The Centers for Medicare and Medicaid Services (CMS) has instituted a series of initiatives in recent years to end the “pay-and-chase” system. Under the “pay-and-chase” model, federal healthcare programs blindly pay out hundreds of billions of dollars in healthcare claims each year — and then later come back to identify fraud in those claims and chase back the money. In 2019 alone, improper payments totaled $45 billion (with a capital “B”) from Medicare and $60 billion from Medicaid and the Children’s Health Insurance Program.
To combat the Covid-19 pandemic, Congress through the CARES Act has allocated billions of additional federal dollars to these programs while also relaxing the rules and regulations governing claims and reimbursements.
By releasing a sea of new federal dollars into the fraud-rich environment of federal healthcare, Congress has effectively nullified any progress CMS has (or could have) made in ending the pay-and-chase model anytime soon. These ongoing developments are bringing with them a massive wave of fraudulent reimbursements followed by another massive wave of federal expenditures in the investigation, civil recoupment, and criminal prosecution of alleged fraudulent payments. Expect to see these effects system-wide and not limited solely to those programs focusing on CARES Act objectives.
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