicare Administrative Contractors have come under fire repeatedly for poor oversight of potential fraud and abuse, and the OIG has used the past year to crack down on the organizations.

“Given the billions of dollars awarded to MACs and the critical role they play in administering the Medicare program, effective oversight of MACs’ performance is important to ensure that they are adequately processing claims and performing other assigned tasks,” the report says. “We found that they did not meet one-quarter of the quality assurance standards reviewed and MACs had not resolved issues with 27 percent of these unmet standards as of June 2012.”

More than half of Part D sponsors did not voluntarily report data on fraud and abuse, the OIG found, and CMS rarely used data collected by Medicare Advantage organizations to follow up on oversight activities.

EHR vulnerabilities and safeguards

In January, the OIG released a report citing flaws in EHR systems that may lead to an increase in Medicare fraud, and called on CMS to update its guidelines and oversight programs to address some of the critical vulnerabilities inherent in the spreading use of health IT systems.

“Findings included that only about one quarter of hospitals had policies on the use of the copy-paste feature in EHR technology, which, if used improperly, could pose a fraud vulnerability,” the report notes.  “Although EHR technology may make it easier to commit fraud, CMS and its contractors have not adjusted their practices for identifying and investigating fraud in EHRs. Few contractors reviewed EHRs differently from paper medical records. CMS had provided limited guidance to Medicare contractors on EHR fraud vulnerabilities.”

The report also points out that state Medicaid information systems are vulnerable to data breaches and unauthorized access.  The vulnerabilities are furthered by a lack of formalized data management guidelines and security procedures.

 

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