A federal task force charged 90 people, including 16 doctors, with generating $260 million of false Medicare billings following raids in cities across the country. The arrests mark the seventh notable crackdown by the Medicare Fraud Strike Force, a joint effort of the Justice Department and the Department of Health and Human Services launched in 2007,  See article at The Wall Street Journal.

Raheel Pervez , a pharmacy owner, has been sentenced for his part in a scheme that drained $16 million from the NY Medicaid program.  Pervez will only serve one to three years for his part in a scheme that billed Medicaid for unfilled prescriptions. The pharmacies were ordered to pay $16.7 million in restitution to Medicaid and Pervez has agreed to pay $500,000 in civil forfeiture.

His father Mujahid "Peter" Pervez controlled the three indicted pharmacies but fled to Pakistan.  Pervez’s father had previously been excluded from participating in the Medicaid program because of a fraud conviction.  Five other people were arrested in connection with the crime.

Kaiser Health News had an article about the new requirement in ObamaCare that requires Medicare to cover a screening for cognitive impairment during an annual wellness visit.  Dementia screening tests are typically short questionnaires that assess such things as memory, attention and language and/or visuospatial skills. One of the most common, the mini-mental state examination, consists of 30 questions (such as “What month is this?” and “What country are we in?”) and may be completed in about 10 minutes.  Seniors may want to consider having an evaluation for cognitive impairment as part of their annual wellness visit with their health provider. It is covered with no out-of-pocket charge.

“The risk of dementia increases with age: its prevalence is 5 percent in people aged 71 to 79, rising to 37 percent of those older than 90. Mild cognitive impairment has many definitions, but the term generally refers to people whose impairment isn’t severe enough to hamper their ability to manage their daily lives. By some estimates up to 42 percent of people older than 65 have it.”

Alzheimer’s is the most common form of dementia, accounting for up to 80 percent of cases. Other types include vascular dementia, many cases of Parkinson’s disease and Huntington’s disease. The drugs that are available are most effective in the early stages of the disease.

Improper Medicare payments cost about $50 billion last year, a Health and Human Services official told a House panel, testimony that prompted a rare display of bipartisanship in a usually divided House.  In 2013, the government recovered $4.3 billion from people trying to defraud the government, and has recovered $19.2 billion over the past five years — about $10 billion more than the previous five years.  See full article at USA Today.  The traditional Medicare fee-for-service program lost $36 billion, while Medicare Advantage lost $11.8 billion. Improper payments in the fee-for-service program made up 10% of all payments in 2013, up for 8.5% in 2012, she said.

“Every dollar lost to Medicare fraud is a dollar stolen from America’s elderly,” said Rep. Kevin Brady, R-Texas, chairman of the House Ways and Means Subcommittee on Health. “And every dollar lost to improper payments — intentional or not — robs from the solvency of this important program.”

CMS has pilot programs to prevent fraud and has started screening all 1.5 million Medicare suppliers under new requirements. So far, 260,000 providers and suppliers have had their billing privileges deactivated for not responding. Another 17,534 had their billing privileges revoked because they had felony convictions, had incorrect addresses, or did not have proper licensing.

President Obama’s latest budget request seeks $428 million for Medicare fraud-prevention programs, which could yield $13.5 billion in savings for Medicare and Medicaid over 10 years.  The budget also asks for 17 legislative changes that would provide more tools to fight fraud and help repair vulnerabilities, including expanding a pilot program that makes sure improper payments aren’t made by giving CMS the authority to require prior authorization for fee-for-service items. The Power Mobility Devices Prior Authorization Demonstration has decreased spending by $117 million.



The Pittsburg Post Gazette had an interesting article from Kaiser on how the federal government is trying to lower Medicare spending at hospitals and nursing homes. “Researchers have discovered huge discrepancies in how much is spent on these services in different areas around the country. In Connecticut, Medicare beneficiaries are more than twice as likely to end up in a nursing home as they are in Arizona. Medicare spends $8,800 on each Louisiana patient getting home health care, $5,000 more than it spends on the average New Jersey senior. In Chicago, 1 out of 4 Medicare beneficiaries receives additional services after leaving the hospital — three times the rate in Phoenix.”

Medicare per capita spending on these services, collectively known as post-acute or post-hospital care, has grown at 5 percent a year or faster in 34 of the nation’s 50 most populous hospital markets in recent years.  In 2012, $62 billion — 1 out of every 6 dollars Medicare spent in the traditional fee-for-service program — went to nursing and therapy for patients in rehabilitation facilities, nursing homes, long-term care hospitals and in their own homes, according to a congressional advisory panel.

Many providers earn double-digit profits from Medicare through a hodgepodge of payment methods that experts say promotes disjointed care, wastes taxpayer money and makes fraud easier.  Medicare is experimenting with new payment methods in which hospitals and post-acute providers would be given a lump sum to take care of a patient, forcing them to become more efficient if they want to make money.

The vagueness of the term “post-acute” reflects the wide array of ways Medicare patients can be treated after they leave the hospital. Those robust enough to return home can receive intermittent visits from nurses, physical therapists and aides who monitor their condition and assist in basic tasks. These services are known as home health.

Medicare pays each type of facility different rates — even when they are treating the same kinds of patients.  These varying payment rates were created under the assumption that many sicker patients would need to be in facilities that could provide more intensive care. But researchers have found evidence that the same types of patients can end up in different types of facilities, for no obvious medical reason.

An Institute of Medicine study released in July concluded that post-hospital services are the primary reason that Medicare spends much more in some parts of the nation than elsewhere. Uneven spending on post-acute care around the country accounts for 73 percent of the variation in Medicare spending.

For many companies, these patients translate into substantial profits. Nursing homes are expected to earn between 12 and 14 percent this year on their Medicare patients, MedPAC estimates. Home health margins are expected to average 12 percent, and intensive rehabilitation facilities margins are around 8.5 percent, MedPAC estimates. Long-term care hospitals, the laggard of the post-acute groups in profits, are earning almost 6 percent.

Policy experts say providers tailor their approaches to wring the most money out of Medicare’s payment methods. Nursing homes, for instance, are paid per day, encouraging homes to keep patients for as long as possible up to the 100-day limit Medicare set. Medicare picks up the entire tab for the first 20 days.


The Wall Street Journal: Federal officials plan to release reimbursement information on April 9 or soon after that would show billing data for 880,000 health-care providers treating patients in the government-run insurance program for elderly and disabled people. It will include how many times the providers carried out a particular service or procedure, whether they carried it out in a medical facility or an office setting, the average amount they charged Medicare for it, the average amount they were paid for it, and the total number of people they treated (Radnofsky, 4/2).


The Medicare News Group warned about a new medicare fraud strategy involving hospice.  Hospice is a palliative care program that gives patients with life-ending illnesses a choice to forgo intensive treatment at the end and focus instead on dying more comfortably.  Up until a decade ago, hospice was primarily used by patients diagnosed with cancer whose stay in the program was relatively short, given the terminal nature of their illness.  Hospice services have grown dramatically in recent years, becoming well-known and widely used.  Over the past decade, Medicare spending on hospice has increased at a staggering average rate of 17 percent per year, totaling $13 billion for just 1.2 million patients in 2010, up from the 513,000 patients it served and $2.9 billion it cost in 2000. Furthermore, Medicare payments to hospice providers are growing disproportionately: since 2000, beneficiaries’ use of hospice services has nearly doubled, while payments to hospice agencies have more than quadrupled, the Medicare Payment Advisory Commission’s (MedPAC) 2012 report found. The impact of hospice’s changing demographic is already visible in Medicare’s payments to agencies. Since 2000, the average hospice payment per beneficiary has increased by 7 percent per year, from $5,653 in 2000 to $11,217 in 2010.

The current structure encourages agencies to push hospice care onto those whom they expect to continue to live in the program for a significant amount of the allowable six months, ensuring a continuous and steady stream of payments to for-profit hospice providers at taxpayers’ expense. Nursing homes may be particularly attractive to hospice workers, because often times the full-time nursing home staff does the bulk of the care-giving work, while hospice receives payment for what are oftentimes very brief care visits.  In 2012, a hospice agency could receive a maximum payment of $25,377 per patient. MedPAC reported that in 2009, more than 12.5 percent of hospices exceeded Medicare’s annual payment cap.




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A settlement of a federal lawsuit in Jimmo v Sebelius will increase the amount of days of care for which an older person could expect to receive Medicare payment for therapy provided in a skilled nursing facility. Maintenance therapy is allowed as a service Medicare will pay for in nursing homes. This means that many older persons who have been discharged from a hospital to a nursing home should expect to get more days of Medicare coverage than before this clarification was made. Typically a minimum of 20 and a maximum of 100 days of Medicare coverage in a nursing home are available.

According to statements by the U.S. Health and Human Services Secretary Kathleen Sebelius at the time of last year’s Jimmo settlement, improvement during therapy has never been necessary to receive Medicare payment for therapy.  On Dec. 13, CMS published revisions to the Medicare Benefit Policy Manual clearly stating such, which became effective Jan. 7.

The CMS written standards now clarify that maintenance, not improvement, can be enough to justify Medicare payment. Section 20.1.2 of the CMS manual now states: “Coverage of skilled nursing care or therapy to perform a maintenance program does not turn on the presence or absence of a patient’s potential for improvement from the nursing care or therapy, but rather on the patient’s need for skilled care.”

CMS has basic requirements for getting Medicare in a nursing home, beginning with the need for a doctor’s order and facility’s certification. The patient generally must be admitted to the nursing home within 30 days, following having spent three midnights being admitted in a hospital.

Because Medicare payment for the provided care has been denied by insurance companies, nursing homes have been reluctant to continue providing therapy with no assurance of payment being available for services.  The insurance companies are the true  villains because of their ongoing denial of Medicare coverage for claims that Sebelius said should have been covered according to federal policy. Families who advocate for the care of their family members need to have higher expectations and be prepared to use the new language of the CMS policy manual to appeal therapy claims that seem to have been wrongfully denied.


Kaiser Health News had an interesting article about Medicare spending.  One out of every five dollars Medicare spends goes to nursing homes, home health services or other post-acute facilities and services. The spending varies greatly between states.

The article contains a chart that breaks down Medicare’s 2011 spending into five broad categories.   Spending has been adjusted for the different wage scales Medicare pays as well as special payments such as for hospitals that teach residents. The spending per Medicare beneficiary has been adjusted to take into account different illness levels among states’ Medicare beneficiaries. The figures include only traditional “fee for service” Medicare spending on beneficiaries age 65 and older. Spending on Medicare managed care plans, also known as Medicare Advantage, is not included.

In South Carolina, 17.25% of Medicare money went to long term care with $9,506.41 spending per capita with 525,501 Medicare beneficiaries.

Senior Housing News reported that Medicare Payment Advisory Commission (MedPAC) is recommending Congress to cut Medicare reimbursements to the nursing home industry in the coming years. The total profit margin for the nursing home industry was 1.8% last year, according to MedPAC.  But looking at freestanding skilled nursing facility Medicare margins, nursing homes had a 13.8% margin in 2012, marking the 13th year of profits above 10%, according to a MedPAC presentation during a Dec. 12-13 Meeting Brief.

MedPAC has long held that Medicare reimbursements should not be used to offset Medicaid underpayments, adding in the December 2013 presentation that “subsidizing Medicaid through Medicare payments is poor policy.”   MedPAC has previously called for rebasing Medicare‘s prospective payment system (PPS) for skilled nursing facilities and reducing reimbursements by 4% in 2016 with additional reductions in subsequent years, and is now renewing that recommendation.