GAO finds invalid addresses, disciplinary problems among providers signed up to bill Medicare

Despite CMS' efforts to overhaul Medicare's enrollment system, the Government Accountability Office says significant screening problems persist among the 1.8 million providers enrolled to bill Medicare, including 23,400 potentially invalid addresses, according to the GAO's recent report.

Since the enactment of the Affordable Care Act in 2010, CMS has aimed efforts at tightening up its Medicare enrollment system to better verify provider information, such as licensure and addresses. As a result, CMS has revoked the enrollment of more than 34,000 providers since February 2011.

However, the GAO's recent probe into Medicare's screening system found an estimated 23,400 addresses — or 2.3 percent of Medicare providers — could be invalid. Medicare records listed the addresses of physicians' and other providers' practices as commercial mailbox stores, construction sites and even a fast-food restaurant.

The GAO's report, which covers data through March 2013, suggests the invalid addresses could be the result of data-entry errors. CMS said some of the flagged addresses are not actually fraudulent. For example, the provider who listed the address of the fast-food restaurant had a valid medical office in another location but hadn't billed Medicare between 2005 and 2013, according to the report.

It is not yet clear how much money Medicare paid to providers who listed invalid addresses, but as a whole, CMS estimates it made $44.2 billion in improper overpayments to medical providers in the fiscal year ended Sept. 30, 2014. This figure includes payments to ineligible providers, services that aren't covered, duplicate payments and more.

"Historically, provider enrollment has been a broken process, and it hasn't received enough funding or attention," Ryan Stumphauzer, a former federal prosecutor who specialized in healthcare fraud and current partner at the Miami law firm O'Quinn Stumphauzer & Sloman, told The Wall Street Journal. "That is the first opportunity to keep bad providers out, before they ever submit a fraudulent claim."

The second part of the GAO study identified CMS' screening protocol for violations of state medical board rules that result in the revocation or suspension of physicians' licenses. Such providers are barred from enrolling in Medicare. However, while Medicare verifies physicians' licenses used to enroll in the state in which they currently practice, it doesn't check if a physician was censured by medical boards in other states. The GAO identified 147 cases through March 2013 of physicians who had been censured by medical boards in one state but had continued billing Medicare in a different state.

A Medicare spokesperson told WSJ the agency had retracted 43 of the 147 providers' billing privileges before the GAO report came out, and revoked 19 more as a result of it. The other 85 didn't require any action, because either the providers hadn't billed claims during a suspension period or they had already left the system. Medicare reported 7,383 enrollment revocations since 2011 as a result of its enhanced licensure-monitoring efforts.

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