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Applying the Fraud and Abuse Laws in Digital Health

Session 250, February, 14th, 2019

Paul Westfall, American Medical Association

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Paul Westfall, J.D.

Has no real or apparent conflicts of interest to report.

Conflict of Interest

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• Learning Objectives

• Background

• Use of Digital Tools

• Better, Same, or Worse? Solutions?

• Examples

• Hype cycle technologies

PAY ATTENTION: I MAY OR MAY NOT HAVE CANDY ON ME.

Agenda

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• Identify why fraud and abuse is so pervasive in health care,

common fraud schemes, and what tools can be used to

prevent fraud and abuse

• Recognize the importance of fraud and abuse in healthcare

and its impact on health information technology

• Display knowledge that the fraud and abuse laws can apply

to health information technology and that these laws carry

civil and criminal penalties

• Compare and contrast program integrity issues from the

traditional health care world to the digital health care world

Learning Objectives

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• Fraud = intentional deception to secure unfair or unlawful gain

– Services not rendered, kickbacks/bribes, unnecessary tests, upcoding, unbundling

• Abuse/Waste = practice that’s inconsistent with standards that results in unnecessary cost

– Insufficient documentation, medical necessity, incorrect coding, no documentation

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The state of Healthcare

• Medicare Fee-for-Service: $40 billion in improper payments (annual)

– Insufficient documentation: accounts for 2/3rds of improper payments

• Physicians: $8.7 billion (annual)

• Federal Law Enforcement: $5.8 billion in funding (past 7 years)

– Recovered $25.8 billion in fraud (past 7 years)

• Just Medicare and just Fee-for-Service

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Fraud, waste, and abuse

• Why so much fraud, waste, and abuse in health care?

– Nature of the business

– Lack of internal controls

– Lack of education

• Targets

– Aging populations and high cost patients (chronic diseases: Alzheimer’s, dementia, diabetes)

– High volume and high concentration (nursing homes, home health)

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The Laws and Penalties

Law Translation

False Claims Act Don’t lie to the

government

Civil Monetary

Penalties

Seriously, don’t lie (and

more)

Stark/Anti-

Kickback

Don’t get stuff in return

for referring patients

Exclusions Death knell to your

career in health care

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What does every healthcare fraud scheme need in order to be successful?

A. Disgruntled employees

B. A patient and a provider identify

C. Threats of physical violence

D. Capability to launder money

POP QUIZ

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What does every healthcare fraud scheme need in order to be successful?

A. Disgruntled employees

B. A patient and a provider identify

C. Threats of physical violence

D. Capability to launder money

POP QUIZ

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Keys to Preventing Fraud and Abuse

• Your Conduct

• Your Employees/Contractors

• Your Compliance Program

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• Is it stuff?

• Are you using a digital health technology to increase value and to better coordinate care for a Medicare beneficiary?

– AKS/Stark violation FCA liability

– Don’t forget about your state!

• Enhance current schemes?

Use of Digital Health Technologies make you vulnerable?

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• Perception of digital being worse?

– Easier to commit fraud?

– Less oversight from traditional oversight entities?

– New players unaware

• What does this perception mean?

– More oversight

– More prescriptive requirements up front

– Less desire to reimburse from health plans

• Or is it better? Same? Making excuses?

Traditional v. Digital

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Better

• Increase data accuracy

– Less human error

– Easier to show fraud (e.g., upcoding)

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Better

• Data: IP Address, geo-location, device identity

• Automatically creates background transactions

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Same

•Lying

•Cheating

•Stealing

•Not invasive

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Same

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Worse

• Costs less to look legit

How do we know that the

individual who is

examining Elroy’s throat

is a healthcare provider?

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Worse?

• Easier for unlicensed individuals to provide care

• Enforceability of laws and regulations across state lines and country borders

• More accurate data means more potential

scrutiny from the government

– Codes that use time as a proxy for

intensity

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• Affiliation with traditional medicine

• Established patients (e.g., virtual check-in)

• Controls in place for checking licensure or

exclusion and duplicate payments across

payment systems

• Interstate Medical Licensure Compact

Potential solutions?

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Imaginary?

• Perceived increase in utilization in using digital medicine?

– Need to educate that digital health may increase access

• More mobile, easier to steal?

– “Mobile devices in the health care sector remain particularly vulnerable to theft and loss”

• Roger Severino, Office of Civil Rights Director, April 24, 2017

– Need to educate

• Mobile may not mean digital medicine. It could be just a laptop from a hospital.

• Fallacy of physical security

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Home Health Example

• No actual home health therapy is provided. The patient is asked to sign forms that verify a nurse or staff showed up at her home and provided services.

• To justify charging for a nurse or staff, a fraudulent physician who is not the beneficiary’s primary doctor may falsely certify that the beneficiary is an insulin-dependent diabetic and cannot inject himself.

• Unscrupulous physicians may also falsely certify that a beneficiary is home bound. In exchange, the beneficiary will be offered cashon a monthly basis or provided a home health aide that only prepares meals or cleans.

• Better, same, or worse?

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Better• Data accuracy

– Digital medicine provides data of glucose levels without

human error or manipulation

– Measure glucose levels to determine if insulin dependent

• Automatic data processing

– Compare claims data to see if there is any data being

exchanged between computers

– Help determine whether services are actually performed

• IP Address

– May help determine if patient is homebound

Audience Feedback

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Same• Lying, Cheating, Stealing

– As it was in the traditional, and now, and ever shall be in the digital....

• From the example

– False certifications

– Kickbacks

Audience Feedback

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Audience Feedback

Worse

• Cost less to look legit

• Easier for unlicensed individuals to provide care

• Enforceability of laws and regulations across state lines and country borders

• Factors figuring into whether digital medicine is potentially worse will probably be cross applicable regardless of service type

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Blockchain

• Immutable, distributed ledger

• Patients can control data

• Well, hello beneficiary inducement CMP!

Artificial Intelligence

• Nefarious and unintended

• Fraud detection

• Type of remuneration?

• New frontier with a lot of unknowns

• How do you regulate something that's constantly changing?

Blockchain and AI

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• Identify why fraud and abuse is so pervasive in health care,

common fraud schemes, and what tools can be used to

prevent fraud and abuse

• Recognize the importance of fraud and abuse in healthcare

and its impact on health information technology

• Display knowledge that the fraud and abuse laws can apply

to health information technology and that these laws carry

civil and criminal penalties

• Compare and contrast program integrity issues from the

traditional health care world to the digital health care world

Revisiting the Learning Objectives

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Paul.Westfall@ama-assn.org

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