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Bill aims to lessen fraud and mantra

Wed., Feb. 15, 2012

Waste and abuse, waste and abuse.

It’s the chorus to a tune that is sung more or less constantly during debates about government spending: We don’t need to pay for government programs, we just need to eliminate waste and abuse.


And yet, somehow, the solution is rarely to actually target waste and abuse. It’s usually an excuse to go after the very thing that’s being wasted and abused. Or to suggest that all legitimate recipients of a program – whether it’s unemployment benefits or Medicare – are somehow in league with the crooks. Or that crooks are somehow a problem only in government.

A gangrenous toe is diagnosed; the supposed treatment is amputation of the whole leg.

So it’s nice to report a proposal for dealing with waste and abuse that seems to be actually aimed at the toe.

Spokane Rep. Kevin Parker is driving legislation in Olympia that would harness database technology to prevent millions a year in Medicaid fraud. The proposal’s gathered support from both sides of the aisle, passing the House on Tuesday night, and is modeled on changes being adopted in the federal government. Under the bill, the state would move away from the “pay and chase” model of dealing with fraud, and investigate the use of “predictive technology” to flag suspicious-looking claims early and submit them to further scrutiny.

“No other state has done it,” Parker said Tuesday. “We would be the first.”

Defrauding the government’s various health care programs is big business, though it’s unclear just how big. (Medicare is the federal program for the elderly and disabled; Medicaid is the state-federal program for the poor.) Washington spends $7 billion a year on medical services for the poor, with about $3.1 billion coming from the state and the rest from the feds. A fraud level of 1 percent would be amount to $70 million.

Just about any human enterprise probably has at least 1 percent fraud, if not 10 times that. Government estimates for Medicare and Medicaid fraud range between 3 percent and 9 percent.

In any case, it’s likely a lot, at a time when the cupboards are bare.

The federal Medicare program loses an estimated $60 billion a year in fraud. An inspector general’s report in 2011 said the Centers for Medicare & Medicaid Services was paying tens of millions of dollars in efforts to catch fraud based on inaccurate and inconsistent data, and poor oversight of the contractors hired to do the job. The problems had been ongoing for years.

But there is a renewed focus on fraud. The federal government recently announced it recovered about $4.1 billion in Medicare fraud last year – a record. This is a result of a lot of different strategies, but one major part of it is an attempt to screen and use data more effectively at the front end of the process.

The change – at the federal level and proposed in Parker’s bill – would attempt to add complicated computer programs to beef up prevention. In the credit card and financial sectors, it’s already common to use databases and analytics to identify suspicious information before fraud can occur, and this is simply bringing that model to government, Parker said.

Early versions of this proposal in the House and Senate raised concerns among officials at the Health Care Authority, which oversees several public-health programs. But Parker has worked through several of those concerns, said Cathie Ott, deputy director of systems and monitoring at HCA. The proposal now tasks the HCA with investigating the possibilities and implementing the program only if it can be done effectively and be paid for through savings in recovered fraud.

Parker heard of the proposal last year and thought it was “brilliant.” He introduced legislation, rounded up co-sponsors and has worked to bring in Democrats to support it, including Mary Lou Dickerson and Eileen Cody. I couldn’t reach Dickerson on Tuesday, but she praised Parker and his work on the bill in a committee hearing.

Parker, a Republican, seems to be a true believer in bipartisanship and collaboration. He said he’s worked hard to bring everyone in on this legislation, revising the bill several times after consulting with the HCA, the Washington State Hospital Association, the governor’s office and others.

“I’ve never had a legislative lift this heavy before,” he said.

Plenty of legislative work gets done that way, but it’s hard to imagine a picture more at odds with our current understanding of the partisan divide than Parker – a Spokane conservative who voted against gay marriage – working side-by-side with Dickerson – a Seattle Democrat who has tried on more than one occasion to legalize marijuana.

“Everybody thinks we hate each other here, and we don’t,” Parker said.

Unlike a lot of the “fraud and abuse” amen chorus, Parker is not trying to use the crooks to demonize the system.

“The Health Care Authority has done a lot of things right,” he said. “We’ve been a leader in catching fraud.”

Ott said that HCA fraud procedures led to the recovery of $23 million through attorney general’s office investigations last year. In addition, recoveries for overpayments and other waste brings back an estimated $15 million to $20 million a year, she said.

Ott also said the bill is not expected to hold up payments to providers that would roll downhill and hurt patients. In other words, it’s a real attempt to do more than just talk about waste and abuse.

Without abusing the wrong people.

Shawn Vestal can be reached at (509) 459-5431 or Follow him on Twitter at @vestal13.

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