Save billions by cutting fraud and waste in Medicare and Medicaid

Democrats and Republicans often disagree about how to reform Medicare and Medicaid. But working to prevent bad actors from using these programs to fleece our nation’s most vulnerable citizens is a no-brainer.

Congressional oversight and law enforcement continues to reveal outrageous examples of waste, fraud and abuse in our nation’s two largest health programs: dead doctors writing prescriptions; criminals impersonating seniors at the pharmacy; payments to providers for Medicaid and Medicare services they never perform. These shocking scenarios are sadly reoccurring problems plaguing these programs.

All of this comes with a large price tag. Estimates suggest taxpayers lose more than $60 billion each year to such schemes. And too often, fraud and abuse result in harm to patients as well.

Congress has a duty to address this growing problem quickly. The good news is that Democrats and Republicans agree that the status quo is untenable. Wasting billions of taxpayer dollars while failing to protect our nation’s most vulnerable citizens is unacceptable.

That’s why we’ve come together to introduce bipartisan legislation to address these problems. The Preventing and Reducing Improper Medicare and Medicaid Expenditures Act (PRIME Act) is common-sense legislation that uses 21st century technology and proven solutions to address the vulnerabilities within both Medicare and Medicaid.

First, the PRIME Act takes key steps to move beyond the so-called “pay and chase” policy in Medicare and Medicaid. Today, all too often, officials pay the medical bills first - even questionable ones - and then try to track down the inevitable errors and fraud later. PRIME establishes new requirements so that cutting-edge data systems can more effectively screen and detect errors and fraud before payments go out the door.

Our bill also makes it more difficult for bad actors to misuse doctors’ identities to inappropriately prescribe drugs, including controlled substances, by requiring the Medicare prescription drug program to verify the prescriber’s legitimacy before paying for the medication. In 2007 alone, $1.2 billion in Medicare prescription drug claims contained prescriber identifier numbers that were not valid.

The PRIME Act also makes it a crime to fraudulently buy, sell or distribute Medicare and Medicaid patient information, specifically beneficiary identification numbers. Furthermore, our legislation encourages information sharing between federally administered Medicare and state-administered Medicaid to prevent fraudulent activity in both programs.

Medicare fraud affects millions of seniors each year, and PRIME calls for actively engaging the very patients that rely on Medicare to help fight it. Today, a team of volunteers and staff, the Senior Medicare Patrol, help Medicare patients report instances of suspicious or wasteful practices in the program. The PRIME Act would build on this program by better engaging and incentivizing those enrolled in both Medicare and Medicaid to find and report suspicious charges or practices, creating a stronger front-line defense against fraud and abuse.

On the business side, the PRIME Act takes steps toward holding contractors more accountable and harnessing basic business incentives to reduce errors. Unfortunately, even though today we have systems to catch mistakes after the first offense, officials aren’t doing a good job of making sure the same mistake isn’t made again. Last year, the Medicare “fee-for-service” program made almost $30 billion in improper payments, a startling 8.5 percent error rate.

Currently, the government contractors who handle the billions of annual Medicare claims get paid the same amount regardless of their level of accuracy. PRIME makes sure these companies have skin in the game when it comes to reducing errors and fraud by ensuring that the government’s contracts are based in part on contractors’ level of accuracy.

In recent years, we’ve made progress in curbing waste, fraud and abuse in Medicare and Medicaid, but more remains to be done. Threats to these programs are constantly evolving, and weaknesses still remain, costing taxpayers billions and jeopardizing critical care.

There is no single strategy to adopt that will eliminate fraud and abuse, but PRIME represents a bipartisan consensus on some of the most common-sense ways to move forward on fraud prevention in both Medicare and Medicaid. Our legislation is supported by groups as diverse as AARP to Citizens Against Government Waste to the Center for American Progress, all of whom recognize the urgent need to prevent further loss to these programs.

In a time of budget cuts and steep debt, we owe it to American taxpayers to ensure that their money is being spent carefully. We know our colleagues recognize the need for action, too, and we hope they will join us in moving quickly to adopt our bipartisan legislation.