Program Integrity Fraud, Waste, and Abuse Training March 2015 Jim K. Hampton, Director Fraud Operations & SIU
Health Care Fraud is a crime that has a significant effect on the private and public health care payment system. Fraud & Abuse accounts for over 10% of annual health care costs. Taxpayers pay higher taxes because of fraud in public programs such as Medicaid and Medicare. Recognizing the serious implications of Purpose improper payment resulting from fraud & abuse, PerformCare’ Fraud & Abuse Program is dedicated to detecting, investigating and preventing all forms of suspicious activities related to possible health care fraud & abuse , including any reasonable belief fraud and/or abuse will be, is being, or has been committed. 1
This training will provide answers to the following questions: What is Fraud and Abuse? What are the types of Fraud? What are potential Fraud indicators? What laws regulate Fraud & Abuse? What is a Fraud & Abuse violation? Overview How is suspicious activity reported? What are the Sanctions and Penalties for Fraud & Abuse violations? What are the steps in the Fraud & Abuse Investigative Process? What are Providers’ and Vendors’ responsibilities? 2
It is the policy of PerformCare To review and investigate all allegations of fraud and/or abuse, whether internal or external; Introduction To take corrective actions for any supported allegations after a thorough investigation; and To report confirmed misconduct to the appropriate parties and/or agencies. 3
An intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit What is Fraud? to him/herself or some other person. It includes any act that constitutes fraud under applicable federal or state law. 4
Provider practices that are inconsistent with sound fiscal, business, or medical practices, and result in an unnecessary cost to Health programs, or in reimbursement for services that are not What is Abuse? medically necessary or fail to meet professionally recognized standards for health care. It also includes recipient practices that result in unnecessary costs to the Health program. 5
• Thoughtless or careless expenditure, consumption, mismanagement, use or squandering of healthcare What is Waste? resources, including incurring costs because of inefficient or ineffective practices, systems or controls. 6
Falsifying Claims/Encounters • Incorrect Coding • Inappropriate Balance Billing • Duplicate Billing • Billing for Services Not Rendered • Misrepresentation of Services Examples of • Diagnosis Does Not Correspond Potential FWA to Treatment Rendered • Unbundling (billing separately for services that would ordinarily be all inclusive) • Coding a service at a higher level than what was rendered (e.g. up coding) 7
Administrative/Financial Falsifying credentials Fraudulent enrollment practices Fraudulent third-party liability reporting Offering free services in exchange for a recipient's Medical Assistance identification number Examples of Providing unnecessary Potential FWA services/overutilization Kickbacks-accepting or making payments for referrals Concealing ownership of related companies The acceptance of, or failure to return, monies allowed or paid on claims known to be false or fraudulent documentation 8
• Billing for services not rendered • Community and home based services are vulnerable • Misrepresenting of falsifying documentation of the services FWA Trends in • provided Behavioral • Service does not meet the requirements Health and for the service code Medicaid • Forgery of recipient signatures • Treatment plans and encounter forms • Falsifying or misrepresenting credentials • Credentials do not meet minimum requirements 9
False Claims Act (FCA) Stark Law Anti-Kickback Statute Pertinent Laws HIPAA and Regulations Deficit Reduction Act The False Claims Whistleblower Employee Protection Act 10
The Federal False Claims Act (FCA), 31 U.S.C. §§ 3729-3733 , creates liability for the submission of a claim for payment to the government that is known to be false in whole or in part. • A “claim” is broadly defined to include any submission that results or could result, in payment. False Claims Act • Claims “submitted to the government” includes claims submitted to intermediaries (FCA) such as state agencies, managed care organizations and other subcontractors under contract with the government to administer healthcare benefits. • Liability can also be created by the improper retention of an overpayment. • Penalties can be three times the government’s damages plus civil penalties of $5,500 to $11,000 per false claim. 11
Self-Referral (Stark Law) Statutes, Social Security Act, 1877 Pertains to physician referrals under Medicare and Medicaid. Referrals for the provisions of Stark Law health care services, if the referring physician or an immediate family member, has a financial relationship with the entity that receives the referral, is not permitted. 12
42 U.S. Code It is a criminal offense to knowingly and willfully offer, pay, solicit or receive any remuneration for any item or service that is reimbursable Anti-Kickback by any federal healthcare Statute program. Penalties many include exclusion from federal health care programs, criminal penalties, jail and civil penalties for each violation. 13
The Anti-Kickback Law makes it a crime for individuals or entities to knowingly and willfully offer, pay, solicit or receive something of value to induce or reward referrals of business under Federal Healthcare Programs. The Anti-Kickback Law is intended to ensure Anti-Kickback that referrals for healthcare services are Statute based on medical need and not based on financial or other types of incentives to individuals or groups. 14
• Money • Discounts Anti-Kickback • Gratuities Statute • Gifts Examples • Credits • Commissions 15
In addition to criminal penalties, violation of the Federal Anti-Kickback Statute could result in civil Anti-Kickback monetary penalties and exclusion from Federal Healthcare Programs, including Medicare and Statute Medicaid Programs. 16
The Health Insurance Portability and Accountability Act (HIPAA), 45 CFR, Title II, 201- 250 , provides clear definition for Fraud & Abuse HIPPA control programs, establishment of criminal and civil penalties and sanctions for noncompliance. 17
Designed to restrain Federal spending while maintaining the commitment to the federal program beneficiaries. Requires compliance for continued The Deficit Reduction Act participation (DRA), in the programs. Public Law No. • Development of policies and 109-171, 6032 education relating to false claims, whistleblower protections and procedures for detecting and preventing fraud & abuse must be implemented. 18
31 U.S.C. 3730(h) - A company is prohibited from discharging, demoting, suspending, threatening, harassing or discriminating against any Whistleblower employee because of Employee lawful acts done by the Protection Act employee on behalf of the employer or because the employee testifies or assists in an investigation of the employer. 19
The False Claims Act and some state false claims laws permit private citizens with knowledge of fraud against the U. S. Government or State Government, to file suit Whistleblower on behalf of the government against the person or business that committed the fraud. and Whistleblower Individuals who file such suits are known as Protections: “whistleblowers”. The Federal False Claims Act and some State False Claims Acts prohibit retaliation against individuals for investigating, filing or participating in a whistleblower action. 20
Federal law for increased access to healthcare that included provisions specific to fraud and abuse. PPACA increased penalties and Patient enforcement of healthcare crimes. Protection and PPACA mandates state and federal agencies Affordable Care to communicate about provider enrollment for federally funded programs. Act (PPACA – PPACA required Medicare and Medicaid Healthcare providers to have a compliance program. Reform Act) PPACA reduced the requirements of “intent.” PPACA stated that overpayments must be reported and returned within 60 days. 21
42 U.S.C. 1128B, 1320a-7b - States that criminal penalties will result in conviction of a felony and a fine of not more than $25,000 and/or imprisonment for not more than Criminal 5 years if false statements are Penalties knowingly and willfully made for benefits or payments, or misrepresents services or fees to beneficiaries of federal health care programs. 22
31 U.S.C. Chapter 8, 3801 – Any person who makes, presents or submits a claim that is false or fraudulent is subject to a Administrative civil penalty of not more Remedies for than $5,000 for each False Claims claim and also an assessment of not more than twice the amount of the claim. 23
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