Medicare Future Sounds Like Medicare Past

Forbes published an article on December 11, 2019, after interviewing the Administrator of the Centers for Medicare and Medicaid Services (CMS), Seema Verma.  Ms. Verma itemized three focus areas:

  • the lack of healthcare cost and care transparency;
  • the accrued complexity of government healthcare regulations;
  • the legislative impediments to making responsive changes when presented with new circumstances

Ms. Verma has a tough job.  None of what I say below is out of

Seema Verma, CMS Medicare Administrator
Administrator for the Centers for Medicare & Medicaid Services, Seema Verma 2019. Photo Source: Politico

disrespect for her.   Nonetheless, because I have served as an expert witness on some of the largest Medicare fraud cases to date, I cannot help but see these initiatives as more of the same from the past.

One of the centerpieces of CMS’ vision is:

The proposed new rules would ease the compliance burden for healthcare providers, while maintaining safeguards that protect patients and programs from fraud and abuse. When finalized, they could facilitate outcome-based payment arrangements.

That is exactly the way Medicare Part C works today.  Yet, there have been multi $millions in detected fraud cases and likely a much higher amount that goes undetected.  While these plans are well-meaning, it has been easy for dishonest physicians to fraudulently diagnose patients with conditions that enable them to receive a fraudulently high capitated monthly payment, then treat the patient, and then reduce the severity of the diagnosis to receive a bonus payment for getting them well again.  These methods, called ‘risk adjustment’ can be beneficial but they also create multipliers that fraudulent doctors can abuse.

Second, Medicare policies used to determine what is medically necessary (a key determinant for coverage and payment) are inconsistent.  Imagine being able to get a fully covered non-emergency ambulance ride if you are under the influence of hallucinogenic drugs in Colorado, but being ineligible for the same ambulance transportation in Guam unless you are bed-confined due to a much more stringent coverage policy.  In the past ten years, LCDs in different jurisdictions have implemented exactly these types of policies.  The fact is that Local Coverage Determinations (LCDs), according to the HHS OIG are inconsistent and create inequitable access to care according to OIG’s 2014 report.

Third, if one is trying to combat fraud, a consistent set of LCDs needs to be used to apply a uniform Standard to what is medically necessary vs. what is fraudulent.  There are many loopholes that create vague interpretations.  Not that all fraud is proper nor that it cannot at times be detected, but Medicare’s own policies have limited its effectiveness.  Many $billions have been wasted on fraudulent and undetected payments by Medicare.

This should be a non-partisan issue.  These issues are not Obama administration or Trump administration issues, they have been this way for decades across Democratic and Republican administrations.  It is time for a change and some truly new thinking.  Perhaps fixing what we have will be better than creating more and new legislation and policies.

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Michael F. Arrigo

Michael is Managing Partner & CEO of No World Borders, a leading healthcare management and IT consulting firm. He serves as an expert witness in Federal and State Court and was recently ruled as an expert by a 9th Circuit Federal Judge. He serves as a patent expert witness on intellectual property disputes, both as a Technical Expert and a Damages expert. His vision for the firm is to continue acquisition of skills and technology that support the intersection of clinical data and administrative health data where the eligibility for medically necessary care is determined. He leads a team that provides litigation consulting as well as advisory regarding medical coding, medical billing, medical bill review and HIPAA Privacy and Security best practices for healthcare clients, Meaningful Use of Electronic Health Records. He advises legal teams as an expert witness in HIPAA Privacy and Security, medical coding and billing and usual and customary cost of care, the Affordable Care Act and benefits enrollment, white collar crime, False Claims Act, Anti-Kickback, Stark Law, physician compensation, Insurance bad faith, payor-provider disputes, ERISA plan-third-party administrator disputes, third-party liability, and the Medicare Secondary Payer Act (MSPA) MMSEA Section 111 reporting. He uses these skills in disputes regarding the valuation of pharmaceuticals and drug costs and in the review and audit of pain management and opioid prescribers under state Standards and the Controlled Substances Act. He consults to venture capital and private equity firms on mHealth, Cloud Computing in Healthcare, and Software as a Service. He advises ERISA self-insured employers on cost of care and regulations. Arrigo was recently retained by the U.S. Department of Justice (DOJ) regarding a significant false claims act investigation. He has provided opinions on over $1 billion in health care claims and due diligence on over $8 billion in healthcare mergers and acquisitions. Education: UC Irvine - Economics and Computer Science, University of Southern California - Business, studies at Stanford Medical School - Biomedical Informatics, studies at Harvard Medical School - Bioethics. Trained in over 10 medical specialties in medical billing and coding. Trained by U.S. Patent and Trademark Office (USPTO) and PTAB Judges on patent statutes, rules and case law (as a non-attorney to better advise clients on Technical and Damages aspects of patent construction and claims). Mr. Arrigo has been interviewed quoted in the Wall Street Journal, New York Times, and National Public Radio, Fortune, KNX 1070 Radio, Kaiser Health News, NBC Television News, The Capitol Forum and other media outlets. See and for more about the company.

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