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CMS sweetens the deal for fraud whistleblowers

April 25, 2013
by Pamela Tabar, Senior Editor
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The Centers for Medicare & Medicaid Services (CMS) has submitted a proposal to raise the rewards for those who report fraudulent Medicare/Medicaid billing activities. The proposal would increase the incentive program payouts for whistleblowers from 10 percent of the first $10,000 in fraud sanctions to 15 percent of up to a whopping $66 million in sanctions.

The significant increase in whistleblower incentives could soon outweigh the financial risk of ratting out a fraudulent employer and entice insiders to report large-scale fraudulent behaviors. For example, if a fraud case recovers $50,000 in settlements for CMS, the whistleblower would receive $7,500. But for cases that reach CMS’ proposed new cap of $66 million, the whistleblowers could get almost $10 million.

CMS estimates that bumping up the reward incentive could reap another $24 million in additional payment recovery, noted the proposal scheduled for publication in the April 29 Federal Register. “Based upon the experience under the IRS reward program, the increase in the portion of the amount collected eligible for a reward will likely result in an increase of reporting of sanctionable conduct, which would increase the collection of improper payments by the federal government. There may also be a sentinel effect whereby fraud and errors are reduced by Medicare beneficiaries' scrutiny of their bills.”

Other changes in the proposal include expanding the circumstances by which CMS can deny or revoke enrollment and tightening the billing practices of ambulance companies, preventing them from back-billing for services delivered prior to enrollment.

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