Tennessee Bureau of Investigation Medicaid Fraud Control Unit

1. Tennessee Bureau of InvestigationMedicaid Fraud Control Unit Bob Schlafly Special Agent- in- Charge October 21, 2009

2. What is an M.F.C.U.? MFCU (mŭ-few´-kew) n. 1. acronym for Medicaid Fraud Control Unit • A state agency designated to investigate and prosecute provider fraud and violations of state law pertaining to fraud in the administration of the Medicaid program • Also reviews complaints of abuse, neglect, or financial exploitation of nursing home and other assisted living residents

3. M.F.C.U. Jurisdiction • Fraud in the Administration of the Program • Provider Fraud • Doctors, Pharmacists, Dentists, etc. • Hospitals & Clinics • DME Companies • Transportation • Pharmaceutical Companies (Globals) • Neglect and Abuse of Medicaid Patients • Medicaid Patient’s Private Funds

4. Recipients are NOT Our Jurisdiction • Federal regulations prohibit MFCUs from investigating recipient fraud • EXCEPTION: MFCUs may investigate recipient fraud if there is an alleged conspiracy with a provider (i.e. drug diversion) • MFCUs are prohibited from data mining - even for providers

5. What is the N.A.M.F.C.U.? NAMFCU (nam-few´-koo) n. 1. acronym for National Association of Medicaid Fraud Control Units • A professional association of state Medicaid fraud control units created in 1978 to provide training, promote communication and interstate cooperation, provide for the exchange of information, and educate the public about the work of the MFCU programs www.namfcu.net

6. National Association of Medicaid Fraud Control Units • MFCUs are in 49 states and the District of Columbia (North Dakota is the only state without one) • 42 MFCUs are located within the offices of the State Attorney General • All MFCUs are required to be a single, identifiable entity of state government, separate and distinct from the Medicaid agency • All MFCUs are 75% federally funded • “Global case” recovery since 1994 is more than $3 Billion

7. MFCU Oversight • The Department of Health and Human Services, Office of the Inspector General, oversees all MFCUs • Each MFCU must comply with 12 performance standards to carry out their duties and responsibilities in an effective and efficient manner • Annual recertification is required

8. Regional Comparison of MFCU Staffing Levels Sizes of MFCUs vary greatly: • Alabama- 8 employees • Florida- 205 employees • Georgia- 56 employees • Kentucky- 27 employees • North Carolina- 28 employees • South Carolina- 14 employees • Tennessee- 35 employees

9. Tennessee’s MFCU • Located within the Tennessee Bureau of Investigation (TBI) since 1984 • Responsible for identifying and helping to recover over $246.6 million since 1984 ($175.8 million since July of 2005) • Spent only $39.0 million since 1984 • Most fraud prosecutions are in federal court • Most abuse prosecutions are in state court

11. Statistics by Year

12. Map of Tennessee MFCU Offices

13. Tennessee MFCU • Awarded National State Fraud Unit Award in 1998 and 2004 • Four agents given special recognition nationally for case work • Like all MFCUs, is considered a “health oversight agency” under HIPAA, and is therefore authorized to receive PHI from “covered entities” and “business associates”

14. Things We Do… • Investigate and prosecute providers- criminally and civilly • Conduct office reviews onsite • Execute search warrants • Subpoena records • Conduct interviews • Make arrests if needed

15. …but we’re not the only ones: • Federal Bureau of Investigation • United States Postal Inspectors • Internal Revenue Service • Drug Enforcement Administration • Health and Human Services - OIG • Local PD / Sheriff's Offices • Tricare / Military Inspectors • …and many, many, more

16. Not to mention… • Other state revenue and insurance regulatory agencies • Adult Protective Services • State departments of health • State Medicaid auditors • Managed Care Organization investigators *Where applicable It's a TEAM effort!!!

17. TBI MFCU Caseload(4/1/08 through 3/31/09) • 77 total cases opened • 238 abuse referrals • 68 total cases closed • 49 cases referred out for prosecutorial consideration, with 74 abuse cases referred to other agencies for non-criminal consideration • 28 indictments • 35 convictions

18. MFCU Caselaod • Abuse Cases • Approximately 25% of total MFCU cases • Fraud Cases • Physicians- 31% • Medical Support- 30% (includes nurse practitioners, physician assistants, transportation, labs, DMEs, etc.) • Hospitals and other facilities- 7%

19. Healthcare Costs • 1994 TennCare budget- $3 billion • 2007 TennCare budget- $7 billion • 2003- Healthcare costs reached $1.7 trillion • 2013- Healthcare costs are predicted to reach $3.4 trillion • Healthcare Fraud is estimated to be 10% - 20% of all health care costs

21. Is this Criminal? • In this case, Dr. Burns was upcoding, but he was also downcoding to a similar degree • In the end, Dr. Jones’ submitted claim amounts for ALL E&M procedures was in line with the average submitted claim amounts for all E&M’s of the peer groups • Dr. Jones probably needs to be counseled on his coding methods, but there’s nothing criminal here

22. After further review… • Other cases that may initially appear to be fraud: • Poor documentation: services were performed but not detailed correctly • Ambiguity: when the rule is not clear whether or not the service is billable • Prior authorization: if ANY “agent” of the Medicaid program tells the provider that a certain action is permissible

23. After even further review… • Other referral guidelines: • Has the provider been counseled or audited in the past for the similar activity? • Some providers plead ignorant, but is the ignorance intentional? • Is your evidence credible? • Referrals from criminals looking to “cut a deal” with a prosecutor (not all bad, but proceed with caution) • Recently fired employees • Poor data quality or mining practices

24. Algorithms • High Rollers • Works well with independent home health providers, but can be used with all provider types • Can sometimes be explained (i.e. exclusive provider in area, institutional contracts, etc), but to find the highest overpaid, looking at the highest paid is a good place to start • Simple Query: Amounts paid in descending order • Highest paid are your targets

25. Algorithms • Zombies • Services provided to dead recipients • In many cases, claim was just submitted in a backlog and can be explained • Some providers may intentionally bill services immediately following the death of a patient because he or she believes it will fly under the radar • Simple Query: Date of Service > Date of Death

26. Algorithms • Insomniacs • For those who work 24 hours a day or more • Sum the service units for a date and convert to hours • Two ways to look at this: • Services to a single recipient on one day from multiple providers > 24 hours • Services to multiple recipients on one day from a single provider > 24 hours • Some courts have ruled that services provided beyond 16 hours in a day on a consistent basis exceeds the reasonable allowance for those services by a single provider

27. Algorithms • Workaholics • For those who refuse to take their vacations • Look for providers who bill services every day of the year – they are out there! • Count individual service dates from a particular provider’s claims for the previous year – look for 365 or 366 on a leap year • Once you identify these providers, someone can search vacation properties, plane tickets, hotel reservations, etc to PROVE beyond any doubt that the provider was not at work every day in that year

28. Algorithms • “Neglectful” Hospital Search • Hospitals are considered full service, therefore there is no need for home health or transportation services • Compare dates of services for patients in hospitals (excluding the first and last dates of service) with the dates of home health and transportation services • Your “Resort Hospital” may offer a variety of amenities, but Medicaid shouldn’t be paying for them!

29. Health Care FraudTrends and Schemes • Billing for unnecessary services • Billing for more expensive services than those rendered (“upcoding”) • Billing for services not performed • Billing for professional services not rendered by the type of professional represented on claim form • Billing twice for the same service

30. More Health Care FraudTrends and Schemes • Kickbacks • Off-label usage • Drug diversion • “Short-fills” of prescriptions • Patient recruitment fraud • “Cherry-picking” • Transportation fraud

31. Statutory Fraud Tools • Federal laws • 18 USC 1035- False Statements Relating to Health Care Matters • 18 USC 1347- Health Care Fraud • 18 USC 1518- Obstruction of Criminal Investigations of Health Care Offenses • 18 USC 1341- Mail Fraud • 31 USC 3729- False Claims

32. Statutory Fraud Tools • State Laws • TCA 71-5-2601 TennCare Fraud • May 2007- amended to include causing a fraudulent claim to be filed • June 2007- amended to include doctor shopping by TennCare recipients • July 2008- amended to include making false statements in connection with a TennCare fraud investigation

33. Statutory Fraud Tools • TCA 71-5-181 et seq • Tennessee Medicaid False Claims Act • allows $5,000- $25,000 penalties plus treble damages • June 2009- amended to allow TennCare to bring administrative proceedings upon request of the Attorney General against individuals other than enrollees in cases less than $10,000.00

34. Recent Case Examples • State Senator John Ford • Legislative committee member • Two- week jury trial in July 2008 • Convicted on all six counts • Received over $400,000 as “consultant” to help win a TennCare contract • Received another $400,000 as a “consultant” to assist a TennCare MCO with state officials • Sentenced to 14 years imprisonment

35. Recent Case Examples • John Emory Sawyer III • Licensed clinical psychologist • Billed for psychotherapy to nursing home patients, when he wasn’t there • Falsely inflated the amount of time his employees billed • More than $77,000 paid in an eight month period for services not provided • Sentenced to 18 months incarceration followed by 3 years supervised release

36. Recent Case Examples • Glenesha Moye and Tabitha Jones • Unlicensed individuals who owned a home health agency • Billed for unsupervised “home health” and psychotherapy services performed by unlicensed individuals • Pled guilty of conspiring to defraud Medicare and TennCare of more than $1.1 million • Sentencing set for November 2009

37. Recent Case Examples • Kindred Healthcare, Inc. and Pharmerica • Provide pharmaceuticals to TennCare patients in group homes and long-term care facilities • Billed for a higher number of pharmaceuticals than were actually administered • Investigation prompted by billing clerk who blew the whistle, the employer was unresponsive • Civil settlement of $1,307,752

38. Recent Case Examples • Billie Anderson • Nursing Home Owner/Administrator • Had no medical director for 10 months • Presented the state with a contract for employment of a medical director with a forged signature of a doctor • Billed Medicaid $1.4 million as if facility was in compliance with federal regulations • One week federal trial

39. Convicted and sentenced to two years imprisonment “They cited me for not having a medical director for a short time because I had to let him go for womanizing and not charting on his patients… they found a niche to get in on me. Just because I let a doctor go who wasn’t taking care of his patients”. Billie Anderson, as quoted in the Johnson City Press

40. Recent Case Examples • Drug Diversion • Overprescribers who keep Tennessee in the top rankings for prescriptions per capita • Four types of cases: • Drugs for Money • Drugs for Sex • Drugs for Drugs • Prescribers who just can’t say no!

41. Cupid Poe

42. Questions? Bob.Schlafly@tn.gov 615-744-4362