This is an important gain, and the increased use of electronic claims submission should be encouraged; however, this method also increases the need for more innovative controls to curtail fraud. For example, to avoid detection by this technology, a fraudulent provider may have to ensure that (1) the bills submitted for a patient are for services consistent with other treatments received by the patient, (2) the sequence and timing of the patient’s Medicare bills makes sense, and (3) referring providers listed on claims forms are also billing for that patient’s care. The antifraud system used by PBS allows the carrier with the opportunity to identify fraudulent patterns of billing behavior. Rising Medicare Fraud in Florida Offers Opportunity for Operational Test of Antifraud Technology

Despite efforts to halt rising fraud, information from HCFA, law enforcement agencies, carriers, and health insurance organizations, indicates that Medicare fraud in Florida has mushroomed out of control over the past few years and may be costing taxpayers hundreds of millions of dollars every year. The South Florida area has been a particular target of fraud against Medicare. The workgroup has undertaken the “South Florida Project” to identify specific problems and recommend corrections. If Medicare is to be proactive in detecting and preventing fraud, it must continually modify its systems’ capabilities to keep pace with new fraud schemes and the changing health care environment. As our report discusses, while these systems have some capabilities that may identify potential fraud, including suspending duplicate claims, these systems were primarily designed to process and pay Medicare claims. 4. 5. 6. A recorded menu will provide information on how to obtain these lists.
Why GAO Did This Study

Pursuant to a congressional request, GAO provided information on how the Medicare program detects and prevents fraud, focusing on: (1) the tools Medicare uses, as well as the other available technologies, to combat fraudulent billing; and (2) rising Medicare fraud in south Florida and the actions being taken to mitigate the problem.

What GAO Found

GAO found that: (1) Medicare's controls against fraud have not kept pace with the rising number of claims processed; (2) while electronic claims processing is critical for efficiency, the extreme volume of Medicare claims requires more innovative controls to curtail fraud; (3) existing Medicare controls have inherent limitations in detecting attempted fraud, since they are designed primarily to identify overutilized services; (4) there are new antifraud systems available to private insurers which recognize patterns in paid claims data and identify fraudulent relationships; (5) it is believed that these systems may be cost-beneficial in combatting emerging types of fraud; and (6) south Florida has been victimized by new types of fraud, resulting in the Health Care Financing Administration's (HCFA) formation of an interagency workgroup to identify specific problems and coordinate enforcement actions.