Would Smart Cards Curb Fraud in Federal Health Care Programs?
According to a GAO report released this week, the use of smart cards would likely only result in a minimal reduction in fraud and abuse in federal health care programs.
Some health care fraud schemes involve using a beneficiary’s identification number to bill federal programs for medical devices or services not rendered. One solution would be to issue smart cards to authenticate the beneficiary and ensure that they and the provider were present at the point of care.
GAO was tasked with analyzing federal health care fraud schemes and evaluating whether smart cards might reduce fraud base on the types of schemes being used.
GAO analyzed 739 cases of health care fraud that were resolved in 2010 and found the following:
- 68% of the cases involved more than one fraud scheme. 61% used two-four schemes and 7% used five or more.
- Fraudulent billing topped the list for type of fraud scheme, such as billing for services not rendered at 43% and billing for services that were not medically necessary at 25% of cases.
- Other common schemes included falsifying records to support the fraud scheme (25%), paying kickbacks to participants in the scheme (21%), and fraudulently obtaining controlled substances or misbranding prescription drugs (21%).
- Providers were involved in wrongdoing in 62% of the cases, and beneficiaries were involved in 14% of the cases.
GAO’s research found that in 78% of the cases, use of smart cards would have been unlikely to prevent fraud due to the involvement of the beneficiary or the provider in the fraudulent operation. However, GAO concluded that the use of smart card technology could have been beneficial in combating fraud in 22% of the cases identified. These were cases where a portion of the case or the entire case involved lack of beneficiary or provider verification at the point of care.
GAO did not make any recommendations based on their findings. They incorporated technical comments received from HHS and DOJ on a draft report. HHS stated that current CMS policy does not require Medicare beneficiaries to present a smart card at the point of care. Doing so would require significant changes for CMS and would also create access to care issues.
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