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CMS Clarifies Predictive Modeling

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

I’d like to start this post today by stating categorically that it is a frustrating experience when one types out an entire blog post, follows that by clicking the “Save Draft” button, and in an instant watches a few hours of work disappear. Such is my current predicament. When you read everything below, bear in mind that this is my second pass at today’s topic, much like any clone, there will be things that are just not right, or that represent a horrible attempt at finishing something hastily. Setting this aside, I hope that you find the following information useful.

While I was out of the office for a few days, I received an e-mail from CMS about a topic I covered only briefly in the past. With a special article serving as clarification, CMS went into further details about predictive modeling techniques currently being utilized to reduce the payment of fraudulent claims, and what this will mean for providers, their patients and networks.

Let me quickly type in an overview of what this means before Word Press explodes.

All claims from June 30th, 2011 and after are being fed into CMS’ predictive modeling technology. The information from the claims is then diced, sliced and analyzed Jetsons-style with regard to provider and patient utilization. This leads to the building of profiles not only of providers, but patients as well.

After all of these high-speed calculations comes the assigning of risk scores based on the data collected. Those entities coming up with higher risk scores will be subject to payment delays, followed by a site visit, reviews of claim histories and interviews by CMS analysts at its discretion. If, after analyst intervention and inquisition, the billing is found to be “innocuous” (you know, like a quilting bee or the Lions Club), that outcome is recorded into the predictive modeling system and the payment for the claim(s) in question is released as usual. 

Now the rough part.

If an analyst finds indications of the not-so-innocuous (you know, like Tony Soprano or Dr. Jekyll), these cases will be referred to CMS’ Center for Program Integrity, the MAC involved and the ZPIC contractor in that particular geographic zone. The result could be targeted denials, revocation of billing privileges, and that classic cinema verite production entitled “A Raid”, featuring veteran co-stars Records Seizure, Perp Walk & Civil Penalty.

The main thrust of this new method is the fact that false claims investigations are no longer a guess, or reliant on someone blowing the whistle on an illegal practice. The government is now using the same types of pre-screening methods that used to be reserved for banks and credit card companies to catch the cheaters in the Medicare program. As a taxpayer, I would say this is about 45 years overdue. As a physician advocate, what I do for a living with regard to practice analytics and documentation review just became very interesting.

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October 21st, 2011 | 1 Comment »

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 »

The RAConteur: The Long Autumn Begins Early

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

Since I’ve moved to the Midwest from my homeland of the East Coast, I have become much more accommodating. This morning, on my way to the office, I was in the right-hand lane of traffic next to an exit ramp. A driver was coming off the exit ramp into the slight congestion that lay beyond. She stopped in the middle of the exit ramp, and I allowed space for her to pull in front of me.

Ten seconds went by, then twenty, then thirty and the driver sat there, seemingly unable to comprehend that a space had been made available to her. Perhaps she believed it was her moment of rapture that would sweep her into the sky on a flaming, Pegasus-drawn chariot to a magical spot 10 feet from her destination, but she wasn’t moving. I briefly revisited the colorful language I tend to use when behind the wheel and left her in the dust.

With some people, it doesn’t matter how many times you wave your hand, fire warning shots or shout “LISTEN TO ME!”;  no warnings are heeded and those who put forth alerts are left to view the consequences from afar. As a person who documents the progress of government audits in this space on a weekly basis, I know this feeling all too well.

While I tend to focus on recovery auditor issues on Wednesdays, a press release hit my inbox this afternoon that reminded me that this is far from the only effort to stamp out fraud and abuse in the Medicare program.

The Departments of Justice and Health & Human Services jointly announced the latest charges from the HEAT team initiative. Ninety-one individuals in 8 cities were charged for their participation in fraud schemes that resulted in roughly $295 million in false billings.

While these numbers are gaudy based on their scope, the HEAT initiative has been busy since its inception, having charged individuals with nearly $1 billion in false claims billing.

In the meantime, the recovery auditors have been ramping up operations almost exponentially. CMS set an aggressive goal of identifying nearly $1 billion in improper payments in the calendar year of 2011. Through nearly three quarters, the contractors have identified just short of $700 million, which means that over $300 million will need to be collected between now and the end of the year.

Today’s news from the HEAT team, as well as the aggressive goals yet to be achieved by the RAC program, are CMS’ attempt at firing warning shots. I am seeing that larger organizations are getting the message, but much like the car I left behind this morning, smaller providers may find themselves having a hard time dealing with the traffic of investigation if they don’t start paying attention as the warmth of Summer gives way to the Autumnal Death Cycle.

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September 7th, 2011 | 3 Comments »

PPACA: One Year Later

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

On the 13th of March, my wife and I celebrated our 6th wedding anniversary. We found out that the 6th year is the iron anniversary. We commemorated this by going out to dinner and seeing the film Black Swan. I’m still trying to figure out what a chicken sandwich and the latest celluloid self-abuse fest from Darren Aronofsky have to do with iron, but nothing made of this particular element struck our fancy.

The first anniversary is celebrated with paper, and do I ever have a chunk of paper with which to celebrate the latest one.

This past Wednesday marked the first anniversary of the passage of the Patient Protection and Affordable Care Act. The 2,409-page document, despite a few current legal decisions to the contrary, remains the blueprint for expanding health care coverage to as many citizens of the United States as possible by 2014.

The last year has been an odd journey for this law. In the past year, we’ve seen the House of Representatives switch parties, with the new party putting forth as their first piece of legislation a full repeal of the Act. We’ve seen two judicial votes against and three votes for implementing the act as it is currently written. We’ve seen Aetna and Cigna, two of the richest corporations in America, look the government in the face and tell them that they couldn’t afford to provide their employees with the minimum coverage mandated in the act, and the government believed them and granted a waiver.

With all of this in it’s first year, the biggest threat to the implementation of the act as written is currently one that rumbles under the surface. The creation of state-run exchanges and the expansion of Medicaid coverage mandated in the Act is encountering the roadblock of America’s lingering economic quagmire. An almost genetic unwillingness to raise revenue from the upper end of  the existing tax base is leading many state legislatures, including my own, to cut every service for everyone unfortunate enough not to be able to afford a seat at the lobbying table. One of the prime targets across the country has been Medicaid spending. State budgets are a mess, and excitement about expanding Medicaid, especially for bigger states such as Texas and California, is non-existent.

A few weeks ago, President Obama attempted to bridge this divide by proposing to change the time frames for state innovation waivers from the current 2017 to 2014. It’s a calculated gamble from an administration seemingly saying “if you can do it cheaper and provide the same level of coverage, while not increasing the federal deficit, be my guest”. Unfortunately, the audience for this message consists of the same states who are suing to negate the Act prior to that date. The states of Vermont and Massachusetts, who were uniquely positioned from standpoints of politics and existing policy prior to PPACA, would appear to already qualify for the waiver.

One part of PPACA that is going well is anti-fraud activity. $4 billion was collected in fiscal year 2010. We have yet to hear the final numbers for the Medicare RAC program for 2010, but all indications are that the number will provide enough encouragement to expand the program to Medicare Parts C & D some time in 2012. The Medicaid RAC program final rule is due later this year.

For its paper anniversary,  PPACA is creating and giving more than it’s receiving. A majority of the goals of the legislation are still three years away, but the journey of health care reform continues.

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March 25th, 2011 | No Comments »

The RAConteur: The Fraud Collections Continue

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

As we wait for the inevitable expansion of RAC audits for medical necessity into the physician realm, the Department of Health & Human Services continues their anti-fraud efforts unabated.

This past Monday, the Health Care Fraud and Abuse Control Program released its annual report for Fiscal Year 2010. The report showed over $4 billion being recovered and returned to federal health care programs, including over $2.8 billion returned solely to the Medicare program.

There was some news relating to the RAC program. In the last fiscal year, the RACs did not make a single referral for potential fraud to HHS or the OIG. I am of the opinion that the reason for this would be a combination of wanting to keep the contingency fees in house and a lack of technical knowledge to be able to make such referrals. Throughout the RAC Demonstration Project, there were only 2 potential fraud referrals from the contractors. In the final report on the results of the demonstration project, the permanent RACs were to go through mandatory training on the identification and referral of fraud. Perhaps they slept through it after eating turkey.

The report detailed over $687 million dollars that were recaptured due to HHS and OIG audit disallowances. This total does not reflect RAC audit recoveries, which will be released in a later report to come out closer to Spring.

As a footnoote, it is worth noting that over 10% of the total dollars identified in the report was recovered from the pharmaceutical industry. These recoveries revolved around the marketing of drugs for conditions that were outside uses approved by the FDA.

With the Obama Administration banking on audit recoveries to help fund PPACA, we should expect further reports trumpeting fraud and audit recoveries. Yet, given that an estimated $54 billion was improperly paid from Medicare and Medicaid in FY 2009, if we are looking strictly at the percentages, there is still much work to be done to guarantee payment integrity for government insurance plans.

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January 26th, 2011 | No Comments »

Calling Health Care Fraud What It Really Is

Posted by J. Paul Spencer, CPC, CPC-H in Coding and Compliance, Hot Topics, Industry Updates, J. Paul Spencer, CPC CPC-H

I’ve got theft on my mind this week.

Last Saturday night, while I was spending some spare time acting as the opening musical act for a handful of stand-up comedians, someone took a football-sized rock and threw it through my passenger-side front window. Aside from the costs of repairing the damage, I was relieved of my satellite radio player and a pair of $3 sunglasses.

This episode taught me a little something about crime, and that is that criminals aren’t know for their skills of selection. The satellite radio player is virtually worthless, as it is only good as long you have an antenna, power supply and a subscription. Perhaps they thought it was in actuality a GPS device, but a cursory check of my back seat would have shown them all they needed to know, as there was a rather large road atlas in plain view. My thesis has now morphed into the idea that it takes a special combination of hubris and stupidity to be a criminal on any level.

Which brings me to the world of Medicare compliance. I read a variety of trade publications from week to week that catalog the numerous billing violations – and subsequent fines paid – by health care providers around the country. To highlight just a few from the past few weeks:

  • An Atlanta radiologist found himself under federal indictment for falsely claiming that he had personally reviewed thousands of x-rays and radiological studies over a period of 8 months, when in fact the work was done by non-physician radiology techs;
  • A New York podiatrist was charged with multiples counts of fraud for billing out complicated surgical procedures of the feet, when in actuality, he was performing the less-complicated act of clipping his patients’ toenails;
  • A Boston man pleaded guilty to a 54-count indictment that accused him of enlisting people to stage auto accidents in the greater metropolitan area, then turning around and billing insurance companies for therapy services at his clinics stemming from “injuries” sustained in the fake accidents.

 

These are only three of the more egregious examples among dozens of other cases nationwide, and remember that these are all within the last month.

When I present Fi-Med’s compliance plan to new employees, I define “health care fraud” as “theft”. In a world where “stewardesses” have transformed into “flight attendants”, and “shell shock” is now “post-traumatic stress disorder”, it is tempting to use less pointed language to describe all-too-common objects and occurrences. Yet whether it is Medicare, Medicaid or a commercial insurance plan, the thieves such as the ones highlighted above exact a heavy toll not only on the resources of the insurer, but on the entire health care infrastructure with the increased costs of premiums and enforcement.

Having grown up in a family with 5 physicians of different specialties, one of the happier aspects of my job as a compliance officer is working together with health care providers to find simple solutions, whether it be for front desk processes or documentation, that keep them from inadvertently slipping onto the wrong end of the regulatory process. There is usually a “light bulb moment” in each of these conversations when a satisfactory conclusion is reached and where peace of mind is achieved.

While health care fraud has more subtlety than the mentally prehistoric toss of a rock through a window, it is no less an act of theft. Going forward, with a major national health care overhaul on the horizon, it particularly falls on those of us in the medical reimbursement field to give the best guidance possible to the providers we service to assist them in avoiding the sinkholes along the regulatory highway.

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November 20th, 2009 | 1 Comment »