Medicare carriers fail fraud and abuse audit
Fines total at least $235 million
The Health Care Financing Administration (HCFA) needs to better police its own fraud cops, states a recent report by the General Accounting Office (GAO).
The GAO found that at least six HCFA contractors have been forced to pay at least $235 million in civil and criminal penalties since 1993. Reasons for these penalties range from improper payment of claims, destroying or deleting backlogged claims, and failing to recoup money owed Medicare to manufacturing documentation to support claims payments that should have been rejected.
Meanwhile, all of the contractors reviewed by the GAO failed to completely document the amount of money providers owed Medicare due to overpayments and claims that should have been paid by other insurers, found the July 15 study.
The reimbursement downside: Intermediaries are likely to feel they have to be more aggressive in challenging payments to protect their administrative backsides now that the GAO has put these problems on the record.
HCFA also is asking Congress for authority to impose stiffer penalties, which would make it easier to take work away from contractors who fail to protect Medicare funds. That also would allow the agency and not institutional providers to select financial intermediaries.
HCFA contractors were regularly "misusing government funds and actively trying to conceal their actions,’’ agrees a companion report by the Office of Inspector General.
The contractors cited by the GAO were responsible for paying providers on the fee-for-service side of the Medicare program.
One reason contractors were able "to dupe’’ HCFA for so long was the agency "routinely gave them advance warning about the dates of any reviews and about the records the agency wanted to review,’’ says Rep. Thomas Bliley, (R-VA), chairman of the House Commerce Commit tee. "In some cases, contractors prepared bogus documents to falsely demonstrate superior performance for which Medicare rewarded them with bonuses and additional contracts."
Just 10 days after the GAO’s report was issued, three Medicare contractors pleaded guilty to criminal charges and agreed to pay a total of $1.5 million in fines, plus $12 million in civil liability under the False Claims Act, in U.S. District Court in Santa Fe, NM.
Blue Cross and Blue Shield of Colorado and New Mexico Blue Cross and Blue Shield each pleaded guilty to two counts of obstruction of a federal audit and conspiracy to obstruct a federal audit after "admitting they concealed evidence of poor performance from federal auditors," said Justice Department officials. Rocky Mountain Health Care Corp. in Denver also pleaded guilty to one count of conspiring to obstruct a federal audit.
The audit as leverage
Various provider groups have been quick to use the GAO report as leverage to press for reforms in current reimbursement and claim review procedures.
"Physicians, in general, have good reason to be concerned with the findings . . . because the federal government relies on the judgment of these contractors in determining whether a claim should be paid or not, and also whether a particular physician should be placed under prepayment review, and/or be investigated for fraud," the American College of Physicians-American Society of Internal Medicine told the House Subcommittee on Oversight and Investigations in July.
According to informed sources, various provider groups have met regularly with the OIG over the past several months to express concerns about some of the government’s fraud programs and work out reforms in claim review procedures.
Some of their goals include:
• Eliminate, or tone down, the joint government-American Association of Retired Persons "Who Pays? You Pay!" campaign. Many health care experts feel that the program implies that most physicians are guilty of fraud and abuse, and trains and encourages patients to be on the lookout for suspicious billing behavior by their doctor.
• Target providers for medical reviews more appropriately. Carriers should use detailed statistical analyses of severity-adjusted provider billing patterns to identify true outliers. Those outliers who do not exhibit egregious behavior should receive educational coding assistance before being subjected to comprehensive audits.
• Standardize the payment process. HCFA should clearly communicate to physicians how carriers will conduct medical reviews.
• Improve training. The agency should conduct more and better training of carriers’ medical review staff so those conducting reviews are qualified to make complicated decisions on medical necessity and distinguish between different levels of evaluation and management services. Carrier-initiated medical review should be furnished by a physician licensed in the same specialty as the physician whose claim is under review. Also, appeal of overpayment requests over a certain monetary threshold should be conducted by an independent organization such as the state peer review organization.
• Discontinue random prepayment review of evaluation and management service claims by carriers. However, if HCFA continues to mandate random prepayment review, carriers should share the results with the physician community in a meaningful way (i.e. reported by specialty and geographic area).
• Improve post-payment review process so physicians do not feel coerced into accepting settlements with carriers.
• Institute a system of independent checks and balances on carrier self-audits. For instance, this might include allowing state medical specialty societies to review a sample of claims to see if they agree or disagree with carriers’ interpretation on documentation of medical necessity and coding.
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