Federal Government Held To Program Integrity Manual Standards
Background of Landmark Fraud Case
Dr. Ona Colasante was found guilty in May 2016 of billing for unnecessary services and purchasing drugs, identical to those sold in the US, from outside the country, known as the landmark fraud case. The government proposed payment of $6.9 million, although the payments had a face value of only an estimated $24,000. The seemingly unproportioned loss was calculated based on the extrapolation performed in two government lead audits. The government statisticians were under question regarding the astronomical outcome in payments demanded. It was determined that under the two audits, the statistical random sample selected did not abide by the rules of extrapolation under the Program Integrity Manual (PIM).
Outcome from Flawed Government Extrapolation
The government standards stated in the PIM discuss how properly executed extrapolation can occur if:
- A defined and appropriate universe is used
- The sample frame covers the target universe and is properly constructed
- Sampling units are selected and each has a known probability of selection
- Proper randomization is utilized
- Variables of interest are accurately measured
- Formulas used for estimation are correct
These conditions are expanded upon in the link below to the Medicare Program Integrity Manual.
Under the two government audits performed, these standards were not followed. The issue at hand is that the government did not abide by the rules it requires those in statistical practice to follow. Their extrapolation techniques were flawed and resulted in repayments that were highly overvalued. After this finding, Dr. Ona was required to pay approximately $5 million less than what was originally proposed.
Conclusion
Although fraud was committed by the physician previously mentioned, the government should be held to the same standards it holds others to. Hefty repayments from healthcare providers are demanded every year. It is important to note and understand that such demands may not be accurate and can therefore lead to large unnecessary financial burdens on physicians.
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