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Massive Medicare fraud sparks calls for investigation

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Reports of tens of billions of dollars in stolen funds from Medicare has sparked calls from lawmakers for an audit and investigation.

The call for an audit comes after the Government Accountability Office reported that in 2022, Medicare issued about $47 billion in improper payments.

“While the total number of enrollments under waivers and flexibilities that were revoked is small, even a limited number of providers could cause significant financial harm if they engage in fraud,” the GAO report said. “For example, in June 2022, a nurse practitioner pleaded guilty to conspiring in a DMEPOS fraud scheme that defrauded Medicare of almost $15 million, and in July 2022, the Department of Justice announced criminal charges against 36 defendants for more than $1.2 billion in alleged fraud that included DMEPOS fraud schemes.”

Sens. Rick Scott R-Fla., Mike Braun, R-Ind., and J.D. Vance, R-Ohio, sent a letter to Gene Dodaro, comptroller for the GAO calling for the audit, saying other groups estimate Medicare fraud is even higher, at about $60 billion each year.

Meanwhile, the lawmakers point out, the agency was only able to reclaim about $1.7 billion of those taxpayer dollars lost to fraud.

“This fraud poses a substantial financial threat to older Americans, undermines our healthcare system’s integrity, and contributes to the nation’s $34 trillion deficit,” the letter said. “In the private sector even a minor level of fraud would lead to an immediate audit of one’s finances. We request that GAO audit the Centers for Medicare and Medicaid Services’ (CMS) internal oversight reforms, such as adopting machine learning and other innovative solutions, to enhance fraud prevention and minimize the significant financial losses currently being experienced.”

Medicare is a very large federal program serving about 65 million Americans, allowing significant fraud schemes to get away with taking billions of dollars.

“Recent investigative reports by The New York Times and The Washington Post highlighted an alleged Medicare fraud scheme uncovered by the National Association of Accountable Care Organizations (NAACOS),” the letter said. “Using federal data, NAACOS found that over two years, 10 companies went from billing just 15 patients for catheters to an astonishing 515,000 patients, marking an increase of 50,000 from the previous year and accounting for an estimated $2.7 billion increase in taxpayer spending.

“This represents approximately 23.7 percent of Medicare’s total medical supply expenditures for the year, leading to the group’s conclusion that a significant portion seems to be related to fraudulent activities,” the letter said.

In another instance, lawmakers pointed out that about $200 million was lost due to COVID testing kit fraud.

“The alarming new fraud data, however, raises questions regarding the extent to which CMS’ safeguards are working to prevent fraud,” the letter said.

A Centers for Medicare & Medicaid Services spokesperson told The Center Square that CMS is “committed to preventing fraud and protecting people with Medicare from falling victim to fraud.”

“It is important to note that any potential fraud figures mentioned may not be accurate,” the spokesperson added. “When any supplier of catheters or any other type of durable medical equipment submits a claim to Medicare for payment, it goes through our system to ensure that it is eligible for payment. Once that process is complete, CMS also checks to ensure that the provider or supplier is not on a suspension list. If a provider or supplier is on a suspension list, then CMS will prevent the payment. This means that even though a claim may publicly show up as paid, the money doesn’t go out the door.”

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