FEBRUARY
14, 2020 / 6:01 AM / AP
Washington — A government watchdog plans to launch a nationwide
probe into how telemarketers may be getting hold of seniors' personal Medicare
information, a red flag for potential fraud and waste. An official with the
Health and Human Services inspector general's office told The Associated Press
the audit will be announced next week.
It would
follow a narrower probe which found that an electronic system designed for
pharmacies to verify Medicare coverage was being used for searches that
appeared to have nothing to do with filling prescriptions. The official spoke
on condition of anonymity ahead of a formal announcement.
The watchdog
agency's decision comes amid a wave of relentlessly efficient
telemarketing scams targeting Medicare recipients and
involving everything from back braces to DNA cheek swabs.
For years,
seniors have been admonished not to give out their Medicare information to
people they don't know. But a report on the initial probe, provided to the AP,
details how sensitive details can still get to telemarketers when a Medicare
beneficiary thinks he or she is dealing with a trustworthy entity such as a
pharmacy or doctor's office.
Key personal
details gleaned from Medicare's files can then be cross-referenced with
databases of individual phone numbers, allowing marketers to home in with their
calls. The report is being released Friday.
The initial
audit focused on 30 pharmacies and other service providers that were frequently
pinging a Medicare system created for drugstores.
The
electronic system is intended to be used for verifying a senior's eligibility
at the sales counter. It can validate coverage and personal details on millions
of individuals. Analyzing records that covered 2013-15, investigators
discovered that most of the audited pharmacies, along with a software company
and a drug compounding service also scrutinized, weren't necessarily filling
prescriptions.
Instead,
they appeared to have been tapping into the system for potentially
inappropriate marketing.
Medicare
stipulates that the electronic queries - termed "E1 transactions"-
are supposed to be used to bill for prescriptions. But investigators found that
some pharmacies submitted tens of thousands of queries that couldn't be matched
to prescriptions. In one case, a pharmacy submitted 181,963 such queries but
only 41 could be linked to prescriptions.
The report
found that on average, 98% of the electronic queries from 25 service providers
in the initial audit "were not associated with a prescription." The
inspector general's office didn't identify the pharmacies and service
providers.
Pharmacies
are able to access coverage data on Medicare recipients by using a special
provider number from the government.
But
investigators found that four of the pharmacies they audited allowed marketing
companies to use their provider numbers to ping Medicare. "This practice
of granting telemarketers access to E1 transactions, or using E1 transactions
for marketing purposes puts the privacy of the beneficiaries' (personal
information) at risk," the report said.
Some
pharmacies also used seniors' information to contact doctors treating those
beneficiaries to see if they would write prescriptions. Citing an example, the
report said, "The doctor often informed (one) provider that the
beneficiary did not need the medication."
The
inspector general's office said it is investigating several health care
providers for alleged fraud involving E1 transactions. Inappropriate use of
Medicare's eligibility system is probably just one of many little-known paths
through which telemarketers can get sensitive personal information about beneficiaries,
investigators said.
The watchdog
agency began looking into the matter after the Centers for Medicare and
Medicaid Services, or CMS, asked for an audit of a mail order pharmacy's use of
Medicare's eligibility verification system.
In a formal response
to the report, CMS Administrator Seema Verma said CMS retooled its verification
system last year so it automatically kicks out queries that aren't coming from
a pharmacy. More than a quarter-million such requests have been rejected, she
wrote.
Medicare is
committed to ensuring that the system is used appropriately, Verma added. The
agency can revoke access for pharmacies that misuse the privilege and is
exploring other enforcement options.
The
inspector general's office acknowledged Medicare's countermeasures but said it
wants to see how effective they've been.
Health care
fraud is a pervasive problem that costs taxpayers tens of billions of dollars a
year. Its true extent is unknown, and some cases involve gray areas of complex
payment policies.
In recent
years, Medicare has gotten more sophisticated, adapting techniques used by
financial companies to try to head off fraud. Law enforcement coordination has
grown, with strike forces of federal prosecutors and agents, along with state
counterparts, specializing in health care investigations.
Officials
gave no timetable for completing the audit.
First
published on February 14, 2020 / 6:01 AM
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