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Posts in the ‘Health Care Fraud’ Category

A Heavy Week For The Police Blotter

Posted by J. Paul Spencer, CPC, CPC-H in Health Care Fraud

When I was growing up, there used to be a phrase for a person or a business enterprise that could be trusted to do the right thing. That phrase was “on the level”. In the grand scheme of things, my life experience to date is fairly short, so it is distressing to me that the idea of someone being “on the level” seems to be some kind of quaint notion from yesteryear. Once upon a time, it was fairly easy to distinguish what was legitimate and what was too good to be true.

Unfortunately, in modern times, we are surrounded on a daily basis with scams. From the spam in our e-mail inbox to the “price rollbacks” offered by virtually every retailer, there is very little that I see across the landscape as “on the level”. Even adding something to your meal from the fast food menu for “another dollar” seems like an honest bargain, until you realize two years later that you can’t fit through the doorway without coating your hips and shoulders with margarine.

After a while, what tends to happen is people become numb to the ugliness around them and get consumed by it, rather than feeling like they are spending their lives swimming upstream under the delusion of something wonderful greeting you at the river’s source, even though it never comes into view. Maybe it’s all the psychedelic music I’ve cheerfully listened to in my life, or maybe it’s my love of oceans, lakes and rivers, but I’m here to tell you that I’ll keep swimming for the rest of us.

I read two stories this week that make me believe that the idea of “on the level” is poised for a comeback. The first news came to me this past Wednesday, when the latest wide-ranging HEAT teams busts were announced in a joint statement by the Department of Justice and the Department of Health and Human Services. In all, 107 people at various levels of decision making in the health care chain were charged with false billing to the Medicare program totalling $452 million. Fifty-nine of those charged were from (say it with me!) South Florida, with the majority of the remainder coming from the high fraud areas of Baton Rouge, Los Angeles, Houston, Chicago and Detroit. We even had one defendant from Alabama, so let me take this opportunity to welcome those in the Yellowhammer State (yes, I had to look that up) to the world of Medicare Fraud arrests.

In addition to the “perp walks” in many cities, Medicare suspended payments to 52 providers based on aberrant billing patterns and what they called “credible allegations of fraud”. I find this to be the most interesting announcement by the team, as this indicates to me that the predictive modeling technology implemented by CMS last July is beginning to prove it’s worth, albeit on a small scale thus far. There is still a long way to go to expunge the Medicare program of fraud (as indicated by this insightful comment from my blog posting this past Wednesday that begs for a larger audience), but anytime providers of ill repute are led away in handcuffs, my soul does a Daffy Duck “Woo Hoo” Dance.

The other bit of news from the true crime files came in this morning, and has a connection to one of the many places I’ve lived in my life. In 2010, a pharmaceutical distribution center for drug giant Eli Lilly located in Enfield, Connecticut (past home base number 2 of 12) was robbed of over $70 million of Prozac and Zyprexa in a sophisticated heist. Thanks to a long investigation by local and federal authorities, 12 arrests were made in Florida this week against individuals who ran a cargo heist ring up and down the East Coast. In addition to the Eli Lilly robbery, the same ring was involved in cargo thefts at truck stops in Pennsylvania, Ohio and Tennessee, as well as a similar heist at a GlaxoSmithKline warehouse in Virginia. A statement from Eli Lilly indicated that the remaining drugs recovered as part of the arrests will eventually be destroyed. 

While two news releases will not completely restore the idea of entities being “on the level”, it is to the benefit of those in the medical field who are working hard to do the right thing that those players acting in bad faith are removed from the field. It continues to be a swim upstream, but for a small window of time, the rocks we encountered on this part of our journey were made of Styrofoam.

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May 4th, 2012 | No Comments »

Medicaid Fraud Control Units, And The People Who Love Them

Posted by J. Paul Spencer, CPC, CPC-H in Health Care Fraud

I’ve noticed a disturbing trend among the people of the world with regard to how we accept information. In general, people are accepting only half of the story. If we just take the time to question things, people and ideas, we tend to learn the real truth about what is going on. Yet isn’t it amazing how many people you can probably name in your circle of acquaintances who tell you “I don’t watch the news. It’s too depressing”. In my own life, there is a direct connection between this personal knowledge of acquaintances and wanting more than anything to draw these same people into a game of poker.

I received an e-mail yesterday from the OIG regarding Medicaid Fraud Control Units (MCFUs) that demonstrated this to me in spades, but I need to preface this with a touch of background. Because Medicaid is a state-run program, CMS and the OIG have started to share information on each state’s program via the use of maps. The Medicaid portion of the RAC program has one which is still under construction, and now the OIG has one for tracking the results of MCFUs from all states for Fiscal Year 2010.

While the map is flashy and fun and sucks the user in with happy mouse clicks, the better and more complete information on this topic can be found at the bottom of that same page as a spread sheet showing statistical data. I am a child of minutiae, so allow me to bore you with fun statistics for a couple of paragraphs.

First, let’s look at the totals of the entire Medicaid universe. MCFUs employ 1827.5 people nationwide to conduct fraud control investigations (I think I saw that one-half worker in a circus side show once, but I digress). For FY 2010,  a total of over $1.84 billion was recovered and returned to state programs nationwide, which is a solid total, but to me, what popped out was that only $205.5 million was spent to collect the total. A quick glance at the nearest calculator tells you that for every dollar spent on Medicaid fraud control, nearly $9 is recovered. I only wish my 401(k) investments showed such promising rate of return. 

In the police blotter portion of the report, we see that a total of 1,603 people were indicted, 1,048 of those for fraud and 555 in the “abuse/neglect” category. Of those, 1,329 were convicted, 839 of which were for fraud and 490 for abuse of neglect. This represents a conviction rate of just under 83%.

If you drill down into the information a little further, and combine it with information already available, I found something of an aberration. As one might expect, California, based on its size, led all states in convictions, but it was the State of New York that led the country during the fiscal year in total recoveries, clocking in at $278 million. Yet this may be the last time you see New York at the top of the list. If you remember, James Sheehan, who was the Medicaid Inspector General in New York, was forced to resign this past July after considerable push-back regarding his methods from the provider community. Couple that with the fact that the legislature of New York seems set on pulling in the reins on the Inspector General’s duties and responsibilities, and New York will be seeing a much different set of numbers for 2011.

Now for the reality check. Collecting nearly $2 billion in overpayments seems like a lot, until we look at the biggest number on the spread sheet, which is the total Medicaid expenditures for Fiscal Year 2010. That number stands a stone’s throw from $398 billion. Looking back at my calculator, this means that less than one-half of 1% of all Medicaid expenditures has been identified as being paid in error. Based on my experience in this field, I have absolutely no illusions that this represents the true error rate for Medicaid on either a state or national level. In other words, Tip, meet Iceberg.

I’m always a sucker for a good map, but look at one closely for a long enough period of time and your eyes either cross or they find something worth further study. One needs both curiosity and the the will to know the truth. Given that it’s your tax dollars, aren’t you at least a little curious?

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October 14th, 2011 | No Comments »

Medicare Fraud Beyond the Most-Wanted List

Posted by J. Paul Spencer, CPC, CPC-H in Health Care Fraud

I have, for many years, believed that I was Russian in a past life, mostly due to my love of cold, snowy, cloudy days and the writings of Dostoevsky and Tolstoy. When someone says they were someone in a past life, they have an annoying tendency to think that they were, of course, someone in royalty. Odds are very strong that I was not a member of the Romanov family. I’m much more of a realist, so I was more than likely a serf who died of consumption, but I was a well-read serf nonetheless.

My love of the eternal winter was tested this week with a snow storm in my part of the world that left a five-foot snow drift between my back door and the garage that holds my car. Once the digging stopped yesterday, I noticed that everything around me resembles not so much a Midwestern town, but rather one enormous bobsled track built just off the banks of the Barents Sea.

Of course, one cannot think of Dostoevsky without returning to themes of crime, punishment and incarceration. Making the rounds yesterday in health care news was the announcement of OIG’s Most Wanted List for health care fraud. As with any most-wanted list, the list of high-dollar violations by just these ten fugitives is extensive, with the amounts adding up to close to $125 million from just these ten individuals. The OIG states that over 170 people are wanted on charges related to health care fraud and abuse, and that number is restricted to the crooks that they’ve discovered.

What is amazing about this particular batch of miscreants is that with the exception of the one primary care doctor who decided that it was his life’s dream to become a prescription drug kingpin, the balance of the list consists of providers that are somewhat off the front lines of the medical delivery system. The biggest violators on the list were running HIV clinics in Florida and getting kickbacks from phantom patients. Others were involved in rehabilitation, home health nursing and durable medical equipment.

So why, given the list of “specialties” of these particular offending parties, as well as long-established patterns of fraud from these same areas, are audit contractors focusing on hospitals and physicians?

I keep returning to the ongoing theme of the successful appeal rate under the RAC program of 64.4%. The Recovery Audit Contractors are trumpeted as an “anti-fraud” measure, but they have referred all of two cases to the OIG for further investigation. The RACs spend the balance of their time doing clerical work that in the end is really only leading to changes in the way legitimate providers of health care services document treatment. The successful appeal percentage tells me that when the RACs believe they’ve found a problem, they are wrong.

RACs are not looking at claims for hospice care and home health, and their DME areas of focus have been merely repetitive of efforts already undertaken by the OIG and the four DME contractors. This is because the RACs are mostly looking for statistical aberrations in billing, and have no specialty focus. It is left up to the HEAT teams and the OIG to ferret out the criminals running enterprises in ancillary care.

The mistake was making the RACs responsible for geographic regions, rather than issues requiring attention. Right now, you have 4 RACs who are basically following each other’s lead as to what issues they review, and the lists, when compared side by side, are beginning to look the same. This all but insures that the biggest fraud areas are ignored in favor of statistically low-hanging fruit that may or may not be correctly identified as an incorrect payment.

What if we had RACs based on types of claims instead? You would have a Part A RAC for hospitals, a Part B RAC for physician claims, a home health RAC, a DME RAC and so on. With this model, two things happen that immediately give the program teeth. First, we have the beginnings of a wider net into areas that aren’t currently being investigated. Second, if a RAC is only handling Part A claims for hospitals, you staff it with coding and medical experts that are focused solely on hospital claims. After all, one of the big complaints about the RAC Demonstration Project, which was repeated in comments regarding the Medicaid RAC program, was that qualified staff was lacking in the RAC offices to understand billing, documentation and medical indications for reimbursed services. Specialization, rather than regionalization, would give the RACs much-needed gravitas in this area. Until then, the RACs will hire coders regardless of level of specialization, which has so far lead to our current appeal success rate.

The Most-Wanted List is a welcome development in the fight against health care fraud, but it will take more than a small cadre of investigators from the Department of Justice and the OIG to find the worst offenders. With legitimate providers under the microscope, the worst of those committing Medicare and Medicaid fraud might as well be under a Siberian snow drift. Enjoy digging through to discover them with your shovel,  because as it currently stands, no one knows how to operate the brand new plow.

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February 4th, 2011 | 1 Comment »