Smart cards would do little to curtail Medicare fraud: GAO

Medicare beneficiary smart cards would have a limited impact on reducing fraud and could even introduce “new, more sophisticated fraud schemes,” a new report by the Government Accountability Office concludes.

The report provides a litany of benefits that streamline the flow and ensure accuracy of vital information. (It was requested by lawmakers as part of their deliberations that wound up leading to a repeal of the Sustainable Growth Formula.) But those benefits would be mitigated because in its quest to not limit beneficiaries' access to care, the Centers for Medicare & Medicaid Services would continue paying claims the same way for people who legitimately don't have a smart card.

The GAO said it has learned from stakeholders that authenticating beneficiaries at the point of care could potentially limit some schemes in which Medicare providers misuse beneficiary Medicare numbers to bill fraudulently for services. As of May 2014, CMS was aware of 284,000 Medicare beneficiary numbers that had been compromised and potentially used to submit fraudulent claims, the report added. Other key benefits, including the ability to electronically exchange beneficiary medical information and electronically convey beneficiary identity and insurance information to providers, would do little or nothing to deter fraud, experts said.

Adding certain layers of protection to smart cards like biometric biometric information or a picture ID could help to deter fraud, the GAO said.

In late March, the U.S. Justice Department announced it had captured $3.3 billion from healthcare fraud prosecutions and other deals in 2014, bringing to nearly $28 billion the amount it has recouped since the beginning of its 18-year-old Health Care Fraud and Abuse Control (HCFAC) Program.