Aggressive New Tools Used to Curb Fraud: Testimony of Inspector General Levinson March 9, 2011
Recently, the Inspector General spoke to the Senate regarding the efforts of the Department of Health and Human Services (HHS) and the Office of the Inspector General (OIG) to combat fraud and abuse. He addressed the fact that the majority of health care providers are honest, but there is an aggressive minority “of career criminals and sham providers.”
In FY 2010 the OIG opened 1700 health care fraud investigations. In addition, that FY also saw “more than 900 criminal and civil actions and more than $3 billion in investigative recoveries and $1 billion in audit receivables.”
The health care fraud schemes “commonly” included:
- Purposely billing for services not provided
- Purposely billing for services not medically necessary
- Misreporting costs and data to increase payments
- Paying or receiving kickbacks
- Illegal marketing
Perpetrators include street criminals “who believe it safer to steal from Medicare than to traffic illegal drugs” to “Fortune 500 companies that pay kickbacks to physicians in return for referrals.”
The Inspector General identified increasing infiltration by organized crime. He noted that the government recently charged 73 defendants, involving $163 million with fraudulent billing. The indictments charge members of the Armenian-American organized crime syndicate with the fraudulent billings and “using violence to ensure payments to its leadership.” They are charged with establishing 118 phony clinics in 25 states using stolen physician identities.
The OIG states the schemes to commit fraud are becoming more sophisticated. They also migrate to other states and can become viral.
Waste and Abuse of Taxpayer Dollars
The OIG is identifying no tolerance of the “10.5 percent of the Medicare fee-for-service claims paid ($34.3 billion) that did not meet program requirements.” The OIG states the claims should not have been paid based on analysis finding “insufficient documentation, miscoded claims, and medically unnecessary services accounting for almost all of these errors.”
The OIG is also concerned that it has overpaid in areas such as DME. Medicare has paid over $17,000.00 for pumps used to treat pressure ulcers when, in reality, the suppliers paid $3,600.
The OIG and Its New Technological Partners
Because of the sophistication of “the criminal activity and complexity of the scams,” the HHS and Department of Justice (DOJ) collaborated with antifraud efforts grounded in the Health Insurance Portability and Accountability Act of 1996 (HIPAA) creating the Health Care Fraud and Abuse Control (HCFAC) Program. This has been an escalating aggressive program with a high return on dollars invested.
In 2009, HCFAC spearheaded the most aggressive of all fraud enforcement programs. The HHS Secretary and the Attorney General announced the formation of HEAT: Health Care Fraud Prevention and Enforcement Action Team. This team was to build upon the Medicare Strike Force teams that had convicted 116 in South Florida and secured over $186 million in criminal fines. Using a “data driven approach to identify unexplainable billing patterns and investigating these providers for possible fraudulent activity” (Holder, E. May 20, 2009) the team quickly added more sophisticated technology, clinical personnel/program experts, forensic auditors, top level law enforcement personnel, and data analysts to the strike force. In addition, this team had senior officials from the DOJ and HHS with direct access to Congress.
Because of their success operationally and financially (in FY 2008-2010, for every $1.00 spent the return was $6.80), in 2010, their budget included a 50% increase to funding in excess of $311 million. The industry should be aware!
Last month, strike forces engaged in one of the largest Federal health care fraud takedowns ever. In simultaneous raids in 9 cities, 111 defendants were arrested and charged with over $225 million in false billing. The 111 included doctors, nurses, company owners, and other executives with charges from violating the anti-kickback statute to money laundering and identity theft.
“With the approval of the Attorney General, the Council of the Inspectors General on Integrity and Efficiency (CIGIE) has established procedures to permit special agents from within the Inspector General Community to work together on operations like the HEAT Strike Forces, thereby maximizing efficiency.” Because of the expertise of the team, they are not just raiding when they suspect an issue, they have months of data analyzed prior to the arrest and are then able to raid, arrest, and initiate payment suspensions.
The key to their incredible success are a series of edits that hone in on aberrant data. The data are monitored and certain changes or new edits are added quarterly. The team, for example, was able to identify that Medicare’s average spending per beneficiary for inhalation drugs was five times higher in south Florida than in the rest of the country and they recently responded. Improper payments for blood glucose strips led to an edit that monitors overlapping dates of services.
Later, in March 2011, the OIG will release its latest edition of: Compendium of Unimplemented OIG Recommendations. This is a must read to have a better idea of recommendations that may still be implemented.
Enhanced Tools and The Affordable Care Act (ACA)
The ACA strengthens law enforcement activities, encourages more audits, and “encourages greater coordination among Federal agencies” by looking at program and payment vulnerabilities, increasing compliance monitoring, and enhances program oversight. It authorizes more robust screening processes for new providers, allows temporary enrollment moratoria when the Secretary learns of fraud “hot spots”, provides for enhanced payment oversight as needed and is mandating compliance programs.
The ACA sanctions “enhanced authority to suspend payments for credible allegations of fraud.” There have been important “changes to the False Claims Act, the Federal anti-kickback statute, OIG’s administrative authorities, and the Federal Sentencing Guidelines which will help the government to more effectively prosecute those who defraud or abuse Federal health care programs.” Program exclusions will now be used more; not allowing convicted individuals to participate in a Medicare program for a specific number of years and monitoring to be certain they are not violating the exclusion by working with family members in a Medicare program. The OIG has also stated the exclusions will be used with executives of larger organizations.
The OIG has web site guidance used to evaluate whether a section of the exclusion should be imposed. To read more, visit http://oig.hhs.gov . This site also identifies ways patients and providers can reduce fraud.
The OIG is promoting compliance with a HEAT Provider Compliance Training Initiative offering free compliance training. The seminars have been scheduled in Tampa, Kansas City, Baton Rouge, Denver, and Washington, DC throughout the Spring of 2011.
The OIG has also published A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse, a summary of laws with guidance for physicians to be in compliance.
Additionally, the OIG is now publishing a list of the ten most wanted health care fraud fugitives defrauding taxpayers of $136 million and the 1.888.476.4433 number to call.
The OIG has also created a tip line at 1.800.HHS.TIPS (1.800.447.8477) and an improved website: www.hhs.gov/stop medicarefraud.gov
The RAC, MAC, MIC, Z-PIC audits will continue. Education of clinicians is a must. Home health providers know there is a focus on documentation and medical necessity. Select Data has created a four part series on Insufficient Documentation, Skilled Nursing, Therapy, and Medical Necessity. Visit our website: SelectData.com or Youtube for the entire free four part series.