Medicare

To help ensure the integrity of Medicare, the Health Care Financing Administration (HCFA) and its contractors need to develop reliable and sophisticated approaches to identify potentially fraudulent billing practices. It is especially important that they be able to match up third-party billers with the providers they represent so contractors can identify potentially questionable billing patterns and subject these claims to more scrutiny. Although HCFA has various efforts under way to better identify providers' questionable claims and their associated third-party billers, there continue to be gaps in its safeguards. HCFA needs to complete its provider recertification program as soon as possible so that it will have comprehensive information on all Medicare providers and their billers. GAO is also concerned about inherent problems with data reliability.

GAO noted that: (1) third-party billing companies often have access to billing information about multiple health care providers and many of their patients; (2) as a result, unscrupulous operators of such businesses have an opportunity to submit false claims; (3) even when HCFA or its contractors suspect that providers' claims are abusive, they are often unable to tell that the claims were submitted by a third-party biller; (4) this is due to limitations in both the systems for processing electronic claims and the complete lack of identifying information on paper claims; (5) while HCFA has established a process--albeit imperfect--to monitor the source of electronic claims, no such process exists for paper claims; (6) paper claim forms include a section or space to identify the provider but not the biller; (7) an Office of Inspector General (OIG) official who has investigated several cases of Medicare fraud by third-party billing companies told GAO that when billing companies used paper claims, it was difficult for the OIG to identify all providers using a given biller; (8) HCFA has no routine registration process to collect comprehensive information about third-party billers; (9) HCFA has made efforts to obtain information on third-party billers, but it still cannot routinely match a third-party biller with all of the providers it represents; (10) in an attempt to gather updated and comprehensive information about providers, HCFA is drafting a regulation to require providers that enrolled in Medicare before May 1996 to complete the new enrollment form to fill this information gap; (11) providers would also be required to recertify the information on their enrollment form every 3 years; (12) HCFA plans to have the regulation in effect by October 1, 2000, and begin requiring providers to update their enrollment information shortly thereafter; (13) this process involves self-reported data that typically will not be validated or updated by the contractors; (14) to make provider and third-party biller information more accessible to the contractors, HCFA is developing a new automated system to access the provider enrollment database; (15) HCFA intends that the system, known as the Provider Enrollment, Chain and Ownership System will provide a complete history of a Medicare provider based on the information in the provider enrollment application; and (16) initially, HCFA plans to incorporate currently available provider information into the system, and, according to HCFA officials, will include updated information from all providers in the future.