By ISSAC SMITH
According to a recent report in the Washington Post, a $3 billion fraud involving urinary catheters has caused serious flaws in Medicare, prompting strong calls for reform. Apparently, some companies have been accused of gaming the system by sending fraudulent bills for millions of catheters using patient and doctor information. This is not the first time Medicare has faced such a challenge; fraudsters often target the system, especially in cases involving unnecessary medical equipment. With a budget of nearly $1 trillion, the agency faces significant challenges in dealing with fraudulent claims for durable medical equipment. Leaders at CMS have asked Congress for more resources to strengthen efforts against potential scammers.
Healthcare providers and lawmakers are now pushing for tougher measures to crack down on these companies and increase fraud prevention efforts. The National Association of Accountable Care Organizations (ACOs) has praised CMS for taking steps to address suspicious billing practices related to catheters, underscoring the importance of policy changes to protect against future abuses.
“This is unlike anything we’ve seen before in terms of its scale and scope,” said Clif Gaus of the National Association of Accountable Care Organizations, which played a key role in uncovering and calling attention to the alleged fraud.
Some accountable care organizations (hospital and physician groups) say they could lose more than $1 million if the fraudulent billing problem is not addressed.
In the proposed rule released Friday, CMS stated that an investigation is currently underway, and preliminary steps have been taken in response.
The agency said it had referred the matter to law enforcement, recovered improper Medicare payments, and removed certain suppliers from the Medicare program. Gaus warned that similar plans will emerge in the future. “These scammers have access to patient IDs, provider IDs, and may be using AI to sift through volumes of patient data collected from multiple sources,” Gaus explained.
This is not the first time an important organization has experienced such a breach. The incident marks the second major data breach in 2024, following a previous breach at Change Healthcare. With the march of technology comes blessings and curses.
What Should You Do?
Scammers target Medicare beneficiaries with promises of free medical services, equipment, or gift cards via phone calls, online ads, and text messages. They entice people by offering “no charge” or “free” items after their personal details and Medicare eligibility are confirmed. After obtaining your personal information, scammers can begin billing Medicare monthly for unnecessary urinary catheters, sometimes without sending them.
Typically, these scams begin with fraudulent durable medical equipment (DME) companies contacting beneficiaries, claiming to be affiliated with Medicare. They want to get a Medicare number.
Often, the DME company will find a health care provider, who may not be related to the beneficiary, to sign under the DME authority. Sometimes, they can force their own beneficiary providers to sign up.
The HHS Office of Inspector General (HHS-OIG) urges the public to remain vigilant and report suspicious activity to the HHS-OIG Hotline at 1-800-HHS-TIPS. By reporting tips and complaints, HHS-OIG can investigate and take action against fraud, protecting Medicare beneficiaries and federal health care programs.
What the Future Holds
Medicare catheter fraud has created serious vulnerabilities in the Medicare system, posing potential financial risks to beneficiaries and Accountable Care Organizations (ACOs):
This scam can result in monthly bills for unnecessary catheters that may not have been received. If personal information is compromised, it may be exploited for other fraudulent activities.
Fraudulent billing can raise per capita costs for beneficiaries linked to an ACO, which can reduce the shared savings that the ACO aims to achieve. In addition, these incorrect payments may affect benchmark calculations for future periods.
The Government Accountability Office (GAO) highlighted several key findings in a recent study on CMS vulnerabilities. He suggested that a fingerprint-based criminal background check for high-risk providers who register without them could help catch those who may provide false information during registration.
In addition, the GAO emphasized the importance of revalidating provider enrollments, particularly for high or moderate risk provider types. This will ensure that only eligible providers deliver Medicare services.
After the investigation, CMS will implement new policies or tighten existing ones to prevent future abuses. These may include stricter documentation requirements, more frequent audits, or changes in reimbursement rates for medical bills.
Providers who engage in fraud may face penalties, fines, or exclusion from Medicare and other federal health care programs. For patients, stricter policies may mean changes in the availability or coverage of medical supplies, which could affect patient care and choice.
Over time, these incidents often lead to improvements in Medicare fraud detection systems and policies. However, there may be unintended consequences, such as increased administrative burden for authorized providers or changes in patient access to certain medical products.
The Bottom Line
Patients and healthcare providers are wondering how they can stop Medicare fraud in the future, because it’s a big problem.
Jason Jobes of Norwood Staffing is concerned that smaller ACOs may not have the right tools and expertise to catch fraudsters, which could take a toll on them financially. They suggest that specialized vendors can help these ACOs better manage costs and detect errors, although they can be expensive. Jobes advises ACOs to closely monitor how they use medical codes and compare them to previous years to spot unusual patterns.
There are also concerns that some organizations may turn a blind eye to the risk of fraud associated with Medicare claims. NAACOS, a healthcare group, wants the government to pay more attention to fraud reporting from ACOs and work with Medicare to improve the way it reports suspicious activity.
Jobes also worries that too much regulation could slow down the legitimate claims process and hurt health care providers financially. They think it is very important to strike a balance between preventing fraud and ensuring that providers can properly manage their finances.
NAACOS is also looking into concerns about the use of diabetes supplies and skin grafts, thinking that similar issues could affect other medical products in the future. Let’s see what happens in this age of advanced technology!
Issac Smith is a medical billing and coding, and compliance specialist working for Medcare MSO
