Medicare fraud probes increase in wake of Columbia/HCA problems
Knowing hot buttons’ helps systems steer clear
When Columbia/HCA was charged with Medicare fraud early this year resulting in several of its top officers facing federal prosecution and even jail time a sharp and sobering wake-up call pierced the ranks of top health care executive offices across the country.
The message to health care administrators: If one of the largest health systems in the nation could be brought to its knees on charges of fraud and abuse, just about anyone could also fall to the same fate.
"I think it was sobering for the whole health care industry," says Karl J. Kuppler, MHA, vice president of operations and corporate compliance officer with Trumbull Memorial Hospital and Forum Health Systems in Warren, OH. "A lot of us in health care have watched Columbia just grow and grow over the years and become very powerful. It was to the point where they were so large you had to wonder if they were threatened by anyone. But to see what’s happened, it’s clear they are."
Others in the industry agree with Kuppler’s assessment.
"The greatest impact the Columbia case has had on the health care community is to shatter the impression that the big guys never get caught," says Nanci L. Danison, JD, a health care lawyer in Columbus, OH, who specializes in Medicare issues. "It sent a very clear message to the industry that no one is immune."
The Columbia case may also signal the start of a new era in uncovering health care fraud a result largely brought about by the Health Insurance Portability and Accountability Act signed into law by President Clinton in the fall of 1996. The act, along with increasing health care coverage for many Americans, also gave significant additional funds to the Inspector General and Department of Justice to hire more agents and prosecutors to go after Medicare fraud cases.
"The Columbia case, in my opinion, is the result of that act and is only the first in what could be many more to come," Danison predicts. "The case started at a Columbia facility in El Paso, and I know that there are quite a few new assistant U.S. attorneys in Texas due to this additional funding. I think that this is more than just coincidence."
Medicare investigators, some of whom have been brought over from the FBI and trained in health care fraud, have also become more aggressive in their investigative techniques, she adds. Covert techniques used today, she says, can include:
tapping phone lines;
sending "moles" in with hidden microphones;
having federal agents securing jobs at suspect facilities;
cultivating informants from the employee ranks.
"They are going the whole nine yards," Danison says. "A lot of it is compliance through fear. And in a lot of cases, I bet it is working."
How to pass the smell test’
The best ways to avoid being the target of such intense attention is to be able to pass what Jill Hummel, JD, calls the "smell test." Hummel, a partner in the law firm of Greensfelder Hemker & Gale in St. Louis, describes the smell test to her clients as the initial impression federal regulators have of whether the organization is following the rules. (See related story for signs that your health system may be ripe for investigation, p. 123.)
"What you want to do is keep [the Medicare regulators] out of your organization from the get-go, and the smell test is critical for that," she says. "That’s where Columbia/HCA ran into problems. They had a couple of things that didn’t pass the smell test. Once investigators come in and start looking under one rock, they are going to look under another, another, and another, and start finding things that they weren’t initially looking for."
A big part of passing this initial litmus test is knowing the areas of most concern to investigators. Hummel refers to these as hot buttons. Today, she advises her clients to be squeaky clean in the following areas:
Coding consultants.
Two areas here that draw attention are the type of coding errors the consulting company looks for and also how the company is compensated. "You want to make sure that the company isn’t just looking for instances where you have undercoded and not received your full reimbursement but where you may have overcoded as well," Hummel explains. "You want to make sure that they look at both sides and that there is language in the contract with the company that states this very clearly." Such clauses in the contract "will put you in much better stead with regulators" if they do come knocking.
As for the compensation issue, Hummel says she stresses strongly to her clients to never compensate the company providing the coding services based on how much additional revenue it generates for you. "This is very much a hot button right now," she adds.
Cherry picking.
While it may be financially beneficial to your capitated health system and plan to enroll only healthy senior citizens, if you actively recruit only such members, it is sure to raise a flag with investigators, Hummel says. "This is called cherry picking, and it is something that regulators are very concerned about," she says. The problem is, what constitutes cherry picking is largely a judgment call. Offering seniors free use of a health club if they enroll in your system is going to attract one group of clients and offering free use of oxygen concentrators is likely to attract an entirely different group. Does the health club example constitute cherry picking or is it providing preventative health care? "I’m not saying [the health club example] is illegal, but it is one of those types of things that raises a flag for the regulators," Hummel says.
Jim Sheehan, JD, chief of the civil division of the U.S. Attorney’s Office in Philadelphia, also says that while every aspect of Medicare reimbursement is fair game for federal investigators these days, there are areas that he sees are particularly ripe for abuse. These include:
Patient transfers.
Violations occur here when a patient is transferred from one facility in a health system to another and both facilities submit a separate DRG for reimbursement. This constitutes double dipping when the health system gets reimbursed twice for the same patient, Sheehan says.
In 1996, federal lawyers moved to rescind a California hospital’s Medicare certification after it was charged with making an illegal transfer. The action was dropped only after the hospital proved it had taken the appropriate steps. But the point remains that the government is willing to impose harsh penalties.
72-hour project.
Problems typically arise here when a patient comes in, as an outpatient, for pre-surgery testing within 72 hours of scheduled surgery and then is later admitted when it is time to go under the knife. "What some hospitals have done is bill the inpatient DRG and also submit a bill for the testing when, in fact, only one bill should have been submitted," Sheehan says.
Teaching hospitals.
Violations occur here when resident physicians treat Medicare patients, and the bills are submitted as if a supervising physician did the work. In late 1995, the University of Pennsylvania in Philadelphia was tagged for this and earlier this year, agreed to pay $30 million for a settlement. Several other teaching hospitals are also under investigation, Sheehan adds, with settlements expected in the near future.
Managed care issues.
This is a new and growing area of interest for the federal government. "We’re very interested in HMO managed care issues in terms of premature discharges and refusal of admissions," Sheehan says. "If you are paying your premiums for medically necessary care and the HMO is saying, We’re not going to give it to you,’ that can reach a level of fraud" on the part of the HMO.
Federal agents are also comparing treatment provided to fee-for-service patients with treatment given to managed care patients. "What we want to find out is if people with the same conditions are receiving the same level of treatment," Sheehan says. "If they don’t, that could also lead to problems."
Nanci L. Danison, Attorney, Law Office of Nanci L. Danison, LPA, 5890 Sawmill Road, Suite 220, Columbus, OH 43017. Telephone: (614) 798-1800.
Jill Hummel, Partner, Greensfelder, Hemker & Gale, 10 S. Broadway Ave., Suite 2000, St. Louis, MO 63102. Telephone: (314) 516-2656.
Gregory M. Luce, Partner, Jones, Day, Reavis & Pogue, 1450 G St., NW, Suite 700, Washington, DC. 20005. Telephone: (202) 879-3939.
James Sheehan, Chief, Civil Division, U.S. Attorney’s Office, 615 Chestnut St., Suite 1250, Philadelphia, PA 19106. Telephone: (215) 451-5301.
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