The Cost of Fraud, Physician Payment Reform and In the Works

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I have been watching the dollar signs from the Office of the Inspector General (OIG) about fraudulent Medicare billing and other illegal scams. According to the OIG, it has recovered over $95 billion over the last 10 years . Yes, $95 billion or $9.5 billion a year.

During the first week of 2013 alone, over $41 million was recouped by the OIG. Here is a sample:

Jan. 3: $15.3 million from Florida Sleep Centers for fraudulent billing of Medicare, Tri-Care, Uniformed Services, and Railroad Retiree Medical Care.

Jan. 4: $8 million in North Carolina for Medicare Fraud and indenity theft.
Jan. 4: $320,000 and 37 months in prison for a Peruvian national for Medicare and mail fraud.

Jan. 4: $4.4 million from regional medical centers and cardiac care centers in Ohio.

Jan. 7: $13.2 million in Detroit for Medicare mental health services fraud.

I have been told that these are only crimes of fraudulent Medicare billing and do not touch on larger non Medicare/Medicaid fraud schemes. Michael Sparrow’s book, License to Steal examines the extensive ways fraud exists in our health care system. Read Amazon’s synopsis here:

Physician Quality Reporting , Physician Payment and the Battle in New York

Flying under the radar for the public at least, is the Physician Quality Reporting Program, now Physician Quality Reporting System (PQRS). The following is an excerpt from an article on Medscape:

… most journal articles do not warn that physicians face a 4-figure financial penalty in 2015 if they do not begin participating in a certain Medicare program as soon as possible.
This warning — and the exclamation mark — appeared in an article on the Medicare’s Physician Quality Reporting System (PQRS) that was published online December 28, 2012, in the Journal of the American College of Radiology.

Introduced in 2007, PQRS gives clinicians cash bonuses for telling the Centers for Medicare & Medicaid Services (CMS) how they score on clinical measures such as the percentage of final fluoroscopy reports that document radiation exposure or exposure time or the percentage of adult patients with diabetes whose most recent hemoglobin A1c reading exceeds 9%.

Clinicians choose a handful of measures to report from a menu of several hundred. At least for now, it is pay-for-reporting, not pay-for-performance, which involves meeting certain score thresholds. The average individual bonus in 2010 was $2157.

In 2015, the cash bonuses are replaced by a penalty equal to 1.5% of Medicare charges, which CMS will impose on physicians and other clinicians who do not successfully report quality data for 2013. The article projects that average penalties for radiologists in 2015 will range from $1991 for diagnostic radiologists to $6029 for radiation oncologists. The penalty increases to 2% in 2016 and beyond, hitting radiologists for between $2654 and $8039, depending on their subspecialty…

To read the complete article, click here:

What makes this interesting is what is happening in New York where the city’s public hospitals are trying to tie physician payments to quality performance.

Coming next? A Look at what we know about the benefit package so far, followed by ACA impact on small employers

In the works: An Editorial Advisory Board and space for Guest Columns

About Kathleen

Kathleen O’Connor: 30+ year health care consumer advocate, non-profit executive and author. For more information about Kathleen, please see "About" on the main content bar above.
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One Response to The Cost of Fraud, Physician Payment Reform and In the Works

  1. Luette Semmes says:

    Please change my email to This won’t work for more than a week

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