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Why are dead doctors allowed to `practice'?

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rpautrey2

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Sep 8, 2008, 2:23:36 PM9/8/08
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Posted on Thu, Sep. 04, 2008
Why are dead doctors allowed to `practice'?
BY MALCOLM SPARROW


In July, the Senate Permanent Subcommittee on Investigations revealed
Medicare's latest embarrassment: significant payments for medical
services ordered by dead doctors -- $60 million to $92 million such
claims paid between 2000 and 2007. Some doctors had been dead for more
than 10 years.

Dead doctors are not the first to embarrass Medicare, which also has
paid millions of dollars in treatments for dead patients, many of whom
apparently start new treatments months or years after death.
Deportees, previously banished from the country, and prisoners (who
receive healthcare through other systems) also show up, when they
obviously should not, in Medicare's paid claims.

For the ''dead doctors'' problem, the Office of Inspector General for
Health and Humand Services proposes the same formulaic approach used
for every other category of obviously bogus claims: They say that the
Center for Medicare & Medicaid Services (CMS) should obtain timely and
accurate data regarding deaths, deportations and imprisonment from
other relevant agencies, and then implement system-edits so that their
computers can auto-reject bad claims.

It's a crime

This approach treats the payment of bogus claims as a claims-
processing problem, rather than a crime problem. Medicare officials
seem to grasp that these claims should not be paid; but they rarely
ask how such nonsensical claims come to be generated in the first
place. The businesses that produce such claims are not error-prone;
they are fraudulent.

Meet Billy, the crook. His goal is to steal as much as he can, as fast
as possible. Billy pays a nominal fee to sign up as a Medicare
provider or infiltrates a billing service that submits claims for
others. To bill Medicare, Billy doesn't need to see any patients. He
only needs a computer, some billing software to help match diagnoses
to procedures and some lists. He buys on the black market lists of
Medicare patient IDs. If he wants to bill for services that require a
prescription or authorization, he also buys lists of physician numbers
to put on the claims. Billy is vulnerable because his lists are not
entirely ''clean.'' They contain just a few cases, probably no more
than one in a hundred, of doctors or patients who are dead, deported
or incarcerated. And Billy doesn't know that. In fact, he would pay a
lot, at this point, to know which patients' and doctors' numbers to
avoid.

What does the proposed response from Medicare mean for Billy? If CMS
perfects its prepayment edits and operates them as recommended, then
Billy will receive computer-generated auto-rejection notices for the
small fraction of his claims that are obviously implausible:
``Medicare rejected this claim because, according to government
records, this patient died prior to the date of service.''

The other 99 percent of Billy's claims, not involving detectable
aberrances, will all be paid. From Billy's viewpoint, life is good.
Medicare helps him ''scrub'' his lists, making his fake billing scam
less detectable over time; and pays all his other claims without
becoming the least bit suspicious. The OIG recommends, too, that CMS
''educate providers'' about the importance of using valid physician
numbers. Billy will be a diligent student.

Rather than processing errors to be corrected these claims represent
detection opportunities for massive fake billing scams. How large
might these scams be? That depends how many doctors on the average
list of Medicare providers are, in fact, dead. If that number is only
1 percent, then the billing scams are probably 100 times the size of
the ''dead doctor'' claims the scams will generate.

The anomalies, now troubling Congress, amount to millions, but
represent the tip of scams that cost Medicare billions. Whenever a
provider submits claims for treatment of, or by, the dead, there is
almost no chance that their other claims -- submitted in the names of
the living -- are any better.

Attack the root

It is time for Medicare to wake up to the true nature of these
threats, and the true nature of the fraud control task. For obviously
implausible claims, auto-rejection is a feeble response. How about
surveillance leading to arrests; or dawn raids? Seize the computers
and the records; do whatever it takes to expose the business practices
that produce such fictions. Those responsible for the integrity of
Medicare need to understand one fundamental truth of the fraud control
business: Fraud works best when claims processing works perfectly. It
is time to shift the focus from process-improvement to crime-control.

Malcolm K. Sparrow is professor of public management at the John F.
Kennedy School of Government, Harvard University.

--------------------------------------------------------------------------------

© 2008 Miami Herald Media Company
http://www.miamiherald.com
http://www.miamiherald.com/opinion/other-views/story/671760.html

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