On July 12, the Government Accountability Office (GAO) released a report finding that the federal government’s current electronic health care fraud detection system is inadequate and underused.  Implemented in 2009, federal officials originally projected that the $150 million system would save $21 billion annually, but the GAO found that inadequate system operation prevents it from addressing the up to $90 billion in estimated annual health fraud.  The report notes that the system currently lacks Medicaid data, which officials from the Centers for Medicare & Medicaid Services (CMS) plan to integrate into the system by 2014.  Additionally, the report asserts that CMS is not conducting staff training on schedule for employees needed to operate the system.

From the report:

Like financial institutions, credit card companies, telecommunications firms, and other private sector companies that take steps to protect customers’ accounts, CMS uses information technology to help detect cases of improper claims and payments. For more than a decade, the agency and its contractors have used automated software tools to analyze data from various sources to detect patterns of unusual activities or financial transactions that indicate payments could have been made for fraudulent charges or improper payments. For example, to identify unusual billing patterns and support investigations and prosecutions of cases, analysts and investigators access information about key actions taken to process claims as they are filed and the specific details about claims already paid.

Full report: Additional Actions Needed to Support Program Integrity Efforts at Centers for Medicare and Medicaid Services (PDF | 186 KB) 

Government Accountability Office. (2011). Additional actions needed to support program integrity efforts at Centers for Medicare and Medicaid Services. Willemssen, Joel C.

 

On July 12, the Government Accountability Office (GAO) released a report finding that the federal government’s current electronic health care fraud detection system is inadequate and underused.  Implemented in 2009, federal officials originally projected that the $150 million system would save $21 billion annually, but the GAO found that inadequate system operation prevents it from addressing the up to $90 billion in estimated annual health fraud.  The report notes that the system currently lacks Medicaid data, which officials from the Centers for Medicare & Medicaid Services (CMS) plan to integrate into the system by 2014.  Additionally, the report asserts that CMS is not conducting staff training on schedule for employees needed to operate the system.

From the report:

Like financial institutions, credit card companies, telecommunications firms, and other private sector companies that take steps to protect customers’ accounts, CMS uses information technology to help detect cases of improper claims and payments. For more than a decade, the agency and its contractors have used automated software tools to analyze data from various sources to detect patterns of unusual activities or financial transactions that indicate payments could have been made for fraudulent charges or improper payments. For example, to identify unusual billing patterns and support investigations and prosecutions of cases, analysts and investigators access information about key actions taken to process claims as they are filed and the specific details about claims already paid.

Full report: Additional Actions Needed to Support Program Integrity Efforts at Centers for Medicare and Medicaid Services (PDF | 186 KB) 

Government Accountability Office. (2011). Additional actions needed to support program integrity efforts at Centers for Medicare and Medicaid Services. Willemssen, Joel C.

 

On July 11, the Robert Wood Johnson Foundation (RWJF) published a brief examining state costs under the national health care reform law.  Citing health reform’s health coverage expansion and increased federal financing for formerly state-funded functions, the authors estimate that, between 2014 and 2019, states will spend up to $129 billion less than they would have without reform.  Over the same period, the brief estimates that the law will reduce overall spending on uncompensated care by 12.5 to 25 percent, saving the federal government $39 billion to $78 billion, while saving states $26 to $52 billion.  The authors estimate that states will be responsible for $14 billion in new Medicaid spending to cover the costs of newly eligible Medicaid enrollees.  The report also projects that expanding Medicaid coverage for individuals with mental illnesses will save states up to $22 billion through 2019. 

From the report:

Many observers have tried to estimate the fiscal effects of the Patient Protection and Affordable Care Act (ACA) on states. Various estimates have focused on the state Medicaid costs that will result from increased enrollment. Some have noted the cost effects of various possible state policy choices, such as a state decision to retain increased Medicaid payment rates for certain primary care providers after additional federal funding for that increase ends in 2015. Relatively few have sought to compare both the costs and savings that states could realize under the ACA. Most studies in the latter category have found that, as a whole, states are likely to come out ahead.

Full report: Timely Analysis of Immediate Health Policy Issues (PDF | 458 KB)

Robert Wood Johnson Foundation and The Urban Institute. (2011). Timely analysis of immediate health policy issues. Buettgens, Matthew.

The National Center for Policy Analysis (NCPA) has released a white paper arguing that the federal and state governments could save billions through changes to Medicaid pharmacy benefits management.  The paper promotes increasing the use of generics, negotiating competitive dispensing fees, improving drug utilization controls, and negotiating discounts and reimbursements with drug manufacturers similar to those obtained by private insurers.  The authors also highlight the importance of controlling Medicaid costs in light of the program’s role in expanding health coverage under the national health care reform law.

From the report:

Medicaid is a joint federal-state program that provides medical care to more than 60 million low-income individuals and families.1 Over the next few years, Medicaid enrollment is expected to swell and spending is set to explode.

Drug therapies often substitute for more expensive and less effective surgical treatment and can reduce the need for hospitalization. Americans see their doctors more than 890 million times each year, and two-thirds of office visits to physicians result in prescription drug therapy.12 Even though they appear to provide better value for money than other forms of therapy, drug expenditures are one of the fastest growing components of the Medicaid program.

Full Report: Increasing the Cost-Effectiveness of Medicaid Drug Programs (PDF | 1.72 MB)

National Center for Policy Analysis. (2011). Increasing the cost-effectiveness of Medicaid drug programs.

On May 12, the U.S. Department of Health and Human Services (HHS) released a report projecting that the national health care reform law will save Medicare $120 billion through 2015.  The authors estimate that $55 billion of those savings will be realized through reformed provider reimbursements, designed to reward quality care and efficiency.  HHS projects that an additional $50 billion will be realized through reduced payments to insurance companies while $1.8 billion will come from reductions in fraud and abuse

From the report:

The Centers for Medicare and Medicaid Services (CMS) and the Obama Administration are committed to strengthening Medicare, improving the health of seniors and the quality of the care they receive, and lowering costs.

The Affordable Care Act provides a breadth of new tools to help Medicare beneficiaries and taxpayers. CMS has already implemented a wide array of quality improvements and delivery system efficiencies: providing new preventive benefits, tying payment to quality standards, investing in patient safety, and offering new incentives for providers who deliver high-quality, coordinated care. These reforms lay the foundation for a broad reform of our health care delivery system. At the same time, CMS has also taken a series of actions independent of the health reform law that are aimed at saving money for taxpayers and beneficiaries and improving the quality of care.

Full Report: Strengthening Medicare: Better Health, Better Care, Lower Costs (PDF | 32 KB)

Centers for Medicare and Medicaid. (2011). Strengthening Medicare: better health, better care, lower costs.

 

On March 28, the American Enterprise Institute (AEI) released a report finding that increased use of generic drugs in Medicaid could have saved states and the federal government a combined $329 million in 2009.  The report found that, in 2009, Medicaid paid $1.5 billion for 20 popular brand-name drugs that have generic equivalents.  The authors estimate that opting for those brand-name drugs increased costs by approximately 20 percent.  Noting that the national health care reform law’s Medicaid expansion could add 16 million beneficiaries to the program, the report suggests that the potential for savings through increased use of generics is substantial.

From the report:

The current fiscal crisis facing state and federal budgets is, as a share of GDP, the largest in recent history. Federal deficits combined with aggregate state budget deficits may total over $1.6 trillion in fiscal year 2011. Given these pressures and the added burden of recent health care reform legislation that will add 16 million new enrollees to Medicaid rolls by 2019, there is a clear and obvious need to identify potential savings opportunities to address budget pressures, particularly as they relate to health care spending. While some policymakers have advocated wholesale Medicaid reform, there are also intermediate opportunities for considerable savings within the existing program framework.

Full report: Overspending on Multi‐Source Drugs in Medicaid (PDF | 313.16KB)

American Enterprise Institute.  (2011).  Overspending on multi-source drugs in Medicaid.  Brill, A.