From the U.S. Government Accountability Office, www.gao.gov

Transcript for: Health Care Fraud

Description: Audio interview by GAO staff with Kathleen M. King,
Director, Health Care

Related GAO Work: GAO-16-216: Health Care Fraud: Information on Most
Common Schemes and the Likely Effect of Smart Cards

Released: February 2016


[ Background Music ]

[ Narrator: ] Welcome to GAO's Watchdog Report, your source for news and
information from the U.S. Government Accountability Office. It's
February 2016. Health care fraud is a problem. This is especially true
in Medicare and Medicaid, where fraudsters can hide among the program's
100 million beneficiaries, countless providers, and more than $1
trillion in annual spending. But little is known about the who and how
of these fraud schemes. That's why a team led by Kathleen King, a
director in GAO's Health Care team, recently combed through hundreds of
court records to identify health care fraud schemes. They also
determined if a new technology could help stop fraud. GAO's Eden Savino
sat down with Kathleen to talk about what they found.

[ Eden Savino: ] So now that your team has looked through all of these
court documents, what do we now know about the fraud schemes being
perpetrated in Medicare and Medicaid?

[ Kathleen King: ] Well we learned some really interesting things during
the course of our work that I think no one had ever clearly identified
before. What we learned about fraudulent behavior was that the most
frequent type was billing for services that had not been rendered. And
that was about 42 percent of the fraudulent behavior that resulted in a
conviction or a judgment.

[ Eden Savino: ] And these are not just physicians. These are a variety
of different health care providers?

[ Kathleen King: ] Yes, anyone who's enrolled in a program and is
authorized to bill. It could be physicians, suppliers, hospitals--all
types of health care providers. Let me emphasize that fraud is not just
making a mistake. Fraud is a deliberate attempt to do something that is
wrong that is later determined by a court to be wrong.

[ Eden Savino: ] And in your report it sounds like people could conduct
multiple fraud schemes at once. What does that look like?

[ Kathleen King: ] We found that that was more frequent, I think, than
we might have thought at the start. So, for example, you could have a
fraudulent billing scheme in which you bill for services that were not
provided, and at the same time you also bill for a higher level of
service than the service you provided, which is called up-coding.

[ Eden Savino: ] So you might go in to see your doctor for a head cold,
and he or she might bill for surgery.

[ Kathleen King: ] Well probably not surgery, but they might bill for a
complex medical visit rather than a more rudimentary one.

[ Eden Savino: ] Your report also examines smart cards and whether or
not they could address certain types of health care fraud. Could you
talk a bit about what those cards are and how they could help?

[ Kathleen King: ] Smart cards are probably more familiar to people than
they used to be. If you now have a credit card that has a chip in it,
that's part of what a smart card is. So it has a microprocessor chip in
it that authenticates the card. And there are proposals in health care
to have smart cards for Medicare. And in that, the provider would have a
card that has a chip in it, and the beneficiary would have a card that
has a chip in it. And those cards would authenticate the cards, not
necessarily that that beneficiary was using the correct card, but that
was an authentic Medicare card. Right now Medicare has paper cards that
are issued by Social Security. So they're susceptible to identity theft.

[ Eden Savino: ] So in your report, did you find that having these smart
cards that could authenticate, that they're actually real cards, could
those stop the fraud schemes that you found?

[ Kathleen King: ] We had very interesting findings on that. Because
there are multiple fraud schemes a lot of times, we found that in 2
percent of the cases where there was a scheme that authentication could
stop, smart cards would be really helpful. And in another almost 20
percent of cases, there were multiple schemes involved but a smart card
could be partially helpful in that situation.

[ Eden Savino: ] But it sounds like then smart cards are not the silver
bullet that we're looking for.

[ Kathleen King: ] I don't think there's any one, single answer that
would stop all of the fraud in health care. I think any solutions to
addressing health care fraud have to be multi-pronged. They have to be
both on the agency side, and on the part of the Centers for Medicare and
Medicaid Services to ensure that their providers who enroll are
legitimate and not likely to commit fraudulent behavior; that the
beneficiaries who are enrolled are legitimate; and that the services
provided are those that are actually covered by the program and are
medically necessary. But there also have to be efforts on the law
enforcement side, at the Inspector General's office and in the
Department of Justice, as there are now.

[ Eden Savino: ] It would be nice to know how much money is being lost
to health care fraud and Medicare and Medicaid, but your report notes
that there is no estimate of that amount. Can you talk a bit about why
that is?

[ Kathleen King: ] It would be really nice to know how much fraud there
is in Medicare and in other health care programs. Part of the reason
that we don't have a reliable estimate at this point is because
providers could do things that look legitimate on their face. For
example, they could be properly enrolled in Medicare, and they could
submit a bill or a claim that looks perfectly legitimate. But if it's
for a service that has never been provided or if they bill for a higher
level of service than the one they provided, it's very difficult to tell
that through the claims process.

[ Eden Savino: ] So, finally, for those of us who might be heading to
the doctor's office, what is the bottom line of your report?

[ Kathleen King: ] Take your card with you. Present it to your health
care provider and when you get an explanation of benefits from your
insurer look at it to see if those are the services that were actually
provided to you. And if they aren't, contact your insurer.

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next episode of GAO's Watchdog Report for more from the congressional
watchdog, the U.S. Government Accountability Office.