Ensure CP focuses on fraud opportunities
The best of intentions may go astray
By Paula Swain, RN, MSN, CPHQ, FNAHQ
Swain & Associates
St. Petersburg, FL
Health care providers seldom intend to defraud payers. Yet creative and innovative plans sometimes go astray if rules governing fraud and abuse are not given sufficient attention. Because health care providers tend to be absent from planning sessions where fraudulent concepts might be formulated, they may be unaware that carrying out a proposed plan may be one step toward a scheme destined to cause problems.
Health care fraud constitutes at least 5% of the nation’s annual trillion-dollar health care bill, according to the U.S. Chamber of Commerce. Moreover, reports the General Accounting Office, fraud adds nearly 20% to medical insurance premiums. Health care organizations have an obligation to fight back.
"Fraud involves a small number of health care providers, but the dollar amount is significant enough that we have a responsibility to pursue offenders," said Greg Anderson, director of Blue Cross and Blue Shield of Michigan’s division of corporate finance investigations in Detroit.
At a recent news conference in Washington, DC, Anderson said an antifraud program by the insurer’s Michigan offices saved or recovered more than $20 million in 1996. Any attempt to defraud a medical insurance company in Michigan, he said, can result in 10 years in prison and a $50,000 fine.
FBI agent Albert R. Robinson recently spoke to the Tampa Bay (FL) Hospital Association about the Bureau’s newly intensified involvement in health care. Robinson explained that the FBI is still learning the intricacies of the health care business. He said that in 1990 the agency handled only the most blatant cases, such as one involving two physicians who were billing a billion dollars a year from two mobile clinics. Investigators today have progressed to more sophisticated cases involving hospital cost reports, insurance companies, Medicare, and reimbursement regulations. That’s going to make life much more challenging for hospital managers and administrators.
Staff reports must be acted upon
Your hospital’s compliance plan must require physicians as well as staff from all corners of your hospital to be educated about fraud and abuse. Supervisors must reinforce this education, and are subject to being fired for not acting on staff reports, according to provisions typically included in model compliance plans for hospitals. The suppression of information, intentional or unintentional, is construed as an attempt to cover up. You may need to alter job descriptions to reflect these new reporting requirements.
Following are examples of activities that are clearly illegal, and that are likely to become targets of investigations:
• Paying a physician for a referral is known as a kickback. Payments can be in the form of money, office space, or trips and gifts.
Strategy: Make sure ambulatory managers, CFOs, and hospital staff are aware of the agreed-upon arrangements when referrals are made, and especially when physician practices are taken over. Consider this kickback issue: A pacemaker manufacturer provides physicians with trips and gifts for using its products. Both the physician and the pacemaker supplier are engaged in potentially abusive activities.
• Questionable billing issues must be disclosed upon request. It is illegal to cover them up.
Strategy: Billing staff, including managers, account supervisors, and department managers submitting bills, need to understand more than just how to create charges. They have to know how to avoid submitting test charges erroneously. Medical necessity must exist for any test performed. Robinson described the all-too-common practice of billing for "wave therapy" the physician charges for waving as he or she walks by a patient and the "sink test," in which lab technicians charge for samples poured down the sink.
• Withholding care from patients who have o insurance, or discharging unstable patients, could be a violations of COBRA "dumping" provisions.
Strategy: Make sure staff throughout your facility know how to handle all patients who request care. This responsibility extends beyond the emergency department. A patient who arrives at the front door can be turned away from the hospital by the information desk if the staffer at that desk doesn’t understand that the patient needs to be looked at by a physician. Cases of pregnant women being told to come back when the contractions are closer is an example of how the labor and delivery department might be violating COBRA laws.
• One of the most common schemes uncovered by fraud units is upcoding, where a provi der manipulates insurance billing codes to gain a higher reimbursement payment.
Strategy: Problematic inpatient billing scenarios can involve the utilization review staff, case managers, and medical record coders, as well as billing departments. Make sure they all know the content of the medical record documentation when they are dealing with coding submitted by a physician’s office ordering a test or treatment. Is the medical necessity for the test or treatment documented? Maintain a clear audit trail of bills rejected for payment.
• Altering medications is a serious infraction. Consider this scenario: A doctor administers vaccinations containing half the prescribed amount of vaccine, and bills patients for the full amount.
Strategy: Educate all staff to advise their supervisors if they ever are requested to dilute or alter medication.
• Consumers submit 35% of claims found to be fraudulent, according to the Health Insurance Association of America in Washington, DC. Patients often submit claims for services never rendered by their doctors, sometimes even offering a phony bill or letter from their physicians.
Others pay their physicians directly and then alter the bill before sending it to the insurer. According to a poll conducted by the American Association of Retired Persons, 93% of Americans believe fraud runs rampant in the health care system, and 53% believe it’s on the rise.
Strategy: Make sure all clinic and office staff become alerted to a potential problem when they get rejections or queries from insurance companies. Staff should be able to understand and discuss billing issues with patients, or at least know where to send them for detailed information.
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