Fraud, Waste and Abuse

Fraud, Waste and Abuse CBO Purchased Care Denver, Colorado

Fraud, Waste and Abuse Overview • What is fraud, waste and abuse? • Who does it impact? • Pertinent Laws • How big of problem is it? • Who is responsible? • Where does it happen? • “Red Flags” • Preventing • Reporting

Fraud, Waste and Abuse Definitions • Health Care Fraud- the intentional misrepresentation of a material fact on a health care claim in order to receive untitled payment. • Health Care Waste- over-utilization of services and the misuse of resources that result in unnecessary costs to a health care program. • Health Care Abuse- excessive or improper use of services that are inconsistent with acceptable business medical practice and that result in unnecessary costs.

Fraud, Waste and Abuse Impact of Health Care Fraud • Federal Government – Millions lost each day. Billions lost each year. • Taxpayers –Rising health care premiums and higher taxes. • Beneficiaries – Subjected to unnecessary or unsafe procedures or may be victims of identity theft. • Medical Professionals –Dignity and credibility are undermined for the vast majority of honest, ethical providers. Health care fraud, according to FBI Director, is “not a victimless crime—every person who struggles to pay for health care benefits; every older person who worries about Medicare’s ability to cover them; every taxpayer who helps fund these programs—they are all victims.”

Fraud, Waste and Abuse FRAUDULENT TIMES Cardiologist Sentenced to 12 ½ Years in Federal Prison June 2002 A Chicago cardiologist was sentenced to 12-1/2 years in federal prison and was ordered to pay $16.5 million in fines and restitution after pleading guilty to performing 750 medically unnecessary heart catheterizations, along with unnecessary angioplasties and other tests as part of a 10-year fraud scheme.

Fraud, Waste and Abuse Federal False Claims Act (31 U.S.C. §§ 3729-3733) • Knowingly presents, or causes to be presented, to an officer or employee of the United States Government a false or fraudulent claim for payment or approval; • Knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved • Subject to civil penalties of not less than $5,000 and not more than $10,000, plus 3 times the amount of damages the Government sustains because of the act of that person.

Fraud, Waste and Abuse Criminal Penalties for Acts Involving Federal Health Care Programs (42 U.S.C. § 1320a-7b) • Whoever knowingly and willfully makes or causes to be made any false statement or representation of a material fact in any application for any benefit or payment under a Federal health care program; • guilty of a felony and upon conviction thereof fined not more than $25,000 or imprisoned for not more than five years or both • guilty of a misdemeanor and upon conviction thereof fined not more than $10,000 or imprisoned for not more than one year, or both.

Fraud, Waste and Abuse Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)) • Knowingly and willfully solicits, receives or offers to pay any remuneration (including any kickback, bribe, or rebate) in return for referring or to induce such person to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made under a Federal health care program • guilty of a felony and upon conviction thereof fined not more than $25,000 or imprisoned for not more than five years or both

Fraud, Waste and Abuse HIPAA (Health Insurance Portability and Accountability Act of 1996) • Governs more than patient privacy • Establishes health care fraud as a federal criminal offense • Formed the Medicare Integrity Program (MIP) • MIP receives more than $800 million annually to address fraud and abuse.

Fraud, Waste and Abuse HIPAA Provisions Medicare Integrity Program includes 5 areas of focus: • Medical/Utilization Review of claims • Provider Cost Report Audit and Reimbursement Activities • Benefit Integrity – fraud identification • Secondary Payer – primary payment determination • Provider Education

Fraud, Waste and Abuse Daily Fraud News HEALTH CARE NEWS JULY 2010 $280 Million Dollar Fraud Takedown Ninety-four people in five cities charged with defrauding Medicare, the Department of Justice and other federal agencies. The defendants are charged with conspiring to submit over $280 million in false claims to the federal health care program designed to aid the elderly. Charges include filing fraudulent claims for HIV/infusion services, home health care, physical therapy and durable medical equipment.

Fraud, Waste and Abuse The Key Statistics • Health care spending was 17.3% of the Gross Domestic Product (GDP) in 2009 • Translates into more than $2.47 trillion in health care expenditures. • CMS predicts total U.S. health spending to grow to $4.5 trillion by 2019.

Fraud, Waste and Abuse The Key Statistics • Health care industry experts estimate fraud accounts for 3% to 10% of all health care spending • Conservative Estimate: • $2.47 trillion * .03 = $74.1 billion spent on fraud yearly • $74.1 billion/365 days = $203+ million daily

Fraud, Waste and Abuse The Key Statistics The health care system wastes between $600 billion and $850 billion annually. • Unnecessary Care – 40% of health care waste • Fraud – 19% of health care waste • Administrative Inefficiency - 17% of health care waste • Health Care Provider Errors – 12% of health care waste • Preventable Conditions – 6% of health care waste • Lack of Care Coordination – 6% of health care waste -Thomson Reuters October 2009-

Fraud, Waste and Abuse THE FRAUD DISPATCH Headline News - Since 1802 A MAJOR CRACKDOWN June 24, 2009 Fifty-Three Charged with Health Care Fraud Combined, the subjects are accused of conspiring to submit more than $50 million in false claims to Medicare. The arrests involved at least nine Medicare provider companies and a number of company executives, doctors, therapists, medical recruiters, medical assistants, and even some Medicare beneficiaries who were willing to go along with the schemes in exchange for money.

Fraud, Waste and Abuse Major Organizations in the Fight Against Fraud

Fraud, Waste and Abuse Who Commits Health Care Fraud

Fraud, Waste and Abuse Who Commits Health Care Fraud and Abuse? • Practitioners, office staff, patients and employees. Anyone who knowingly benefits from an act of insurance fraud is equally guilty of the offense of health care fraud. There's a group of people who really love the U.S. health care system -- the fraudsters, scammers and organized criminals who are bilking the system of as much as $175 billion a year. –CNNMoney.com The defendants arrested today include doctors, nurses, health care company owners and a medical biller who alone was charged with submitting more than $49 million in fraudulent services. –ABCNews.com

Fraud, Waste and Abuse • Providers who intentionally engage in any of the following are committing health care fraud, waste and abuse. • Bill for services: never rendered, inappropriate/unnecessary services, or free services • Falsify record to suggest on-going medical services • Forge a physician’s signature on plans of care • Alter information on medical documentation • Change or falsify the diagnosis or procedure code on a claim to receive maximum payment • Change dates of service for double billing • Routinely send duplicate claims or bill both the VA and another payer, in an effort to receive payment greater than the allowed.

Fraud, Waste and Abuse • Individuals and/or VHA employees who engage in any of the following acts commit health care fraud, waste and abuse. • Consent with providers to submit claims for services not received or not necessary • Fabricate claims • Alter submitted medical documentation of any type • Provide false application data • Change a provider’s address to intercept provider payments

Fraud, Waste and Abuse Where Does Health Care Fraud Take Place? • Prime target areas for health care fraud are those with a great deal of government (Medicare, Medicaid, TRICARE, CHAMPVA) recipients, such as Miami's elderly population, or those where a large portion of the population are receiving government health care benefits, such as Detroit. • "Miami is the 'Ground Zero' for a lot of where these schemes begin, and they're scattering like cancer to California, Detroit and Houston.” – Rob Montemorra, chief of the FBI’s Health Care Fraud Unit

Fraud, Waste and Abuse Approximate Amount Spent By Medicare on Fraud Top 10 States* *Information gathered from the Kaiser Webpage

Fraud, Waste and Abuse Red Flags– Fraud • Altered bills or receipts or medical records • Upcoding • Billing for services and/or supplies that were not rendered • Unbundling • Trends of duplicate billings

Fraud, Waste and Abuse Red Flags - Abuse • Overutilization of controlled substances • Excessive charges • Billing for services not medically necessary • Improper billing practices • Refusal to furnish or allow the government access to patient records related to a claim

Fraud, Waste and Abuse Dual Fee Schedules and Unusual Charges

Fraud, Waste and Abuse Altered Claims

Fraud, Waste and Abuse Boiler Plate Submission Maximum Reimbursement Community Hospital1234 1st Street, Any Town USATele – Fax (808) 000-1234 • Patient’s Clinical Records (OPD) • Name: Patient One • DOB: xx-xx-2000 • DOS: 03 December 2009 • Chief Complaints: • Difficulty in swallowing, abdominal pain with abdominal discomfort and body weakness • History of Present Illness: • The present condition started 3 days PTC as mild pain over the throat area. This is associated with difficulty in swallowing. She took Paracetamil 500 mg tab and gargled warm saline solution which gave temporary relief. Until a day PTC, the patient developed chills and fever. Simultaneously, the patient started to experience abdominal pain and discomfort accompanied by nausea and vomiting. She also felt body general body weakness and a constant headache. This prompted the patient to seek treatment.

Fraud, Waste and Abuse Boiler Plate Submission Maximum Reimbursement Community Hospital 1234 1st Street, Any Town USATele – Fax (808) 000-1234 • Patient’s Clinical Records (OPD) • Name: Patient Two • DOB: xx-xx-2001 • DOS: 03 December 2009 • Chief Complaints: • Difficulty in swallowing, abdominal pain with abdominal discomfort and body weakness • History of Present Illness: • The present condition started 3 days PTC as mild pain over the throat area. This is associated with difficulty in swallowing. He took Paracetamil 500 mg tab and gargled warm saline solution which gave temporary relief. Until a day PTC, the patient developed chills and fever. Simultaneously, the patient started to experience abdominal pain and discomfort accompanied by nausea and vomiting. He also felt body general body weakness and a constant headache. This prompted the patient to seek treatment.

Patient One Social History: The patient is currently in the 2nd grade. She is out going and friendly and gets along well with her peers in school where she performs well. She has a good relationship with her family. Mental Status: She is conscious, coherent, oriented to time and space, properly dressed, cooperative, responds to questions intelligently, has good memory both for recent and past events, not depressed, has appropriate affect, claims no psychiatric consult up to this date. Patient Two Social History: The patient is currently in the 3rd grade. He is out going and friendly and gets along well with his peers in school where he performs well. He has a good relationship with his family. Mental Status: He is conscious, coherent, oriented to time and space, properly dressed, cooperative, responds to questions intelligently, has good memory both for recent and past events, not depressed, has appropriate affect, claims no psychiatric consult up to this date. Fraud, Waste and Abuse

Patient One Physical Exam Eyes: Pupils equal in size, reactive to light and accommodation directly and consensually, pale conjunctiva, anicteric sclera Ears: Clean ear canals, tympanic membranes intact, not bulging, no perforation, good acuity to whispered voice Nose: Septum midline, no discharge, no obstruction, negative for pressure pain HR: 98 Resp: 18 BP: 107/64 Temp: 36.6 Patient Two Physical Exam Eyes: Pupils equal in size, reactive to light and accommodation directly and consensually, pale conjunctiva, anicteric sclera Ears: Clean ear canals, tympanic membranes intact, not bulging, no perforation, good acuity to whispered voice Nose: Septum midline, no discharge, no obstruction, negative for pressure pain HR: 98 Resp: 18 BP: 107/64 Temp: 36.6 Fraud, Waste and Abuse

Fraud, Waste and Abuse

Fraud, Waste and Abuse Million Dollar Mobility

Fraud, Waste and Abuse The Fraudulent post Rent a patient Thursday, Apr 24 2003 Need some quick cash? Everyone makes a killing when doctors and clinics scam the insurance companies. He felt "healthy as a horse" before he agreed to use his body as an instrument for insurance fraud. But during a five-month stretch last year, the 36-year-old Phoenix resident endured the following medical procedures: a circumcision, removal of his sweat glands, a nose operation, a colonoscopy, and an endoscopy. He admits he needed none of those procedures. But, he says, a work associate persuaded him to travel for the operations, again and again. The associate moonlights as a health-care coyote -- a ubiquitous middleman for surgical clinics that are performing unnecessary, sometimes risky medical procedures on "rent-a-patients“.

Fraud, Waste and Abuse Doctor Shopping • In 31 days, 6 different providers wrote 6 prescriptions for controlled substances

Fraud, Waste and Abuse Fraud Prevention “How To’s” • Prevention awareness training • Providers • Beneficiaries • Employees • Prepayment claim review (target based on Red Flags) • Claim Scrubbing/Code editing software • Interagency information sharing

Fraud, Waste and Abuse Tools and Resources for Fraud Prevention • Internal and External Controls • Review of Corporate Integrity Agreements • Code auditing software • Data mining • Trending and analysis • Post-payment claim review

Fraud, Waste and Abuse Fraud Prevention Resources • Networking • National Health Care Anti-Fraud Association (NHCAA) • www.nhcaa.org • Association of Certified Fraud Examiners (ACFE) • www.acfe.com • Other Federal Agencies • VA Office of Inspector General - www.vaoig.gov • Federal Bureau of Investigations - www.fbi.gov • TRICARE - www.tricare.mil • Department of Health and Human Services - www.hhs.gov

Fraud, Waste and Abuse Healthcare Fraud(as defined by U.S. Code Title 18. Chapter 63 > § 1347) Knowingly and willfully executing, or attempting to execute, a scheme or artifice— (1) to defraud any health care benefit program; or (2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program, in connection with the delivery of or payment for health care benefits, items, or services. Incorrect Billing or Errors. Includes healthcare fraud. This refers to any claim filed with codes incorrectly in such a manner that would cause the provider to be paid incorrectly, whether the error was intentional or not. This is often referred to as “fraud, waste, and abuse” and sometimes simply as “fraud.” Overpayment.Includes payments made due to Incorrect Billing or Errors. An overpayment occurs when a provider receives too much payment for a service (e.g. multiple payments for the same service/duplicate billing, inappropriate upcoding).This also occurs when another payer (health insurer, automobile accident carrier, etc.) should have paid the claim. Anti-Fraud. Criminal units of government including FBI, State police, attorneys general Program Integrity. Addressed by SIUs and support vendors. Payment Accuracy. Addressed by SIUs, other units within payers, and support vendors.

Fraud, Waste and Abuse • VA Purchased Care Attn: Purchased Care Program Integrity, 3773 Cherry Creek N Dr #910 Denver, CO 80209-3812 • Phone: 1-800-488-8244 Monday – Friday / Ref: VHA Purchased Care Programs • Fax: 1-303-371-7771 / Attn: Purchased Care Program Integrity Office • David Isaacks at 1-785-925-0605 or david.isaacks@va.gov • Office of Inspector General, HHS TIPS Hotline, P.O. Box 23489 Washington, DC 20026 • Phone: 1-800-HHS-TIPS (1-800-447-8477) • By Fax: 1-800-223-2164 • By E-Mail: HHSTips@oig.hhs.gov Fraud, Waste and/or Abuse Reporting

Fraud, Waste and Abuse The VAOIG Hotline # is 1-800-488-8244. You may also contact the VA OIG by mail, e-mail and FAX: Write the VAOIG Hotline: VA INSPECTOR GENERAL HOTLINE (53E) P.O. BOX 50410 WASHINGTON, DC 20091-0410 E-mail the VAOIG Hotline: vaoighotline@va.gov FAX the VAOIG Hotline: (202) 565-7936 Fraud, Waste and/or Abuse Reporting

Fraud, Waste and Abuse