Fraud costs $23 billion each year
Thousands expelled and monstrous fines imposed
The federal government is clearly getting serious about health care fraud, now termed the "crime of the 90s," and you should be following its lead. (See "Government gets tough" on p. 143.) The Justice Department has told hospitals that this is only the first wave. If they don’t cooperate with a voluntary audit, there could be fines of up to three times the amount of any billing errors ultimately found. (See chart, "Crime and Punishment," on p. 141.) In addition, among amendments to the Health Insurance Portability Accountability Act is a final rule that specifies that the OIG has the authority (based on a state’s Peer Review Organization recommendation) to issue fines of up to $10,000 against any practitioner who intentionally bills for services deemed unnecessary or to expel such providers from Medicare or Medicaid.
• The federal General Accounting Office reported in July that health care fraud accounts for up to 14% of all Medicare expenditures, or $23 billion of the $200 billion in annual Medicare expenses. Other problems included noncovered and unallowable services (5%), incorrect coding (9%), and insufficient documentation (48%).1
• Total Department of Health and Human Services spending for anti-fraud, waste, and abuse efforts in Medicare and Medicaid is $599 million in FY 1997, up from $452 million five years earlier.
• An ongoing investigation, "The 72-hour-window project," has revealed that 4,700 (89%) of the 5,233 hospitals nationwide that participate in Medicare’s fixed-payment plan have been double-billing billing separately for preadmission diagnostic tests while also collecting the fixed payment for inpatient procedures.
• The Federal Bureau of Investigation has also made Medicare a priority (see "FBI Investigations" chart, below).
Perhaps the most significant and visible federal investigation involves the nation’s largest health care company, Columbia/HCA Healthcare, suspected of upcoding and other violations of Medicare rules. The government probe was made public in March when federal agents appeared at the institution’s El Paso, TX, hospitals and doctors’ offices on suspicion that the company was overcharging Medicare and Medicaid.
The idea of investigators "raiding" health care organizations is troubling to Jane M. Bryant, director of risk management at Greenville (SC) Hospital System. "It could happen anywhere," she says. "It sounds like the feds are really serious about this, and I’m not sure they’ve necessarily defined their rules yet."
Bryant says she worries about the uncertainty that accompanies much of the current emphasis on health care fraud. In most of the investigations, she says, government investigators were unclear on what the hospitals should have done to remain above board, but they were clear on what the hospitals did wrong.
Reference
1. Cassil A. Legislators wonder: Can Medicare payment system be fixed? AHA News 1997; 33:1.
Coding in the anti-fraud era
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