Medicare Increases Whistleblower Rewards

WASHINGTON (CN) - The Centers for Medicare & Medicaid Services (CMS) is ratcheting up its Incentive Reward Program (IRP) and tightening its provider enrollment requirements in an effort to catch fraudsters and decrease costs, according to a new proposal.

The reward program is part of the Health Insurance Portability and Accountability Act (HIPAA), which has provisions designed to help thwart fraud and abuse of the Medicare program. Fraudulent activities include billing for services never rendered, supplies that were never ordered or activities that may include offering money, goods or free services in exchange for the beneficiary's Medicare ID number, the CMS explained in its proposal.

The program provides incentives for beneficiaries and others to report suspected fraud. Under the act's current reward program, whistleblowers whose tips lead to Medicare sanctions, or disciplinary action, are offered a reward of 10 percent of the overpayments recovered in the case or $1,000, whichever is less.

The CMS's proposal represents a significant increase in the reward, to 15 percent of the final amount collected, applied to the first $66 million, according to the proposed rule.

The CMS also proposes changes in the provider enrollment provisions that, among other things, would allow the denial of enrollment to repeat offenders, and limits ambulance companies' practice of "back-billing" for services provided before enrolling.

The CMS projects the proposed changes will result in a $24.5 million net increase in recoveries from fraud investigations, based on the success of a similar reward program used by the Internal Revenue Service.

"Since the current [incentive reward program] was put into operation in July 1998, only 18 rewards have been paid, for a total of less than $16,000 and amounts collected of less than $3.5 million. In contrast, between 2007 and 2012, the IRS collected almost $1.6 billion and paid approximately $193 million in rewards," the CMS said in its proposed action.

HIPAA was signed into law by President Clinton in 1996.

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