New federal rules are attempt to curb fraud

New federal rules that begin March 25 aim to curb Medicare and Medicaid fraud from the get-go and better police businesses with questionable practices.

Through provisions of federal health reforms, the Centers for Medicare & Medicaid, part of the Department of Health and Human Services, will:

• Classify types of health care businesses as low, moderate and high risk for fraud. Medical equipment supply companies and home health care agencies will be considered at highest risk because of past fraud problems involving those industries. People owning 5% or more of such a business will need to be fingerprinted so their background can be checked more thoroughly.

• Consider health care providers dropped from Medicare and Medicaid programs because of questionable activities to be high risk, regardless of their specialty. The providers will be required to undergo security checks and fingerprinting.

• Prohibit providers terminated from programs in one state from moving elsewhere and billing the programs in another state.

• Conduct unannounced site visits and suspend payments when there are credible fraud allegations.

• Be able to suspend new Medicare applications by providers in areas of health care where suspicious, increasing problems exist.

"We really believe that the combination of our increased screening before people get into the program and the scrutiny they will get once they are in the program ... will improve" prosecution of Medicare and Medicaid fraud, said Peter Budetti, head of the Center for Program Integrity at the federal agency.

Budetti said the new tools address concerns that the federal government does too much pay-and-chase to catch wrongdoing after it's done, not at the time it's planned.

"This is a major shift," he said. Pay-and-chase strategies work with existing providers with established billing records but "when dealing with new threats to the program from scam artists, people doing downright illegal activities, pay-and-chase can't work,'' he said.

"Most of the time the money is gone. That's why the only real solution is to prevent these problems and keep the bad guys out."