Senate Finance Committee Report on FWA

On May 2, 2012, six members of the Senate Finance Committee issued an open letter to the "health care community" soliciting ideas for "solutions and suggestions for how to better prevent and combat the multi-billion dollar problem of waste, fraud and abuse in the Medicare and Medicaid programs."

In response, NHCAA submitted a 17-page white paper offering several ideas including:

  • Continue to support the implementation of prepayment analytics for Medicare and follow with expansion of this tool to Medicaid.
  • Provide funding for investments in anti-fraud systems to the degree which adequately reflects the enormous expenditures of Medicare and Medicaid.
  • Incentivize private health plans to invest in anti-fraud activities.
  • Cooperation between public and private payers of health care is critical to the success of anti-fraud efforts and should be encouraged and enabled.
  • Best practices in fraud detection and prevention should be shared among public and private payers.
  • Ensure a skilled and sufficient workforce of health care anti-fraud professionals dedicated to safeguarding Medicare and Medicaid.

On January 31, 2013, Senators Orrin Hatch (R-Utah), Max Baucus (D-Mont.), Tom Coburn (R-Okla.), Ron Wyden (D-Ore.), Chuck Grassley (R-Iowa), and Tom Carper (D-Del.) released a report titled "Opportunities To Curb Waste, Fraud and Abuse in Medicare and Medicaid," outlining the recommendations they received from 164 stakeholders in the health care community on ways to improve federal efforts to combat waste, fraud and abuse in the Medicare and Medicaid programs.

The 12-page report identifies five broad themes drawn from the white papers:

  1. Improper payments: Common topics include the use of data analytics (avoiding pay and chase); efforts to identify and reimburse providers for underpayments; requiring prior authorization for high-cost items; linking payments to best practices/results; clarifying payment policies to prevent errors that are mistaken for fraud; and various legislative and policy reforms.
  2. Beneficiary protection: Common topics include the use of "outpatient observation status" by hospitals to avoid RAC scrutiny of claims; concern that over-broad application of the Stark law exception for physician in-office ancillary services compromises patient care by incentivizing overutilization; and provider and patient frustration with payer documentation requirements.
  3. Audit burden: Common topics include the number of audit entities involved; the volume and complexity of payment rules and regulations; whether payment rules are applied consistently and whether audit entities are inappropriately overturning "medical necessity" decisions; audit entities' interactions with providers during the audit process; difficulty communicating with audit entities during the audit process; burden and cost of documentation requirements; and financial burden of payment suspensions and the impact on businesses.
  4. Data management: Common topics include improving data quality and systems to achieve certain objectives; improving data sharing to achieve certain objectives; and protecting sensitive data by limiting access to the Social Security Administration's death file and protecting identifying information by removing SSNs from Medicare cards; safeguarding national identifiers for insurance companies; and creating unique/alternate identifiers for providers and beneficiaries.
  5. Enforcement: Common topics include partnerships and data sharing with law enforcement entities; praise for the Health Care Fraud Prevention and Enforcement Action Teams (HEAT); concerns about the penalties levied against hospitals for excessive readmissions and the potential for pushing back treatment dates; increasing penalties and enforcement for perpetrators of fraud, but not for those who make "honest mistakes;" support for specific legislation that addresses enforcement which encompasses several of the ideas; and increasing enforcement of existing laws, such as the Stark law.

This report represents essentially an overview and categorization of the white papers that were submitted and does not offer recommendations from the Senators or their staff on legislative, policy or administrative "next steps." It states that the "Senators' staff will work with key Committees of jurisdiction, GAO and the HHS-OIG, and interested stakeholders to develop a more detailed and refined list of administrative recommendations and potential legislative actions."

NHCAA appreciates the thoughtful work done by Senate staff on this important project thus far and looks forward to continuing our engagement in this process.