CMS Takes on Medicare Fraud

In a recent LA Times op-ed, Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz and Deputy Administrator Kimberly Brandt highlighted ongoing efforts to reduce Medicare fraud. This includes a recent “Fraud Takedown” of over 300 defendants who committed an alleged $14.6 billion worth of fraud against the Medicare program. Tackling fraud throughout the government – and especially in Medicare, the second largest program in the federal budget – is an important task that CMS should continue building upon.

In their op-ed, Oz and Brandt discuss Medicare fraud’s global reach. They cite instances where foreign actors create fake companies to falsely enroll Medicare beneficiaries in hospice services; in another example, fraudsters applied unnecessary skin grafts to patients to increase claims. To combat these and other financial threats to the program, CMS recently set up the “Fraud Defense Operations Center,” which will use artificial intelligence (AI) and other measures to identify improper payments and improve program integrity.

CMS’s efforts to reduce waste, fraud, and abuse go further. For example, CMS recently announced that they were more aggressively targeting Medicare Advantage (MA) audits through their Risk Adjustment Data Validation program. This effort aims to reduce the projected $1.2 trillion in MA overpayments over the next ten years.

CMS also announced a new demonstration model, the Wasteful and Inappropriate Service Reduction (WISeR) model, to test using AI to reduce low value care and improve administrative processes. And CMS is working to improve program integrity in Medicaid, announcing that they had identified 2.8 million Americans enrolled in two or more Medicaid, CHIP, or ACA exchange plans. According to CMS, stopping dual enrollment has the potential to save up to $14 billion annually.

The Medicare program is projected to cost $13 trillion over the next decade, with improper payments exceeding $50 billion per year. The Medicare Hospital Insurance (HI) trust fund is only seven years from insolvency. While reducing fraud will certainly not do enough to address Medicare’s cost pressures, the Administration’s efforts to reduce fraud, waste, and abuse are an important step in the right direction. The goals of these program integrity initiatives are encouraging. It is important to ensure they lead to meaningful reductions in improper payments and measurable savings.