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Medicare boss overruled investigators in fraud probes: Report

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The federal official who oversees the nation's $600 billion Medicare program reversed moves by fraud investigators to block payments to health providers under investigation after she was pressured by politicians, according to a new report Friday.

In one 2012 case, two months after Medicare boss Marilyn Tavenner ordered the release of some payments billed by a Riverside General Hospital in Houston at the request of Rep. Sheila Jackson Lee, D-Texas, the hospital's CEO Earnest Gibson III was arrested on federal charges related an alleged $158 million Medicare fraud scheme, according the The Wall Street Journal.

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The story said contract investigators for the Centers for Medicare and Medicaid Services had wanted to block all payments to Riverside General after determining that nearly 90 percent of a sampling of certain Medicare reimbursement claims by the hospital "were incorrect."

Marilyn Tavenner
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Marilyn Tavenner

But Tavenner, the administrator of CMS, reversed that decision after hearing Rep. Lee's "concerns" about how the suspension of payments "could limit patients' access to care," the story said

In a related message to investigators, a Medicare official wrote, "These changes are at the direction of the Administrator and have the highest priority," according the Journal.

The Journal said Tavenner's spokesman told the newspaper at the time of the decision that "she was unaware of details" of Gibson's pending criminal investigation.

"However, Ms. Tavenner and senior Medicare officials had discussed the possibility of pending law enforcement action in a conference call earlier the same day, according to one person who was on the case," the newspaper wrote.

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Gibson was convicted this past October of fraud and other charges. Earlier, in the spring, Riverside General was barred from the federal Medicare program, which covers primarily elderly people.

In another 2012 case cited by the Journal, Medicare contract investigators had blocked some payments to 33 skilled nursing homes in Florida amid concerns about "suspicious billing patterns" at them.

But Tavenner again reversed that move, ordering the release of all payments to the nursing homes, allegedly after being contacted about the issue by Gov. Rick Scott of Florida, who had worked with Tavenner when they were executives at the hospital operator HCA Holdings, according to the story.

In a statement, Tavenner told the Journal, "I must be available and responsive to each of the constituencies that CMS serves, including our beneficiaries, professional associations and elected officials."

A CMS spokesman also told the newspaper that Tavenner "tries to listen to as many of the concerns that are raised as possible and ask many questions of our CMS staff to make sure we are preserving access and quality of care while aggressively preventing and punishing fraud."

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In response to a CNBC query about the story, a CMS spokesman noted that "thanks to administration efforts, including the use of new authorities from the Affordable Care Act, the government's health-care fraud prevention and enforcement efforts recovered a record-breaking $4.3 billion in taxpayer dollars in fiscal year 2013, up from $4.2 billion in FY 2012, from individuals and companies who attempted to defraud federal health programs serving seniors or who sought payments from taxpayers to which they were not entitled."

"Over the last five years, the administration's enforcement efforts have recovered $19.2 billion, up dramatically from $9.4 billion over the prior five-year period," the spokesman said.

Read the full WSJ story here.