1.     Posting all Medicare and Medicaid claims data online for public access as close to real time as possible. Currently, the financial accounting and health outcomes of Medicaid are incredibly opaque. Posting patient-protected, de-identified claims would reveal billing and practice patterns for all participating providers in both programs, laying bare for all Americans, particularly academic institutions and researchers, the extreme outliers who are likely engaged in fraudulent behavior. Excellent studies such as the Dartmouth Health Atlas show the helpful and even lifesaving information can come from public data. Additionally, transparency would drive quality improvements by shining a spotlight on best practices and providers.   For instance, what percentage of poor women over 50 in Medicaid are getting mammograms? (Only 17% in one state.) What percentage of children are getting well child check ups? (Typically less than 50%.)

 

2.     Stop using Social Security numbers as each senior’s Medicare Beneficiary Identifier. The Federal Trade Commission tells Americans, “Protect your Social Security Number – do not carry it in your wallet or write it on checks.” But on the back of every Medicare card, which includes seniors’ Social Security number it says, “Carry this card with you when you are away from home.” Having this vital information so prominent makes fraud and identity theft much easier for criminals.

 

3.     Fully fund the HHS Office of the Inspector General. Current temporary funding streams under the Medicaid Integrity Program end at the conclusion of FY 2010 so staff reductions via attrition are already underway.  HHS must be given the means necessary to be impactful in combating fraud and abuse.

 

4.     Follow MedPAC’s recommendation and move Medicare to a program where there is risk adjustment and payment for sticking with best practices and professionally recognized standards of care. This incentivizes identification of overpayment and recovery.

 

5.     Expand the Money Follows the Person (MFP) Rebalancing Demonstration.  This program provides support for elderly and disabled persons under Medicaid who whish to live at home rather than institutions. This program removes the emphasis for long-term care away from nursing homes and to home and community-based services.

 

 

7.     Require enhanced coordination of benefits and third party liability identification. California could find huge savings in overall Medicaid costs by simply being more accurate with identifying patients’ primary source of insurance. A sizable minority is actually already covered by private insurance, though Medicaid is footing the bill. One insurer recently analyzed Medi-Cal claims coming through its company and found $250 million in claims to Medicaid when other insurance had been volunteered by both the patient and the provider. This is a 1 percent savings, just on volunteered information. Further attention would undoubtedly yield even greater abuse.

 

8.     Require enhanced use of electronic remittances/electronic fund transfers for accuracy to and from providers. Not only does this save on paper postage, but it increases accuracy and timeliness of payments.

 

9.     Aggressively utilize predictive modeling for payments. These technologies catch outlier billing practices before payments are even made. This moves Medicaid way from the “pay and chase” model that criminals loves.

 

10.Require biometric identification for Medicaid patients to access provider treatment. Texas is currently expanding a pilot program that gives Medicaid recipients a plastic card, encoded with eligibility and identity information required by providers. Beneficiaries scan the card and his/her fingerprint at the doctor’s office. The system compares readers and verifies the person’s identity in seconds. This “smart card” reduces costs, particularly the reduction in mailing paper cards, and protects client information.

 

 

12.            Ensure that providers and suppliers meet government standards, and enforce removal from the system of those who do not.  This is particularly a problem in Medicare, as fraudulent durable medical equipment suppliers claimed more than $1.0 billion in improper payments in just over a year. In addition, it should be ensured that doctors who lose Medicare/Medicaid billing privileges in one particular state must be unable to bill in another.

 

13.            Emulate best practices in billing and anti-fraud efforts from the credit card industry. Fraud programs are most effective when they are composed of measures for prevention, detection and mitigation, which requires a number of efforts in each phase of the point of interaction and the payment lifecycle: from Participant participation (e.g. account opening) through authentication and authorization for a transaction to application of back office analysis and customer service.

 

The necessary component in the Network is a regulatory body (for purposes of this document, this body is called “Healthcare Network Authority” or HNA). For and between all Participants in the Network, the HNA’s mandate would be to administer regulations, define standards, settle financial accounts, arbitrate discrepancies and assess fines and penalties within the legislative framework that places the importance of the Healthcare System above any Participant or groups of Participants.

 

a.      Standards - The Network must be compatible based on open (i.e., non-proprietary) data format, content standards and definitions for Participants. Compatibility must be enforced (e.g. through financial incentives and penalties).

b.      Know Your Customer (and Vendor/Supplier) - Network participation for all Participants is only allowed after initial vetting to ensure proper credentials, soundness and capabilities exist. Ongoing participation is re-assessed both in “real time” and ad-hoc. (For example, a provider’s billing volume and/or billing type does not materially exceed established norms for the provider on a daily, weekly or monthly basis.)

c.       Decentralized Financial Liabilities - Liabilities are “pushed” down to the lowest level of Participant in the system. In the event the instigator is not financially solvent or can not be located, the next higher level above the instigator is liable.

o       In the case of a provider that as a result of exceeding real-time monitoring thresholds causes an alert to the Network, there would be a specific action plan invoked by the Network (e.g. withhold payments until an investigation concludes which may conclude fraud with financial and/or criminal implications). If the provider could not fulfill the penalties, the entity that allowed the provider to participate in the Network would be held responsible. (In the credit card industry, the provider would be akin to a merchant whose participation is allowed by a financial institution. If the merchant is found to be fraudulent in some way and can not fulfill the penalties assessed, the financial institution is held responsible.)

o       In the case of a patient, the next level up may be the employer or perhaps plan administrator or payer.

o       In the case of a secondary Participant, the primary Participant who engaged with the supplier or vendor would be held responsible.

d.      Authenticate and Authorize - Beginning with each point of interaction (or point of service), through to ‘check out’ and ongoing, all Participants in the process must be uniquely identified and authenticated and provisioning of services must be authorized in real time. The intent would be to monitor activity real time and create an electronic audit trail for transaction traceability and potential payment revocability. Real time monitoring allows for the use of fairly simplistic algorithms to full neural networks and could be invoked by specific transaction parameters (i.e. suspected fraud Participant, location, type of service, etc. or a combinations of these). Though this process in envisioned to be real time (such as in the case of the credit card environment, sub second), allowances must be made, however, in life threatening or disaster situations.

e.      Carrots & Sticks - The HNA would use reimbursement rates, pricing, penalties and/or payment terms to incent Participant behavior for not only compliance but to continually enhance and enrich the Network to identify and tackle new forms of fraud, waste, abuse and administrative cost.

f.        Self-Policing but Enforced - The HNA would be the option of last resort to resolve disputes between Participants.