1998.09.15: Medicare Moves to Hire Special Fraud Fighting Contractors

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FOR IMMEDIATE RELEASE
Tuesday, Sept. 15, 1998
Contact:  HCFA Press Office  (202) 690-6145

MEDICARE MOVES TO HIRE SPECIAL FRAUD FIGHTING CONTRACTORS

For the first time, Medicare is seeking special, outside contractors to carry out audits, conduct medical reviews and conduct programs that will expand the Clinton Administration's fight against waste, fraud and abuse.

The Health Care Financing Administration will release a Request for Proposals this week for Program Safeguard Contractors who will work with the Medicare Integrity Program to end criminal activities by fraudulent health care providers, ensure that Medicare pays only for medically necessary services, and identify honest errors that lead to improper payments.

Previously, only insurance companies whose primary responsibility is processing Medicare claims could conduct audits, medical reviews and other activities that prevent improper payments and attack waste, fraud and abuse. Under new authority in the Health Insurance Portability and Accountability Act, Medicare can now competitively award contracts to firms who demonstrate their capability to undertake specific activities such as:

medical reviews, to ensure that services billed to Medicare were medically necessary;
cost report audits, to ensure that Medicare pays only for services and overhead costs for which it is legally supposed to pay; and
benefit integrity activities to respond to complaints and develop cases for referral to law enforcement agencies.

"These special contractors will help us fight fraud and save taxpayer money by continuing to take action against scam artists disguising themselves as health care providers," said HHS Secretary Donna E. Shalala. "This administration has focused unprecedented resources on the fight to save beneficiaries and taxpayers billions of dollars and we have had unprecedented success. This will be another important tool to advance our efforts."

"These special Program Safeguard Contractors add an important new weapon to Medicare's program integrity arsenal," said Nancy-Ann Min DeParle, administrator of HCFA. "They will help ensure Medicare pays appropriately for covered services to eligible beneficiaries."

Medicare alone saved more than $7.5 billion through anti-fraud waste and abuse efforts in fiscal 1997, and with its law enforcement partners, returned another $1 billion to the Medicare trust fund. Efforts of the highly successful Operation Restore Trust anti-fraud program identified $23 in money owed back to the trust fund for every $1 spent on fraud detection and recoveries. Lessons learned in that project are now being applied nationwide.

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