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The RAConteur: Truths (or Not) During Yuletide

Posted by J. Paul Spencer, CPC, CPC-H in The RAConteur™

Being a natural skeptic, I live by a central belief that based on the innate failings of humankind as a species, to attempt to live by a belief system written in any form by the hands of a human being is a waste of time. Additionally, anything new in written form should be regarded as highly suspect. This is not to say that I am a nihilist, as we (hopefully) all read Fathers and Sons by Ivan Turgenev, and we all know how adherence to that belief system turned out for Bazarov (I never said I didn’t read and digest fiction).

December is a special month when it comes to government healthcare reporting, and the past ten days brought forth a holiday season cornucopia full of chest-beatings, distortions and half-completed projects as it relates to Medicare “Integrity” efforts.

I’d like to rewind to the OIG’s Semiannual Report to Congress. The OIG reported $6.9 billion in “recoveries”, as well as $8.5 billion in estimated savings. Those are rather lofty numbers, so let’s take another look at what the OIG actually uncovered.

With regard to the recoveries, more than half of that total involved the illegal marketing and promotion of prescription drugs by two pharmaceutical companies. This is important to point out for two reasons. The pharmaceutical industry is making a killing on Medicare Part D thanks to the Billy Tauzin kickback that states that the government must purchase pharmaceuticals using average sale price. rather than the much lower average wholesale price. It’s once again simply wonderful to know that my tax dollars are being spent to subsidize aberrant corporate behavior. The second reason comes down to a simple conclusion. If more than half of your investigative recoveries come from those not involved in the direct delivery of health care, could it be that the constant “fraud” spotlight on doctors and hospitals needs to be redirected?

As for the “estimated savings”, if you look at all of the issues, from finding 1,700 physicians billing at a higher than expected E/M level to the 51% overpayment rate on vacuum erection systems for male impotence (you knew I would cover this in this blog) point back to what I have been telling anyone who will listen for years; the Medicare Administrative Carriers (MACs) are paying claims improperly and there are no consequences to their actions. Finding the savings are obvious with the slightest bit of deductive reasoning, but sometimes the solution doesn’t rely on redesign, but rather the threat of a hammer.

Since it’s RAC day here, let’s talk about the latest quarterly whitewash reports regarding RAC results. If we were to believe the latest quarterly RAC newsletter, the RACs collected $648 million in overpayments, with HDI-brought-to-you-by-HMS in Region D responsible for 37% of that total. That brings the total to $2.4 billion for Fiscal Year 2012 and nearly $3.5 billion over the 3-year life of the program, according to a second newsletter.

Once again, CMS has no reliable numbers regarding either the number of claims currently under appeal, appeals finalized, those appeals found in favor of the provider or the dollar amount returned to providers after successful appeal. These quarterly missives make for a great self-aggrandizing press release for CMS in the same fashion as a press conference featuring a single survivor of an Andean plane crash who was found four months after the crash and hearing this individual state that he only ate the women in order to survive.

Yesterday, the Justice Department sent out news stating that $4.9 billion was collected involving government fraud for FY 2012. When we scroll down to the Health Care Fraud section, we find that most of the money identified is from the two drug companies identified in the OIG Semiannual Report from a few paragraphs ago. Of note is the fact that 647 qui tam whistleblower suits were filed during the fiscal year, with $3.3 billion collected from such suits in the same period. As a compliance officer, the biggest responsibility I have is explaining why processes occur the way they do in order to avoid these types of filings. If your business model is shady, you deserve this kind of employee activity, but on-the-job teaching goes a long way.

Finally, we come to something from the OIG called the Compendium of Unimplemented Recommendations. This used to be known as the Red Book once upon a time, but post-traumatic stress disorder used to be called shell shock, so are you really surprised that something else in this world is now more complicated?

Here’s how unimpressive this particular report is as anything but as a doorstop. Of the 28 recommendations detailed under the headings “Avoid Wasteful Spending” and “Identify and Reduce Improper Payments”, 18 have a conclusion stating ”Savings probable but not estimated”. In short, the OIG did one very narrow review of a questionable payment issue, came up with findings pointing to significant savings, but are unable to quantify it beyond the realm of probability. I’ll give you an equal example, just to show my brilliance as compared to the OIG. Sometime in the future, on any given roulette wheel, someone will land on the Green zero, and the amount of the payout will vary based on the bet. For this display of brilliance, I’ll expect my first government pension check next Friday.

As Ben Franklin once stated, and Gladys Knight & The Pips later paraphrased in song (I prefer this version, as it’s got soul!), “Believe half of what you see, and none of what you hear”. In matters related to government reports, the percentage of belief in what you see is directly proportional to the level of information presented. In the cases of these reports, the percentage plummets from half to near-zero. From my comfortable spot in the skeptic’s world, I could have told you so.

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December 5th, 2012 | 1 Comment »

Checking In From The Road

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

As I type this, I am in a semi-famous fast food restaurant in the middle of an extended road trip.

It started last Monday, September 17th, as I was fortunate enough to be a presenter at the 13th Annual Coding, Billing and Practice Management Symposium that was presented by the Wisconsin Medical Society. As those who were not in attendance could probably guess, the subject of my presentation was current government audit trends. There were some surprised looks among the attendees of my session, but I left a presentation of this type feeling that finally, the message was getting through to the physician population that complacency is not an option. As with past visits to this yearly pilgrimage to the Wisconsin Dells (complete with time on the water slides; I have a 6-year-old-son, but I only use that as an excuse as I’m a sucker for amusement parks), the experience was fantastic, and the sidebar conversations during the conference were fascinating.

This was followed by vacation. I traveled for 12 hours by car to my friend Steve’s home in Marietta, Georgia to complete the recording of an album I began work on back in February. I am happy to report that it is complete and awaits packaging and “wide” release. The music contained within won’t be to everyone’s taste, but I can assure those interested in purchasing the finished product that it will contain enough material to kill 37 minutes that you may have available.

After arriving back home on the 24th, I immediately returned to the road for three days of visits to an undisclosed client in a similarly undisclosed location. I have learned two things during these past three days: first, that extended hotel residency is an acquired taste, and that you have to be out of your freaking mind to believe anything that is reported on any cable news outlet, particularly in a presidential campaign season in the United States. Never in my life have I so longed to break out my DVD collection of episodes of Quincy, M. E. Yes, I hear you all snickering, and I don’t care, for Jack Klugman rocks!

While I was away, I was rather unsurprised to see that the Health and Human Services Secretary and the Justice Department issued a joint letter to the heads of five healthcare associations stating that “EHR fraud will not be tolerated”. We are probably all familiar with the scene in Ghostbusters where Dan Ackroyd’s character has a random thought and inadvertently chooses a giant marshmallow man as “the method of destruction”. Thanks to the current healthcare landscape, it appears that physicians have selected their electronic medical record system as their particular method.

Like many in this industry, I have grown tired of CMS, in concert with the remainder of the Executive Branch of our government, continually resorting to strong-arm tactics when it comes to the billing of services, rather than attempting to educate the provider community in a meaningful way as to what constitutes a “tolerable” way of doing things. In the world of CMS, there appears to be no such approach as “the carrot and the stick”, but rather an approach akin to “the stick and the 42-ounce Louisville Slugger utilized by Babe Ruth”.

Here’s a relevant example of what I just mentioned. The Medicaid Integrity Program was designed to be threefold, with different contractors (or “MICs”) handling different portions of the program. The review MICs pick the audit sample, the Audit MICs audit from the selected sample, and the Education MICs are supposed to provide outreach to the provider community based on audit findings. To date, I am hard-pressed to find any evidence that the Education MICs have addressed their task order in any meaningful way. Instead, the provider community gets audited, old revenue is forfeited, and the band on the Titanic plays on.

I can tolerate a lot of things, such as fast food on a Thursday afternoon, or cable news commentary or even a 12-hour drive to Georgia in the middle of the night undertaken for the purpose of singing. What I am having a harder time stomaching is an audit approach that stems from the need to punish, rather than the need to improve. As the need for TUMS sinks in from the roast beef sandwich I just consumed, I can promise the reader that I’ll continue to help physicians fight the good fight against this audit environment, but much like my time away from home, no one road goes on forever.

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September 28th, 2012 | No Comments »

Big Paychecks, And The People Who Cash Them

Posted by J. Paul Spencer, CPC, CPC-H in Industry Updates

I’d like to preface today’s rumination by apologizing in advance for a possible lack of clarity. While I usually only get about 4 or 5 hours of sleep per evening, last night’s total is probably closer to 20 minutes. I find that I suddenly am unable to raise my right arm past the 20-degree mark for reasons unknown to me, which rendered sleep impossible last night. I can usually take a fair amount of aches and pains, but today, in addition to operating on lack of sleep, I downed three ibuprofen for the first time in about four years before leaving the house. I can therefore make no claims to the mental organization of today’s post, and all of my head slaps today will be restricted to the rhetorical variety. Now that we have been introduced to the wonder that is my right shoulder, let us press on!

The topic of money is on my mind this morning. Given the realities of the healthcare system in the United States, money will always enter the discussion at some point, but I’d like to talk about money today in the setting of it being a corrupting influence as applied to American healthcare. Two interesting tidbits of information related to money in healthcare crossed my path this week, and both point to the folly of our system’s current path.

First, Modern Healthcare released the results of salary research regarding the CEOs of industry trade associations and advocacy groups, such as the American Hospital Association and America’s Health Insurance Plans. For 2010, the average compensation for executives heading these groups was $969,000, which represented a 12.1% increase from the year before. This alone would raise eyebrows, but this increase happened as revenues for these associations fell on average by 4.4%.

The name at the top of the earnings list is an exceptional example of the corrupting influence of money. Billy Tauzin, the retired head of Pharmaceutical Research and Manufacturers of America (PhRMA), the lobbying arm of the drug industry, “earned” a total of $11.6 million in 2010, despite having stepped down from that position in the middle of the year. Prior to his time at PhRMA, Tauzin was a congressman from Louisiana who took the lead in crafting the legislation that created Medicare Part D. That legislation was written very much to the advantage of the pharmaceutical industry. Specifically, the bill restricted the traditional buying power of the government by forcing it to pay Average Sales Price for prescription drugs, rather than the taxpayer-beneficial Average Wholesale Price. Being the gift that keeps on giving, the drug companies thanked the principal architect with a generous salary that began only months after the passage of the legislation. It is worth noting that of the $11.6 million paid to Tauzin in 2010, $9.2 million was classified as “other payments”. PhRMA refused to disclose the nature of these payments, so I’m happy to define it for you. Whenever you see the words “other payments” in relation to a salary package, you are probably making an accurate guess when you assume that this term is being used as a country club euphemism for “kickback”.

While we’re on the subject of ill-gotten paychecks, let’s turn our collective attentions toward one of the more parasitic entities currently occupying our financial system, that being check cashing companies. The Department of Justice announced last week that four such businesses were charged with money laundering in connection with payments that appeared to be going to health care entities, but were in actuality shell companies set up to benefit foreign nationals to the tune of $50 million in a two-year period. For their trouble, the check cashing businesses received millions of dollars in “other payments” (see how that works now?). Two of these check cashing agencies were in Los Angeles, one was in New York and one was in my old hometown of Philadelphia in a neighborhood in the northeastern section of the City of Brotherly Love that also boasts unusually high rates of sketchy legal claims for injuries allegedly sustained from the local mass transit system.

I compare the two above examples of behavior and find very little difference between the two. When we are constantly on the receiving end of political pontifications regarding how the Medicare Trust Fund is being depleted and that “fraud” needs to be tackled, my natural follow-up question at this point would be to define fraud. Is it someone gaining undue financial advantage through the submission of false claim information, or is it legislation that is sold to the country’s citizens as a great benefit to them when the fine print clearly says something else entirely? I am here to argue that both are fraud. Theft that just happens to be codified into our laws is no different than an organized theft from a storefront. The only difference is that one group comes with high-dollar attorneys and an infrastructure of friends in high places. It’s important to remember that just because the dollar amount on a paycheck appears on a respected organization’s check doesn’t necessarily make it money earned honestly.

If my shoulder wasn’t so sore, I’d collectively smack these thieves upside the head.

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June 22nd, 2012 | No Comments »

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 »

The RAConteur: Are We Looking In The Wrong Place?

Posted by J. Paul Spencer, CPC, CPC-H in The RAConteur™

It’s time once again to look at some numbers.

Being so close to reaching the end of yet another calendar, this is the traditional time when all entities take a step back and talk about what they’ve accomplished in the last year. Since it’s one of my favorite topics, let’s take a look at government audit activities. As is my custom, I’ll also be happy to tell you what the numbers actually represent.

I have already covered the reported numbers for RAC activity for Fiscal Year 2011 in a previous post. For today’s missive, I thought I’d focus on three sets of numbers that came out of the Executive branch over the past month.

Let’s start with a big number. On the 15th of November, the Office of Management and Budget (OMB) announced that agencies throughout the government cut improper payments by $17.6 billion. Roughly $1.1 billion of this money came from reductions in the payment error rate under the Supplemental Nutrition Assistance Program (or “SNAP”; I grew up calling this “food stamps”) and Pell Grants for higher education, but the balance overwhelmingly was under the different branches of the Medicare program, with a cumulative savings of $12 billion from Medicare Parts A, B & C. Isn’t it amazing that faulty bombers costing billions are allowed to let slide, but the government’s anti-fraud focus is squarely on activities such as eating, wellness and making yourself smarter?

Next, we go to money collected due to government-wide anti-fraud efforts. On December 13th, another report was released with great fanfare by Vice- President Joe Biden which showed fraud recoveries totalling $5.6 billion across all agencies. To add to this number in the coming year, HHS is asking Medicare Part D plans to crack down on painkiller fraud, notably excessive prescribing of OxyContin. If the way people drive in front of me is any indication, these should be target-rich investigations. 

Which, thanks to the inevitable trickle-down, brings us to anti-fraud efforts for CMS. Over $2.9 billion dollars in fraudulent payments was recovered in Fiscal Year 2011. Over $1 billion of that total has come from the HEAT team activity that was expanded to nine cities during the Fiscal Year. I am critical of audit entities in this space for not showing the proper aptitudes in their tasks, but as a taxpayer, I am 100% in favor of the HEAT team approach. The providers that are being perp-walked by these joint HHS-Department of Justice strike forces are literally scum-of-the-Earth thieves, and there shouldn’t be one person in their right mind bemoaning the fact that they are taken off the field in a HEAT dragnet.

Going further, the government announced that $2.8 billion in fraudulent payments had been collected from qui tam, or “whistleblower” cases, which stands as a new record for such suits. Of that number, $2.4 billion was the result of fraud committed against federal healthcare programs. The number of whistleblower suits reached an all-time high of 638 in FY2011. As people begin to know the rules, they become more likely to realize that what is going on around them is illegal. As a compliance officer, I can tell you that this can be either a good thing or a bad thing, depending on the person doing the finger-pointing. It is yet another salient reminder to make sure that all employees in organizations that receive remuneration from Medicare know why things are happening. If they don’t, they should always be aware of the reporting structure for problems within your organization.

If you haven’t internalized the idea by now, let me reiterate it. It’s a new world out there. Medicare checks suddenly have quite a few more strings attached than they used to at the beginnings of the program. There’s is a lot more to worry about, and loading up on Tums isn’t going to make the issues disappear. The numbers above keep getting larger. Do your best to make sure that future numbers such as these affect someone else.

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December 21st, 2011 | 2 Comments »