Combating Healthcare Fraud

Martha A. Stearns, RN, BSN, CPCClinical Investigator, MVP HealthcareSpecial Investigations Unit

Agenda

Definition of Fraud vs. Abuse Types of Provider and Member Fraud Fraud at the National Level Fraud at the Local Level Examples of SIU Investigations

Fraud and Abuse Definitions

Fraud – Any type of intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to himself or some other person.

Abuse – Provider practices that are inconsistent with sound fiscal, business, or medical practices, and which result in unnecessary expenses or costs to an insurer, or reimbursement for services that are not medically necessary and/or fail to meet professionally recognized standards for health care.

Types of Suspect Provider Activity

Services or supplies billed but not provided

Diagnosis or service that is misrepresented

Duplicate claim submissions Up coding Improper use of modifiers Unbundling

Suspect Member Activity

Forged or altered documentation Multiple pharmacies/doctor

shopping Eligibility Issues Identity Theft

So How Big is the Problem??

Your Wasted Health Care Dollars

The United States spends more than $2 trillion on health care every year. Of that amount, the National Healthcare Anti-Fraud Assoc. (NHCAA) estimates conservatively that at least 3%-or more than $60 billion each year-is lost to fraud.

A few NHCAA Headlines for AprilIn the News

04.30.15 Miami: Physician sentenced for role in $5.5 million Medicare fraud scheme....

04.30.15 Los Angeles: Hawthorne Woman Sentenced to More Than Six Years in Federal Prison for...

04.30.15 Boston: Maine Nursing Home Operator to Pay $300,000 to Resolve Allegations...

04.29.15 Newark: New Jersey Doctor Sentenced to One Year and One Day in Prison for Taking Bribes...

04.27.15 Houston: Husband and wife sentenced for roles in $9 million health care fraud scam....

And the Lead Story on the FBI Website in April……..

Rochester Man Sentenced for Drug and Health Care Fraud

Offenses

U.S. Attorney’s Office April 17, 2015

ROCHESTER, NY—U.S. Attorney William J. Hochul, Jr. announced today that Michael Marcera, Sr., 57, of Rochester, NY, who was convicted of conspiracy to possess oxycodone with the intent to distribute and health care fraud, was sentenced to time served (97 months in prison) by U.S. District Judge Charles J. Siragusa..

Assistant U.S. Attorney Frank H. Sherman, who handled the case, stated that between January 2003 and February 2007, the defendant participated in a criminal scheme with others to obtain from a medical doctor prescriptions for oxycodone, a controlled substance, by representing to the medical doctor that the medication was medically necessary, while knowing that the medication, in fact, was not medically necessary.

After obtaining the prescriptions from the medical doctor, Marcera and others had each prescription filled at a pharmacy and then sold the medications for profit. The victim health care insurance programs (Excellus BlueCross BlueShield, Preferred Care, New York State Workers Compensation [ACE ESIS Inc.], and Allstate Insurance Company) reimbursed the pharmacies for the costs associated with the filling of the fraudulent prescriptions.

Aside from time served, the defendant was also ordered to pay restitution totaling $216,000 to Excellus BlueCross BlueShield, Preferred Care,New York State Workers Compensation [ACE ESIS Inc.], and Allstate Insurance Company

The Fraud Busters

What agencies are empowered to investigate and/or prosecute fraudulent or abusive Healthcare schemes?

Fighting Fraud at the National Level

The FBI, U.S. Postal Service, Medicare, Medicaid and other federal agencies are heavily involved in combating insurance fraud.

Pt. Protection and Affordable Care Act of 2010 (ACA)

Provides for a $350 million dollar commitment to prevent fraud through instituting more advanced screening and prevention techniques.

Made obstructing a fraud investigation a crime;

Increased the federal sentencing guidelines for offenses by 20 to 50% for crimes involving more than $1 million in losses.

Provisions of the Health Care Bill

More detailed screening of new providers. New software to allow CMS and the states to

identify potential fraudulent trends. This process works much like the one in use

by your credit card company. Ever get a call from them inquiring about a recent purchase? It’s because a computer program identified something unusual or that was inconsistent with previous purchases.

The government will be able to temporarily suspend payment to any provider thought to be engaging in fraudulent activity.

Medicare will analyze variables such as beneficiary, provider and services, and start an investigation of questionable billing before more claims get paid.

This is an attempt to limit potentially fraudulent payments at the front end, and eliminate the need to chase after payments (only to find the scammers have either moved to a new location or fled the country).

Pay and Chase is Ineffective and time Consuming

Additional ACA Provisions

Mandatory anti-fraud compliance plans for providers and suppliers.

Increased funding for staffing for legal enforcement.

Broader authority for Recovery Audit Contractors (RAC) to correct over and under payments.

Greater penalties for those engaging in fraud activities.

HHS and the Justice Dept.

Joint actions by these 2 agencies include:

the Health Care Fraud Preventions and Enforcement Action Team (HEAT), and;

the Medicare Fraud Strike Force.

HEAT in ACTION

Since their inception in March 2007, Strike Force operations in nine locations have charged almost 1,900 defendants who collectively have falsely billed the Medicare program for almost $6 billion.

In addition, CMS, working in conjunction with HHS-OIG, has suspended enrollments of high-risk providers in five Strike force locations and has removed over 17,000 providers from the Medicare program since 2011.

27 Medical Professionals, Including 16 Doctors, Charged with Health Care Fraud

May 13, 2014 A nationwide takedown by the Medicare

Fraud Strike Force operations in six cities has resulted in charges against 90 individuals for approximately $260 million in false billing

This coordinated takedown was the seventh national Medicare fraud takedown in Strike Force history.

The Charges

The defendants charged are accused of various health care fraud-related crimes, including conspiracy to commit health care fraud, violations of the anti-kickback statutes and money laundering.

In many cases, court documents allege that patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed.

More Specifics - Miami

Two defendants were charged in connection with a $23 million pharmacy kickback and laundering scheme. Court documents allege that the defendants solicited kickbacks from a pharmacy owner for Medicare beneficiary information, which was used to bill for drugs that were never dispensed. The kickbacks were concealed as bi-weekly payments under a sham services contract and were laundered through shell entities owned by the defendants.

Los Angeles

Eight defendants were charged in Los Angeles for their roles in schemes to defraud Medicare of approximately $32 million.

In one case, a doctor was charged for causing almost $24 million in losses to Medicare through his own fraudulent billing and referrals for durable medical equipment, including over 1,000 expensive power wheelchairs, and home health services that were not medically necessary and frequently not provided.

Detroit

Seven defendants were charged for their roles in fraud schemes involving approximately $30 million in false claims.

In one case, four individuals, including a doctor, were charged in a sophisticated $28 million fraud scheme, where the physician billed for expensive tests, physical therapy and injections that were not necessary and not provided..

And let’s not forget N.Y.S.

In Brooklyn, New York, the Strike Force announced an indictment against Syed Imran Ahmed, M.D., in connection with his alleged $85 million scheme involving billings for surgeries that never occurred; Dr. Ahmed was arrested and charged with health care fraud and making false statements.

Healthcare Fraud’s “Most Wanted List”

The Dept. of Health and Human Services of the OIG has created a list of the top 10 suspects being actively sought on charges of submitting $124 million worth of fraudulent claims to CMS and Medicaid. In all, they are currently seeking more than 170 fugitives.

You can access this site at http://oig.hhs.gov/fugitives/

Statutes Used to Indict and Prosecute for Fraud

Health care fraud Embezzlement of

theft in connection with health care

False statements relating to health care

Obstruction of a Federal health care fraud investigation

Conspiracy to commit fraud

False Claims Bribery Kickbacks Money laundering Wire Fraud Mail Fraud

Anti-kickback Statute

Prohibits: Knowingly and willfully

soliciting, receiving, offering or paying remuneration (including any kickback, bribe or rebate) for referrals for services that are paid in whole or in part under a federal health care program (which includes the Medicare program).

Penalties: Fines up to $25,000

and/or imprisonment up to five years

Stark Law

Prohibits: Physicians from referring

patients to an entity with which the physician or a physician’s immediate family member has a financial relationship .

Penalties:

Up to $15,000 for each service provided

Up to $100,000 for entering into an arrangement or scheme

False Claims Act

One of the most powerful tools in this effort is the False Claims Act.

Since January 2009, the Justice Department has recovered a total of more than $14.8 billion through False Claims Act cases, with more than $10.8 billion of that amount recovered in cases involving fraud against federal health care programs.

One Recent Example in NYS

On Tuesday, August 27, 2013, the Justice Dept. released the following statement:

“MRI Diagnostic Testing Company, Imagimed LLC, and Its Former Owners and Chief Radiologist to Pay $3.57 Million to Resolve False Claims Act Allegations”

New York-based Imagimed LLC, the company’s former owners, William B. Wolf III and Dr. Timothy J. Greenan, and the company’s former chief radiologist, Dr. Steven Winter, will pay $3.57 million to resolve allegations that they submitted to federal healthcare programs false claims for magnetic resonance imaging (MRI) services, the Justice Department announced today. Imagimed owns and operates fifteen MRI facilities, located primarily in New York state, under the name “Open MRI.”

Allegedly, from July 1, 2001, through April 23, 2008, Imagimed, Greenan, Wolf and Winter submitted claims to Medicare, Medicaid and TRICARE for MRI scans performed with a contrast dye without the direct supervision of a qualified physician.

Since a potential adverse side effect of contrast dye is anaphylactic shock, federal regulations require that a physician supervise the administration of contrast dye when it is used for an MRI.

It was also alleged that from July 1, 2005, to April 23, 2008, Imagimed, Greenan, Wolf and Winter submitted claims for services referred by physicians with whom Imagimed had improper financial relationships.

In exchange for these referrals, Imagimed entered into sham on-call arrangements, provided pre-authorization services without charge and provided various gifts to certain referring physicians, in violation of the Stark Law and the Anti-Kickback Statute.

The Local Connection

Dr. Greenan applied for participation with Preferred Care about 10 years ago.

He was denied as his facility, Open MRI, didn't have any physicians on site or plan for patients in need of emergency care.

MVP Mission Statement

“The Mission of the SIU is to objectively detect and properly resolve situations where a provider, member or other person may have defrauded or inappropriately obtained payment(s).”

Staffing and Credentials

Work within and alongside the Legal Dept.

Our Director has the Accredited Healthcare Fraud Investigators (AHFI) certification.

We have 3 Clinical Analysts, all of whom are RN’s with one or more CPC designations in addition to their nursing and professional degrees.

Staffing and Credentials (cont’d)

There are 2 non clinical investigators: a former undercover police officer and a Medicaid Fraud investigator.

And 2 analysts with extensive claims and billing experience, who utilize a computer driven investigative tool to help identify duplicate payments and unusual billing patterns.

Activities and Results

The clinical analysts/investigators investigate ~ 350 – 400 referrals a year.

Approximately $3-$5 million dollars is brought back into the company on an annual basis.

Case Examples

Let’s look at several cases of local Fraud/Abuse activity during the past year.

A Devious Dermatologist

Dr. D., a Dermatologist/Plastic surgeon in the Albany area, was found to be billing a high number of complex repairs following lesion excisions.

A Plastic Surgery coding expert reviewed numerous submitted claims from Dr. D. against the actual medical record documentation and found a pattern of up coding.

To report complex repair codes, the medical record must document that extensive undermining was done and should provide justification for its need.

If the undermining was minimal, and a layered repair was done, it falls into the intermediate repair category.

What is Undermining?

Undermining means cutting the fibrous septae that connect the skin to the underlying fascia to facilitate wound closure.

Per Dr. Alex Miller, who represents the American Academy of Dermatology on the AMA-CPT Advisory Committee, it is up to the surgeon to ethically decide when undermining has reached the “extensive” category.

The billing of complex repair codes has steadily increased over the past several years. For example, according to Medicare data for 2011, utilization of CPT code 13101 (Repair, complex, trunk; 2.6 cm to 7.5 cm) increased by almost 9 percent from 2010.

Findings of Dr. D’s MR audit

The procedure notes were found to be a template with little to no variation from one pt. to the next.

All lesions were “elliptically excised down to the subcutaneous tissue”. Then, “in order to facilitate closure and to minimize scarring, wound margins were sharply undermined, the tissue was mobilized and advanced. It was closed in a meticulous complex fashion with buried retention sutures.”

Our specialist determined that undermining the wound margins was not supported by the documentation, nor was it medically necessary based on the lesion type and size. Restitution was ordered.

But that’s not all….In the course of the investigation, another interesting finding was uncovered.

OPMC Investigation

On 2/9/10, Dr. D was convicted of misbranding a drug held for resale after shipment in interstate commerce.

Dr. D represented to his patients (and documented in their medical records) that he was treating them with Botulinum Toxin Type A, which is approved for use on humans.

Switcheroo

In fact, Dr. D injected patients with a solution of Botulinum Toxic Type A (Tri-Toxin) that had not been approved for use on human beings by the FDA.

In the signed consent forms he misrepresented the injections as “Botox”.

Investigative Findings

Dr D was found guilty of professional misconduct by committing a crime under federal law, negligence on more than 1 occasion, failure to maintain accurate records and performing services not duly authorized.

Sentence

OPMC sentenced Dr. D to 3 years probation, required him to serve 300 hours of community service, and fined him $5,000.00.

2nd Case Study

Dr. MI is a Pediatrician with a large Medicaid population, who was found to have an unusually high number of patients complaining of hearing and vision problems, and who then required additional testing.

Our audit found a high incidence of otoacoustic emission testing (OAE), visual field testing and visual evoked potential testing (VEP) billed by this office.

What Are These Tests????

2 of the tests fall under the CPT heading of Special Opthalmological Services:

“Services in which a special evaluation of part of the visual system is made, which goes beyond the services included under general opthalmological services, or in which special treatment is given.”

Investigation and Findings

We requested MR’s from 50 dates of service during the period of 1/1/11 – 5/13/13.

The office notes appeared to be computerized templates modeled after the CMS Documentation Guidelines, but with little unique, member specific documentation.

Unneccessary E&M/Testing

Most of the patients had typically been seen recently for a well child, preventative visit, then brought back for additional vision and hearing testing.

The SureSight Vision Screener

This office was found to have been using the SureSight vision screener and billing CPT 92081 (visual field exam). This screener is actually used to test for refractive error, not visual field.

The Academy of Pediatrics Pediatric Coding Newsletter June 2012 recommended using CPT 99173 (screening for visual acuity) for this test.

CPT 99173 is normally bundled into the E/M code and not paid separately.

All submitted 92081 claims were changed to 99173 and denied as global to the E/M.

Additional Indications of Problems

Upon commencing our investigation of this provider, we uncovered an OPMC action from June of 2012.

In addition to his Pediatric practice, he operated a laser treatment clinic from approx. 2008 – 2012.

In June of 2012 he was placed on probation for 3 years by the OPMC for negligence (on more than 1 occasion), incompetence (on more than 1 occasion), and failure to maintain MR’s.

OPMC Actions

“The physician shall immediately terminate all medical practice in the area of intense pulsed light treatments and laser surgery, and is prohibited from ever restarting this area of practice. While on probation, the physician may only practice medicine when monitored by a licensed physician; certified in an appropriate specialty.”

Criminal Prosecutions

SIU investigations occasionally result in criminal convictions.

In 2014, three cases ended with convictions and made the news.

Judgment Day for Surgeon

Following a 3 year investigation that included Federal investigators and insurance carriers, a convicted former orthopedic surgeon was sentenced to 4 1/2 years in federal prison after surrendering to the US Marshals.

2014 FWA Awareness Training

Phantom Surgeries

The surgeon was found guilty of operating a multi-million dollar scheme to defraud heath insurance carriers, by lying about the "nature and scope" of surgeries while working as an orthopedist for a large multi-specialty medical group.

He performed “phantom surgery”. He put pt’s under anesthesia, put a scope in, but didn't repair anything.

In addition to the criminal conviction, since 2008, more than 250 civil lawsuits have been filed against the surgeon alleging medical malpractice.

Optical Shop Owner Sentenced

The NYS Attorney General’s Office (NYS AG) prosecuted an individual on charges related to fraudulently operating as an optometrist and providing ophthalmic dispensing services without a license for either profession.

The individual, who ran the optical practice, reportedly attended optometry school but had not passed the state exams.

He pled guilty and admitted to engaging in a fraudulent scheme, and billing Medicaid and other payers for services.

He received a three-year conditional discharge on the condition he make $116,000 in restitution to the state of New York and several health insurers, including MVP. He was also sentenced to 150 hours of community service.

Insurance Broker Convicted of Fraud

An insurance agent linked to a large insurance fraud scheme through a local Chamber of Commerce, was sentenced to 6 months in a county correctional facility, 500 hours of community service, and 5 years probation. He will also be paying a $5,000 fine and lost his

insurance license.

Location, Location, Location

The scheme included enticing people in New York City, Long Island and New Jersey to buy coverage through an upstate Chamber of Commerce, because the coverage was less expensive than what was being offered in their local areas

Had this scheme not been detected early on, it could have been financially disastrous for MVP resulting in estimated annual losses of over $500,000 to $1,000,000.

The former agent was convicted of one count of scheming to defraud in the first degree, and one count of third-degree grand larceny.

The scheme’s co-conspirator and former chamber President, who was fired by the chamber several days after his arrest, pled guilty to avoid going to trial and was sentenced to a 2 year conditional discharge and fined $2,000.

How Do YOU Make the Difference?

Attentive

Alert

Educated

Conscientious