MEDICARE Experts say drug plan is open to fraud

Eight private companies will police the program.
KNIGHT RIDDER NEWSPAPERS
WASHINGTON -- Medicare's plan to fight fraud in its new prescription drug benefit is drawing skepticism from experts who say the benefit is too complex to monitor properly and leaves too much discretion to the industries that have fleeced government health programs in the past.
With taxpayers and Congress still fuming about the drug benefit's 10-year $720 billion cost, Medicare officials can ill-afford to let the program cost spiral because of fraud by doctors, pharmacies, drug companies, drug plans and the firms that administer them.
Medicare has identified 33 types of financial fraud that are possible in the program.
Simple or hard
Some are as simple as over-reporting the number of prescriptions filled or billing for brand-name drugs when generics are dispensed.
Others are harder to detect, such as fraudulently inflating drug prices and soliciting or receiving a kickback, bribe or rebate in exchange for prescribing certain drugs or including them for coverage by drug plans.
In the past, these kinds of schemes have bilked billions of dollars from such federal health programs as Medicaid and Medicare, forcing cuts in services and increasing costs for patients.
On Friday, Medicare announced that eight private companies will have the primary task of policing the drug program.
The companies will review claims, analyze data and conduct other evaluations to spot unusual billing patterns that might indicate fraud. They'll work with Medicare officials and the Department of Health and Human Services' Office of Inspector General, which also will monitor the program.
But hiring contractors to fight fraud can lessen interest in enforcement within the agency, said Barbara Rowland, assistant U.S. attorney for the Eastern District of Pennsylvania.
One problem
Rowland, who has investigated numerous fraud cases against government health plans, said private companies are less likely to view violations as criminal matters.
"While we might look at something from a fraud perspective, when you've got an intermediary, they may be looking at it from a 'let's recover the money' perspective. Or 'let's get these people back on the road [in] that they're providing the right documentation and putting the right numbers in the right forms,'" Rowland said. "And we're talking about taking away people's ability to do business with the government and referring [violations] to the criminal division."
But Medicare Administrator Mark McClellan remains confident.
"I do not expect fraud to be at all common in the Medicare drug benefit," McClellan said. "One reason I'm confident about that is because of the strong and collaborative programs that we have in place to prevent it and take action quickly if it occurs."