What makes news is often confounding. Report after report comes out revealing as much as $140 billion in overpayments each year to insurers offering Medicare Advantage plans, eating into the Medicare Trust Fund and driving up Medicare premiums. Still, the New York Times focuses on $2 billion in fraudulent claims for catheters in Traditional Medicare without placing it in the context of a projected $1.56 billion in waste and fraud in Medicare Advantage through 2033. Of course, $2 billion isn’t chump change, and catheter fraud is a new and perhaps more colorful story.
No question there’s Medicare fraud. The only question is how and when it is detected and addressed. It seems that when the Centers for Medicare and Medicaid Services (CMS), which oversees Medicare, is dealing with relatively small durable medical equipment companies in Traditional Medicare, it is better able to address a fraud than when it is dealing with gigantic health insurers in Medicare Advantage. In other words, watch out for bad actors in Medicare Advantage that could keep you from getting critical care because the government isn’t watching out for you.
What’s particularly striking about the catheter story is that it does not focus on the Medicare carrier that processes Medicare claims. How could the Medicare carrier possibly have paid out $12,000 for 2,000 urinary catheters to one Medicare enrollee? Why wasn’t there a red flag in its computer system?
The catheter story also doesn’t highlight that the reason we know about this fraud is that the data is accessible for analysis, unlike Medicare Advantage data, which tends to be incomplete, inaccurate, if available at all, and untimely.
What happened in the case of the catheter fraud? Seven suppliers of these catheters billed the Medicare accounts of 450,000 people enrolled in Traditional Medicare $2 billion for urinary catheters in 2022-2023. Not one of these 450,000 people received these catheters. It turns out that six of the seven companies did not have a working phone number.
What is CMS doing about these fraudulent bills? Curiously, it has the ability to withhold payments to companies suspected of fraud until it determines whether the bills are legitimate or not. Of note, CMS is either unable to use this authority with insurers offering Medicare Advantage plans when they are suspected of fraud or unwilling to.
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