In the second panel, featuring witnesses from federal agencies, Lewis Morris, Chief Counsel in the Office of Inspector General (OIG) outlined the OIG's five-principle strategy to combat health care fraud, waste, and abuse. Morris said that a comprehensive strategy of prevention, detection, and enforcement is absolutely necessary. Based upon the OIG's 30-year history and work in the area, the five principles of effective health care integrity strategy are:

--Enrollment: Reviewing the individuals and entities that want to participate as providers and suppliers prior to their enrollment or reenrollment in the health care programs.


--Payment: Establishing payment methodologies reasonable and responsive to changes in the marketplace and medical practice.

--Compliance: Health care providers and suppliers should be helped in adopting practices that promote compliance with program requirements.

--Oversight: Programs should be monitored vigilantly for evidence of fraud, waste, and abuse.

--Response: When fraud is detected, responses should be swift, and punishment imposed should be sufficient as a deterrence. Program vulnerabilities should be remedied.

Kathleen M. King, Director, Health Care, in the U.S. Government Accountability Office (GAO), testified that the GAO has designated Medicare as a high-risk program since 1990. Medicare is high-risk because of the program's size and complexity. The GAO strategies for preventing fraud, waste and abuse-and to reduce improper payments-are:

--Strengthening provider enrollment process and standards, such as checking the background of providers, and a stricter scrutiny of providers identified as particularly vulnerable to improper payments to ensure they are legitimate businesses.

--Improving pre-payment review of claims. King says this is essential to help ensure that Medicare pays correctly the first time. "GAO has recommended that CMS further enhance its ability to identify improper claims through additional automated pre-payment claim review before they are paid."

--Focusing post-payment claims review on most vulnerable areas.

--Improving oversight of contractors. "Because Medicare is administered by contractors, overseeing their activities to address fraud, waste, and abuse is critical," King explained. CMS oversight on this area is already expanding.

--A strong process to resolve vulnerabilities leading to improper payment. This is one area that CMS has not yet developed, King said.

Finally, Kimberly Brandt, Director of the Program Integrity Group for CMS, explained current efforts. The first strategic principle, Brandt testified, is to "tailor interventions toward the areas where fraud and abuse have been shown to be the greatest." As example, Brandt explained that CMS has identified Durable Medical Equipment (DME) and home health care as areas highly vulnerable to waste, fraud, and abuse. "As a result, CMS has instituted stricter DME supplier and home health provider enrollment requirements in an effort to reduce the number of fraudulent providers participating in these programs."

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