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HHS Inspector General Reiterates Commitment to Combating Healthcare Fraud, Highlights Areas of Focus

Posted  April 23, 2024

Last week, Christi Grimm, the Inspector General of the U.S. Department of Health and Human Services (HHS), testified before the House Subcommittee on Oversight and Investigations.  The subcommittee hearing, aptly titled “Examining How Improper Payments Cost Taxpayers Billions and Weaken Medicare and Medicaid,” focused on recent efforts to combat healthcare fraud and overpayments.

In her written testimony, IG Grimm began by reiterating her office’s commitment to rooting out healthcare fraud, which harms patients and costs U.S. taxpayers billions: “HHS-OIG’s nearly 1,600 dedicated professionals are laser focused on preventing and detecting fraud, waste, and abuse and on promoting the economy, efficiency, and effectiveness of HHS programs.”

IG Grimm’s testimony then shined a spotlight on Medicare Advantage / Medicare Managed Care Plans, an area where fraud and improper payments are rampant.  “Annual expenditures for Medicare Advantage grew from $147 billion in 2013 to $450 billion in 2023.  Preventing and detecting improper payments in Medicare Advantage–whether those payments result from fraud, waste, or abuse–has become a top priority for HHS-OIG.”  Two areas relating to Medicare Advantage IG Grimm emphasized were (1) Risk Adjusted Payments; and (2) Durable Medical Equipment (DME) Fraud.

  • Risk Adjustment Payments: “One troubling concern is the potential for plans to game risk adjustment by overstating how sick enrollees are so the plans can receive higher payments than they should.”
  • Durable Medical Equipment (DME) Fraud: DME fraud “persisted in traditional Medicare for decades and is growing in Medicare managed care.” “DME suppliers are submitting fraudulent bills to managed care plans, driving up costs for the plans and American taxpayers, too.”

IG Grimm also noted the knock-on effects of fraud when payments are based on historic costs: “Plans may incur losses if they pay the fraudulent DME supplier.  Losses, however, are not limited to Medicare Advantage plans.  Ultimately, fraud against plans costs taxpayers through higher capitated rates (fixed monthly payments per enrollee) in the future.  Because capitated payment rates are set, in part, based on historical costs, if plans’ costs are inflated by fraudulent billings, these increased costs may be passed along to the Medicare Advantage program through future, higher capitated payments.”

IG Grimm requested additional funding to strengthen efforts to deter and prosecute fraud, waste, and abuse in the healthcare system, and made particular note of how such increased funding could be used to protect nursing home residents:

“With adequate … resources, we could conduct urgently needed oversight to better ensure that the Government and taxpayers are getting what they are paying for.  …  Top priorities of mine include: combating fraud; identifying wasteful spending; and improving managed care, nursing homes, home- and community-based services, and drug affordability.  …  OIG could increase its efforts to protect nursing home residents and hold perpetrators accountable for abuse and neglect of residents including, as appropriate, criminal investigations and fraud enforcement for providing worthless services to nursing home residents.”

While the government’s goal to root out healthcare fraud is laudable, it is most effective when supplemented by whistleblowers, who, pursuant to whistleblower reward programs, often come forward with inside information to hold fraudsters accountable.  For years, this public-private partnership has protected patients and US taxpayer dollars.  As healthcare expenditures continue to grow and fraudulent schemes become increasingly complex, the key role whistleblowers play is more crucial than ever.

If you have information relating to potential healthcare fraud, fraud in managed care programs, risk adjustment fraud, or DME fraud, and would like to speak to an experienced member of the Constantine Cannon whistleblower lawyer team, please don’t hesitate to contact us for a free and confidential consultation.