Fraud Prevention & Proper Billing Practices

1. Fraud Prevention & Proper Billing Practices Robert Aube Provider Outreach & Education ME AAHAM April 12, 2013

2. DISCLAIMER This information release is the property of NHIC, Corp., J14 AB MAC. It may be freely distributed in its entirety but may not be modified, sold for profit or used in commercial documents. The information is provided “as is” without any expressed or implied warranty. While all information in this document is believed to be correct at the time of writing, this document is for educational purposes only and does not purport to provide legal advice. All models, methodologies and guidelines are undergoing continuous improvement and modification by NHIC, Corp. and the Centers for Medicare & Medicaid Services (CMS). The most current edition of the information contained in this release can be found on the NHIC, Corp. web site at www.medicarenhic.comand the CMS web site at www.cms.gov. The identification of an organization or product in this information does not imply any form of endorsement.

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4. Agenda • Introduction • Fraud • Abuse • Fraud and Abuse Laws • Fraud and Abuse Mandates • Penalties and Sanctions • PSCs and ZPICs • Compliance Contractors • SGS Case Examples • Unacceptable Billing Practices • Improper Waivers • Ten Tips For Protecting Your Practice • Additional Fraud and Abuse Training • Important Reminders

5. ACRONYMS • MAC- Medicare Administrative Contractor • PSC- Program Safeguard Contractor • ZPIC- Zone Program Integrity Contractor • SGS- SafeGuard Services • CMN- Certificate of Medical Necessity • FCA- False Claims Act • CMP- Civil Monetary Penalties • SOW- Statement Of Work • HIPAA- Health Insurance Portability and Accountability Act • MIP- Medicare Integrity Program • NEBISC- New England Benefit Integrity Support Center • FERA- Fraud Enforcement and Recovery Act

6. ACRONYMS (cont.) • CPI- Center for Program Integrity • FPS- Fraud Prevention System • DHS- Designated Health Services • DHHS- Department of Health and Human Services • OIG- Office of Inspector General • DOJ- Department Of Justice • FBI- Federal Bureau of Investigation • CERT- Comprehensive Error Rate Testing • IPIA- Improper Payments Information Act • CDC- CERT Documentation Contractor • CRC- CERT Review Contractor • RA- Recovery Auditor

7. Introduction The purpose of this presentation is to increase your awareness of integrity issues and prevention of potential fraudulent and abusive practices against Medicare. Most providers of health care are honest businessmen and women who want to provide quality health care to Medicare beneficiaries. However, there remains a relatively small group of providers who take advantage of the Medicare program and engage in schemes or practices that result in inappropriate payments.

8. FRAUD Definition of Fraud The intentional deception or misrepresentation which an individual makes, knowing it to be false, and that it could result in some unauthorized benefit to themselves or some other person Elements of Fraud Knowingly false statement Causes a payment or benefit Intent to defraud Medicare

9. Examples of Fraud • Billing for a service that is not provided • Altering claim forms or medical documentation to obtain a higher payment • Deliberately applying for duplicate payment • Soliciting, offering or receiving kickbacks, bribes, or rebates • Certificate of Medical Necessity (CMN) completed without patient review • Supplier completion of prohibited portions of the CMN • Misrepresentation of services rendered • Non-covered services billed as covered services • Billing Medicare as secondary with a false primary insurance payment

10. Examples of Fraud (continued) • Use of another person’s Medicare card • Repeated violations of the participation agreement or assignment agreement • Billing based on gang visits • Billing for services with inappropriate modifiers • Collusion between the provider and beneficiary

11. ABUSE Definition of Abuse Actions that are inconsistent with accepted, sound medical, business or fiscal practices. Abuse directly or indirectly results in unnecessary costs to the program through improper payments. CMS Standards Were the services medically necessary? Did they exceed professionally recognized standards? Were they provided at a fair price?

12. Examples of Abuse • Unbundled charges • Claims for services not medically necessary to the extent furnished • Billing patients for greater out of pocket expenses • Submitting bills to Medicare instead of other payers first • Violations of the Medicare participation agreement

13. Fraud & Abuse Laws

14. False Claims Act What is the False Claims Act? Section 1128A of the Social Security Act/42 USC 1320a-7aa Qui Tam Provision “Whistle Blower” Who the Law applies to Type of Fraud Prosecuted Under the FCA

15. Anti-Kickback Statute The Anti-Kickback Statute Section 1128B of the Social Security Act/42 USC 1320a-7b Statute prohibits Soliciting or receiving remuneration for referrals of Medicare or Medicaid patients, or referral for services or items which are paid for, in whole or in part, by Medicare or Medicaid; Soliciting or receiving remuneration in return for purchasing, leasing, ordering, or arranging for, or recommending purchasing, leasing, or ordering any good, facility, service or item for which payment may be made in whole or in part, by Medicare or Medicaid;

16. Physician Self-Referral Law The Physician Self-Referral Laws Section 1877 of the Social Security Act (the Act) (42 U.S.C. 1395nn), also known as the physician self-referral law and commonly referred to as the "Stark Law“ Stark Law Basics Prohibition on Physician Self-Referral Referrals Designated Health Services Financial Relationships

17. Exclusion Statute The Exclusion Statute Section 1128(a),(b) and (c) of the Social Security Act/42 USC 1320a-7a Excluded from participation if convicted of the following types of criminal offenses: Medicare Fraud Patient abuse or neglect Felony offense related to health care fraud or; Felony offense related to controlled substances Exclusions Data Base Avoid Civil Monetary Penalties (CMP)

18. Fraud and Abuse Mandates Many organizations work together to fight fraud and abuse in the Medicare program New laws and other recently passed anti-fraud legislation also help to further strengthen the efforts of reducing fraud and abuse in Medicare The Centers for Medicare & Medicaid Services (CMS) has undertaken an aggressive role to combat Medicare/Medicaid fraud and abuse

19. Penalties and Sanctions Providers of health care and services found to have been billing for services not provided, not covered, or in excess of recognized standards of care, are subject to a variety of sanctions. These include: Administrative overpayment recoveries Expanded prepayment review Payment suspension Civil Monetary Penalties (CMP) Criminal and civil prosecutions and penalties Administrative sanctions Exclusion from the Medicare and Medicaid programs

20. PSCs and ZPICs

21. Program Safeguard Contractor Origins • The Health Insurance Portability and Accountability Act (HIPAA) of 1996 (Kassenbaum-Kennedy Legislation) created a provision to establish the Medicare Integrity Program (MIP) • Allowed the Centers for Medicare & Medicaid Services (CMS) to bid portions of Medicare administration to specialty contracts known as Program Safeguard Contractors (PSCs) • The PSCs could bid on some, all or any sub-set of the work associated with the following functions in the PSC Statement of Work (SOW)

22. Zone Program Integrity Contractors (ZPICs) • Medicare Prescription Drug, Improvement and Modernization Act of 2003 imposed Medicare fee-for-service contracting reform • Established Medicare Administrative Contractors (MACs) • Replaces the Fiscal Intermediaries and Carriers • Established the ZPICs based on the MACs • Replaces the PSCs • Streamlines program integrity functions • Allows a single contractor to address fraud and abuse issues across all claim types • Eventually will include Medicare Part C and Part D program integrity within the ZPICs

23. Zone Program Integrity Contractors (ZPIC) WA VT Zone 2 – AdvanceMed ME ND MT WI Zone 6 - Protested NH OR MI ID MN MA SD Zone 3 – Cahaba Safeguard Administrators, LLC NY WY Zone 1 – SafeGuard Services LLC PA RI IA CT NE OH NJ IN DE NV WV UT IL VA CO MD KS KY MO DC Zone 4 – Health Integrity, LLC TN NC CA OK Zone 5 – AdvanceMed AR SC AZ NM AL GA MS Zone 7 – SafeGuard Services LLC Zone 2 - AdvanceMed TX LA AK PR HI

24. SafeGuard Services, LLC. SafeGuard Services (SGS) A Program Safeguard Contractor (PSC) New England Benefit Integrity Support Center (NE BISC) Responsibilities: Identify Reduce Develop

25. PSC/ZPIC and MAC Functions

26. PSC/ZPIC Role • Investigate • Develop • Conduct • Perform • Identify

27. PSC/ZPIC Activities • Request medical records and documentation • Conduct interviews • Conduct onsite visits • Identify the need for a prepayment or auto-denial edit and refer these edits to the MAC for installation • Withhold payments

28. Medicare Administrative Contractor’s Role • The MAC retains traditional contractor functions including: • Claims processing • Provider outreach and education • Recouping monies lost to the Trust Fund • Medical review • Complaint screening • Claims appeals • Claim payment determination • Claims pricing • Auditing provider cost reports

29. Voluntary Self Disclosures • Upon noticing a concern of potential fraud or abuse, a provider should notify law enforcement and/or CMS with the use of a voluntary self disclosure of the facts • These disclosures are usually coupled with a sum of money equal to the potential overpayment • The Fraud Enforcement and Recovery Act (FERA) of 2009 expanded the liability potential under the False Claims Act (FCA) • Created an affirmative duty to refund overpayments under FCA

30. Investigations and Cases

31. Case Development • Many cases are initiated as complaints or proactive projects • Complaints may either develop into investigations or be closed • Investigations could end in administrative actions and closed or referred to law enforcement as cases • Although an investigation is closed, follow up will occur • A large percentage of complaints end with a resolution other than referral to law enforcement

32. Case Referral to Law Enforcement • When the investigator has substantiated the potential for fraud, the case is referred to the Office of Inspector General • Fraud cases are considered for criminal prosecution and/or civil remedy • Many cases are resolved with civil monetary penalty settlements with the OIG or False Claims Act settlements with the DOJ • Cases are prosecuted by the Department of Justice (DOJ) but occasionally the DOJ will work with the State Attorney General

33. Administrative Sanctions • Overpayment recovery and provider education • Revocation of assignment privileges • Referral to State licensing boards • Civil Monetary Penalty (CMP) – up to $10,000 for each claim • Suspension of payment • Any administrative actions on cases accepted by law enforcement are coordinated with CMS

34. Compliance Contractors

35. Comprehensive Error Rate Testing (CERT) • As part of the Improper Payments Information Act of 2002 the CERT Program was established in November 2003 • “Pay It Right” • A primary goal of contractors is to pay the right amount to the right provider for covered and correctly coded services • CERT helps contractors meet that goal by randomly sampling and reviewing claims submitted to Medicare by looking for submission errors that would prevent payment, and contacting providers to resolve those issues

36. Measurements and Reports • CERT measures, and works to improve, the quality and accuracy of claim submissions • CERT detects local, regional, and national error rate patterns • Provider Education • Reduce the National Medicare Fee For Service paid claims error rate which is reported yearly in both CMS’s and the Department of Health and Human Services’ audited financial reports

38. J14 Approach Overview

39. Recovery Auditors • Once called Recovery Audit Contractors (RACs) • Established by the Medicare Modernization Act of 2003 • Demonstration limited to California, Florida and New York • Tax Relief and Health Care Act of 2006 made the Recovery Auditors permanent and required their expansion beyond the demonstration states

40. Recovery Auditors VT WA HealthDataInsights Inc.** Performant Recovery Inc.* CGI Technologies and Solutions Inc. ME ND MT NH OR ID MN MA SD NY WI MI Region A WY PA RI IA CT Region B NE Region D OH NJ IN DE NV WV UT IL VA CO MD KS KY MO DC TN NC CA OK AR SC AZ Region C NM Connolly Inc. AL GA MS TX LA AK PR FL HI

41. Recovery Auditor Requests • Recovery Auditors request records from the providers to perform their audits • RA reviews are bound by • Medicare policies • NCDs • LCDs • Manual Instructions

42. Recovery Auditor Reviews • Recovery Auditors utilize: • The same policies as Medicare claims processors • Recovery Auditors perform two types of review: • Automated • Complex • Reviews can focus on claims with paid dates less than three years old

43. The Recovery Audit Review Process • Issue selected for review • CMS approves issue • RA requests claims • RA reviews documentation (complex review) or claim (automated review) and makes determination • If an error is found, a file is sent to the Claims Processing Contractor (FI, Carrier, MAC) to be adjusted for over or underpayment

44. Recovery Auditor Reviews (continued) • Recovery Auditors are paid based on a percentage of recovery • Generally only 5% of Recovery Auditor determinations are overturned on appeal • Potential fraud is referred to the PSCs/ZPICs

45. Recovery Auditor Reviews The RA for Region 4 is Performant Recovery, Inc. www.dcsrac.com • Please visit their website for • Issues under review • Forms and Sample Documents • FAQs • Review Provider Contact Information for accuracy

46. Recovery Auditor Expansion • The Affordable Care Act of 2010 requires states to establish Medicaid Recovery Auditors • Medicaid state plan amendments have been submitted by all states and most have been approved in March 2012 • There are plans to expand the Recovery Auditors to Medicare Part C and Part D

47. Center for Program Integrity • The Affordable Care Act enacted on March 23, 2010 caused a realignment on April 11, 2010 to create the Center for Program Integrity (CPI) • Consolidates program integrity efforts of Medicare and Medicaid • Move away from “pay and chase” and focus more on prepayment prevention efforts • Fraud Prevention System (FPS)

48. Unacceptable Billing Practices Fragmenting (unbundling) of procedure codes to obtain additional reimbursement Indicating “Signature on File” in the beneficiary signature field of the CMS-1500 or electronic submissions, when no patient signature authorization forms are maintained in the provider’s office Intentionally using a “dummy” address for the beneficiary on the Form CMS- 1500 or electronic submissions Submitting charges to Medicare for services that were advertised as a “free exam.” Billing for items/services before they were delivered/performed Billing for non-covered services under a covered procedure code Ping-ponging For example, providers of different specialties sharing the same patients for services that are not reasonable and necessary

49. IMPROPER WAIVERS Routine waiver of deductibles and copayments by charge-based providers, practitioners, or suppliers is unlawful because it results in : False claims Violations of the anti-kickback statute Excessive utilization of items and services paid for by Medicare

50. Ten Tips For Protecting Your Practice TIP #1 PROTECT YOUR PROVIDER IDENTIFICATION NUMBER(S) TIP #2 ASSIGN PROCEDURE CODES YOURSELF TIP #3 DOCUMENT ALL SERVICES RENDERED TIP #4 USE CAUTION WHEN SIGNING CERTIFICATES OF MEDICAL NECESSITY