How to avoid kickbacks, other health care fraud
With the government’s increased emphasis on health care fraud, many risk managers are seeking better ways to identify fraud before the government does. An attorney specializing in health care fraud provided some tips to attendees of the recent meeting of the American Society for Healthcare Risk Management in Atlanta.
Educational seminars are a great way to develop the skills necessary to avoid fraud and detect existing problems, says Nanci L. Danison, JD, an attorney in Columbus, OH. She recommends seminars provided by Medicare intermediaries and carriers, as well as state Medicaid agencies and private third-party payers. Their seminars usually are provided for free, and many are intended specifically for billing and coding personnel. "These are more accurate sources of information than commercial seminars hosted by publishers or consultants in pursuit of revenues for future clients," she says.
Favorable arrangement or kickback?
Kickbacks clearly are a danger for health care providers, and risk managers sometimes are not adept at avoiding them, Danison says. Providers often must walk a fine line, being aggressive in the pursuit of favorable arrangements with vendors and other providers while avoiding outright kickbacks that clearly are illegal. So how do you know the difference? Danison provides these tips:
Trust your sixth sense. Over time, a good risk manager will develop a feel for when an arrangement goes beyond good business. If it doesn’t pass "the smell test," Danison says there probably is a good reason. Look more closely.
The primary indicator of a kickback arrangement is that money or something of value is provided to another party in return for patients or business.
One red flag is when the transaction is not an efficient, effective, or economical way to obtain the desired result.
Another warning sign is when the skills of the person being engaged are not necessary for the job, such as when you have a physician doing marketing.
Danison also cautions you to watch for kickbacks in these situations in which they are most likely to occur:
Contracts for goods and services: Be cautious with rebates, free goods, and value-added services. Especially dangerous are personal service arrangements, especially with physicians, for consulting work that does not require the clinical expertise of the person under contract.
Leases of space or equipment: Most dangerous are leases by the hour, patient, use, or day. Also be careful with lease rates calculated with an eye toward numbers of referrals between the landlord and tenant or lessor and lessee. Leases that include the services of clerical personnel and/or medical supplies also are questionable.
Joint ventures, partnerships, and affiliations: Beware of an uneven distribution of start-up costs, ongoing expenses, or contributions of effort.
Sponsorship of activities: A common example is the sponsorship of seminars, luncheons, and other activities by pharmaceutical companies.
Charitable contributions: These can be an illegal way to get the kickback in the back door.
Research grants: Be sure the research has bona fide protocols or reporting requirements. Otherwise, it may be a sham.
Low-interest loans: Loans are suspicious if provided to a health care organization by anyone other than a bank or other standard lending institution.
Watch for managed care fraud also
Danison says the traditional concepts of kickbacks and false claims can be hard to apply in a managed care environment in which health care providers have a clear incentive to reduce services and referrals. Nevertheless, fraud prosecutions have been pursued in recent years when managed care efforts went beyond what government prosecutors considered aggressive business practice. She provides these examples:
Maximizing or falsifying patient enrollment numbers in order to receive a higher per-member-per-month payment. The violation can include enrolling ineligible patients.
Inflating your Medicare operating budget. This is a way for health maintenance organizations with a risk-based Medicare contract to increase revenue.
Paying providers incentives to reduce services so that treatment is withheld from certain patients for certain conditions.
Selective discounts to some payers in order to "cherry pick" the healthiest patients.
Providing a false financial picture to government agencies and third-party payers in order to appear more successful than you are.
False representations concerning provider panels, such as falsely including physicians and hospitals on the provider panel to encourage patients to enroll.
False statements about anything in marketing materials, patient brochures, financial records, or other materials.
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