Fraud and abuse: Here’s what’s happening
Here are the latest developments in the federal government’s fraud and abuse investigations:
Watch DRG 89, 79
Federal investigators reportedly looking into the possibility that hospitals are upcoding certain conditions are focusing on a large increase in DRG 79, a bacterial respiratory infection.
Quoting an unnamed federal official, Physician Marketing magazine says investigators are comparing the incidence of DRG 79 with DRG 89, simple pneumonia. Hospitals can be reimbursed almost 50% more for a DRG 79 compared to DRG 89. If investigators find a large increase in a hospital’s use of DRG 79 and a corresponding decrease in the use of DRG 89, they may face a claims inquiry.
The April 25 report also said Medicare auditors are comparing DRG 14 (stroke) and DRG 15 (transient ischemic attack), and are looking for "DRG creep" in cardiac surgery.
Company fined for coding violations
A company that supplies physicians to hospital emergency departments has agreed to pay $7.75 million to settle claims that it overcharged federal health care programs.
EmCare Inc. has agreed to pay the federal government $6.5 million and various states will get $1.2 million to settle false claims charges involving Medicare, Medicaid, the Federal Employees Health Benefits Program, and the military’s CHAMPUS retiree health care program.
The company was accused of changing the codes of health care claims to reflect more expensive medical procedures and billing for more extensive services. It settles a dispute with EmCare originally brought in U.S. District Court in Oklahoma City.
Insurance waivers targeted
Federal anti-fraud investigators have started a new attack, this one directed at the front end of the health care process. Government enforcement officials are going after health care facilities that routinely waive the coinsurance portions of their Medicare patients’ bills.
Experts are warning providers to make sure any waivers given comply with the Kennedy-Kassebaum law passed by Congress last year.
"The government is very serious about this and is going to crack down on providers who intentionally ignore the law," warns Sanford V. Teplitzky, JD, a health care attorney with the law firm of Ober, Kaler, Grimes & Shriver in Baltimore.
The law specifically defines routine coinsurance waivers as an illegal compensation to Medicare or Medicaid beneficiaries, which makes it unlawful under federal anti-kickback statutes. In making routine coinsurance waivers illegal, the act reiterates existing Medicare-Medicaid prohibitions against illegal coinsurance waivers.
But the new provisions outline three exceptions. The waivers may be legal if providers:
• do not regularly advertise that they’ll waive the fees;
• do not routinely offer the waivers;
• demonstrate sufficient reasons for their actions.
This last exception must be satisfied in all of the following ways:
The provider must make an earnest effort to collect the fees before deciding on the waiver.
The decision to waive is based on the patient’s financial need.
The waiver complies with existing Medicare "safe harbor" standards.
Safe harbor provisions allow providers to forgive the coinsurance under certain conditions, namely that the fees aren’t the focus of a formal pricing arrangement with a third-party payer.
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