Medicaid Fraud and Abuse

The Office of Inspector General (OIG) at the Department of Health and Human Services has excluded thousands of providers from participating in federal health care programs because of health care fraud, abuse, or quality-of-care problems. Weaknesses in the exclusion process, however, allow many unacceptable providers to remain on the rolls of federal health programs. These shortcomings include a lack of controls at OIG field offices to ensure that all state referrals are reviewed and acted on promptly, inconsistencies among OIG field offices as to the criteria for excluding providers, lack of oversight to ensure that states make appropriate exclusion referrals to the OIG, and problems that states experience in trying to identify and remove from their programs providers that appear on the OIG's exclusion list. These weaknesses place the health and safety of beneficiaries at risk and compromise the financial integrity of Medicaid, Medicare, and other federal health programs. OIG officials attribute many of these problems to repeated cutbacks in resources during the past several years. Recent legislation, however, addresses this concern by providing the OIG with extra funding, specifically for dealing with health care fraud. Officials said that some of this funding will be used to hire additional staff to process exclusion referrals. The legislation also includes tools and resources to facilitate the identification of unacceptable providers. These tools include a system of unique billing numbers for health care providers and an adverse action data bank, which will record information on any action taken against a health care provider.

GAO noted that: (1) over the years, the OIG, working with state agencies, has excluded thousands of providers from participating in federal health care programs because of health care fraud, abuse, or quality-of-care problems, thus helping to protect the financial integrity of those programs and decreasing the likelihood that program beneficiaries receive substandard care; (2) several weaknesses in this exclusion process allow many unacceptable providers to remain on the rolls of federal health programs; (3) the weaknesses GAO identified include: (a) lack of controls at OIG field offices to ensure that all state referrals received are reviewed and acted on promptly; (b) inconsistencies among OIG field offices as to the criteria for excluding providers; (c) lack of oversight to ensure that states make appropriate exclusion referrals to the OIG; and (d) problems states experience in attempting to identify and remove from their programs providers that appear on the OIG's exclusion list; (4) these weaknesses place the health and safety of beneficiaries at risk and compromise the financial integrity of Medicaid; (5) moreover, difficulties states experienced in using OIG exclusion data allowed some providers to continue to be enrolled in a state Medicaid program after they had been excluded nationwide by the OIG; (6) OIG officials attributed many of these problems to repeated cutbacks in resources occurring in the past several years; (7) the Health Insurance Portability and Accountability Act of 1996, however, addresses this concern by providing the OIG with extra funding, specifically for dealing with health care fraud; (8) some of this funding, officials said, will be used to hire additional staff to process exclusion referrals; (9) the act also includes tools and resources to facilitate identifying unacceptable providers; (10) these tools include a system of unique billing numbers for health care providers, to be developed to reduce the potential for inappropriate payments, and an adverse action data bank, to be established to record information on any adverse action taken against a health care provider; (11) when implemented, these tools should help to limit the number of providers excluded from one program that continue to participate in others; (12) in the interim, the HHS Inspector General has initiated actions to improve the effectiveness of the exclusion process; and (13) while these efforts are significant, GAO believes further refinements are necessary to improve the exclusion process.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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