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Posts Tagged ‘Health Care Fraud’

Fraud, Stolen Vans and Other Observations

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

In my occupational infancy, I worked in retail as the manager of a camera shop. The month of February was a time of reflection in retail. The Christmas receipts had been counted, the January returns had been calculated and then came February, which meant a lot of nothing. Here’s a little secret I can share with you; President’s Day sales do not bring in bargain hunters. It always seemed odd to me to celebrate the birthday of George Washington by going out and buying an on-sale camera when the product didn’t exist in the 18th century.

If the retail sector has their February doldrums, there has been no such downturn in health care news in the past week.

The first story I read was a story of a van being stolen in Manhattan that contained magnetic tapes with the records of 1.7 million patients and hospital staff over a 20-year period from various New York City hospitals. The van belonged to a company that was contracted to be the medical records vendor for the city. 

There are many rules for survival in New York City, the biggest of which would be “lock the van”. The city has responded by firing the vendor, filing suit against the same and sending out notification letters to all of the people affected (covering 17 languages), offering fraud resolution services and free credit monitoring. As if we needed yet another reminder about weaknesses in the protection of personal information, this story represents one of the biggest data breaches yet, showing all of us that there is still a long way to go, especially when your medical records vendor drives your tapes around in a van as if they are Scooby-Doo.

In further developments, in a joint press conference yesterday afternoon by the Departments of Justice and Health & Human Services, it was announced that 111 people had been arrested for various fraud schemes that led to false billings of $225 million to the Medicare program. The newly ordained defendants hail from Miami, Detroit, Brooklyn, Tampa, Houston, Dallas, Baton Rouge, Los Angeles and Chicago. Due to the success of the Health Care Fraud Prevention & Enforcement Action Teams (HEAT), they have now been expanded in Dallas and Chicago.

The fight against fraud continues unabated, with $4 billion dollars being returned to the Medicare program by the HEAT teams alone in 2010. I eagerly await the upcoming report about the success of the RAC contractors in the past year. In the meantime, it behooves every health care provider to be aware of the expanded audit environment.

This is not to say that there are investigators hiding under your bed, but what slippers have you ever been aware of that breathe? If nothing else, the paranoia will give you something to think about during a slow retail season.

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.

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.