Fraud, Waste, Abuse: What it Means, What are Costs, Will it Ever End? Linda Vincent, RN. PI. Vincent & Associates

Transcription

1 Fraud, Waste, Abuse: What it Means, What are Costs, Will it Ever End? Linda Vincent, RN. PI. Vincent & Associates

2 US Health Care System Fraudster

3 Topics High Risk areas and ROI What is Fraud Why worry about Medical Identity Fraud Schemes and Abuses National Epidemic of Prescription Abuse PPACA and Fraud and Abuse

4 High Risk areas for Fraud Medical Identity Theft Prescription Abuse Data Breaches Corrupt In Network Physicians

5 How/Why Fraud Affects YOU Annual Budgets Life Maximums (until 2014) Providers Premium Increases Repair of Health Records Credit history Vincent & Associates. Reprints available by permission

6 What is Fraud per Medicare Fraud- Intentional deception or misrepresentation knowing it could result in unauthorized benefit(s) Abuse- Incidents or practices, though not fraudulent are inconsistent with accepted practices that create unnecessary costs Abusive practice can lead to fraud

7 Most Common Forms of Provider Fraud Billing for services not rendered (c. 25%) Misrepresentation of services provided (c. 35%) Provision of medically unnecessary services (c. 10%) 7

8 The Financial Damage 3% To 10% of annual U.S. Expenditure* Translation: $78 billion to $260 billion in 2010 alone Government recovers 20 cents of every improper dollar spent * SOURCES: U.S. Government Accountability Office; National Health Care Anti-Fraud Association 8

9 $154 MILLION MEDICAL INSURANCE FRAUD SCHEME Doctor convicted of performing unnecessary surgeries on healthy patients Santa Ana, CA Doctor charged in the largest medical fraud prosecution in the nation 19 co-defendant Unity Outpatient Surgery Center (Unity) scheme convicted of performing unnecessary and dangerous surgeries on over 160 patients Doctor plead guilty to the 40 felony counts including: conspiracy to commit insurance fraud insurance fraud aiding and abetting capping Defendants face sentence ranging from probation up to 28 years in state prison

10 Physician accused of billing for people not seen or who had died Longtime San Antonio doctor has been indicted on charges that he committed more than $100,000 in Medicaid and Medicare fraud by billing for patients he did not provide medical service to or for people who were dead. Now faces 27 counts of health care fraud, punishable by up to 10 years in prison; three counts of mail fraud, punishable by a maximum of 20 years; and one count of aggravated identity theft, punishable by a mandatory two years on top of what he could get from any of the other charges. From January 2006 through November 2009, Robinson billed the government for office visits during times when patients were not present, out of town and hospitalized, and times when defendant Robinson was outside of the United States, and at times when his office was closed, the indictment states. Court records allege that more than $100,000 was fraudulently billed 10

11 Fraudulent Billing and Ordered Services Independent Diagnostic Testing Facilities (Labs) Clinical Testing Laboratories Durable Medical Equipment Home Health Services Hospice Services for Terminally Ill Medicare costs for hospice care have increased more than in any other health care sector as for-profit companies continue to gain a larger share of the end-of-life medical market, government records show. From 2005 through 2009, Medicare spending on hospice care rose 70% to $4.31 billion, according to Medicare records. A recent report by the inspector general for Health and Human Services, which oversees Medicare, found for-profit hospices were paid 29% more per beneficiary than non-profit hospices. Medicare pays for 84% of all hospice patients. EQUALS Tests & Equipment Not Really Ordered and Likely NOT Performed Tests For Which A Clinical Relationship Does NOT Exist 11

12 Medical Identity Fraud Stolen Member information Improper or Fictitious beneficiaries Stolen Physician information Healthcare ID cards HealthCare Data Breaches

13 How Information is Stolen Dumpster Diving Mail Theft red flagging Stolen Wallets Telephone and Scams Obtaining dead people s information Establishing fraudulent clinics Vincent & Associates. Reprints available by permission

14 Other Contributing Factors Cuts in employer-funded health coverage Numbers of active workers vs number of retirees Higher premium share, deductibles, treatment co-pays High unemployment Growing uninsured population Confusion/controversy over health care reform Vincent & Associates. Reprints available by permission

15 Medical Identity Fraud By the Numbers About 5.8% of ID theft crimes are Medical ID Theft 1.5 million victims 94% of providers have HC information breeches Patient or health plan information Affected over 6 million Americans Estimated costs to HC industry $7 billion (Ponemon Institute) Scary statistics Only 1 in 700 identity thieves arrested Vincent & Associates. Reprints available by permission

16 Consequences Death Improper claims payments Life time max loss of finite benefits Premium increases Credit issues Altered medical history in variety of data bases

17 Latest Schemes Houston Physician Physical Therapy $30 Million Atlanta Physician Group counseling $2 Million Los Angeles Residents Wheelchairs, Hosp Beds $26 Million Miami HIV Clinic Medicare $13.7 Million

18 Data Breaches-Med ID theft Cost over $7 Billion annually Impact is $1.2 million per organization Average organization had 2.4 breaches in two years Most caused by lost laptops Affected over 6 million patients Breaches affected 94% of providers, hospitals, healthplans ule/breachtool.html Results in 39% inaccurate patient file information

19 Data Breaches Questions for members to ask their doctors Do you encrypt my data - EMR Do you do pre-employment background checks Where is data stored if I am no longer your patient Do you outsource your transcribing or billing

20 Preventing Medical Identity Theft 1. Always review EOB (explanation of benefits) 2. Eliminate SSN from records 3. Review and dispute claims 4. Check credit reports 5. Shred everything 6. Add picture to health care cards 7. Investigate technology of palm scanning 8. Add fraud edits in claims payment process.

21 Epidemic of Rx Drug Abuse Not A New Crime First observed in Civil War re: morphine 1987: Establishment of National Association of Drug Diversion Investigators (NADDI) 1990: Cincinnati P.D. establishes Drug Diversion Squad 500 Cases/Yr by : GAO study cites diversion as prevalent type of Medicaid fraud 1992: FBI Operation Goldpill 3 years, 50 cities, 200 pharmacists & other perpetrators

22 A New Drug-Payment Equation Rx Costs, 1990: $40.3 Billion Government: 18% Private Insurance: 26% Consumers: 56% Rx Costs, 2005: $200.7 Billion Consumers: 25% Government: 28% Private Insurance: 47%

23 Today: A Perfect Storm of Abuse % of U.S. population 15.2 million admit abusing controlled drugs in %/11.8 million = pain relievers 1.2 million = Oxycontin Cocaine, hallucinogens, inhalants, heroin combined = 12.4 million Rx abuse second only to marijuana use High incidence among teens (Oxycontin/Vicodin) 1/3 all new Rx abusers in 2005 = 12 to 17 year-olds

24 The Gathering Storm Factors Underlying Today s Diversion Phenomenon Emergence of Pain Management much needed medical discipline, but accompanied by unfortunate by-products Ongoing development of powerful new pain medications Oxycontin Actiq Fentora Off-label prescribing Actiq: FDA approval cancer % prescribed by oncologists: 1% The Hartford Top-25 work comp rank: #6 Neurontin/gabapentin Archives of Internal Medicine, 5/06: 21% of 2001 scripts = off-label uses Proliferation of behavioral meds (depressants/stimulants) 2005: 96 million scripts for 6 drugs alone

25 Drugs in Demand Schedule II Retail $ Street $ Oxycontin 40mg $5.66/tablet $20 $40/tablet oxycodone 40mg $4.54/tablet $6 $8/tablet morphine 100mg $4.16/tablet $60/tablet Actiq 400mg $26/lozenge $30 $40/lozenge fentanyl 50mcg $24/patch $25 $40/patch methadone $0.21/tablet $10 $20/tablet Ritalin $1.11/tablet $8 $15/tablet Adderal $4.23/tablet $5-$7/tablet Schedule III Vicodin $1.47/tablet $6 $10/tablet hydrocodone/apap $0.43/tablet $6 $10/tablet

26 Diversion s Dire Consequences 2002: Fatal pain-med poisonings surpass cocaine & heroin deaths 2004: At 19,838 fatalities, accidental drug overdose becomes #2 cause of unintentional-injury death in U.S. Up 78% between 1999 and 2004: Sedatives, Vicodin, Oxycontin cited as principal factors Up more than 100% in 23 states (e.g., WV: 550%) 2005: 43% of drug-abuse E.R. visits 600,000 involve pharmaceuticals 2003: Acetaminophen poisoning becomes #1 cause of acute liver failure in U.S. 2005: Annual U.S. liver transplants up 20% since First-year costs: $393,000

27 Triple-Threat Payer Impact Cost of unnecessary, excessive or bogus prescriptions Cost of related medical claims legitimate or falsified Physician office visits & other treatments Diagnostic tests (imaging, nerve conduction) Emergency room/urgent care clinic exams/treatments Conditions caused by Rx abuse e.g., liver damage/failure Treatment of affected family members Incalculable potential-liability cost Dangerous prescribers/prescription sellers Insured s injury or death Insured s injury of others

28 Fiduciary Responsibility & The Wild Card Potential Payer Liability Payers that fail to take an active approach to doctor-shopping and other aspects of diversion face significant potential liability related to prescription-drug addiction and overdose deaths: The data was right under the prescription payer s nose; had it only taken the trouble to look at what it was paying for, it could have prevented this addiction... liver failure... overdose death... fatal accident Precedent for should have known suit against pharmacy FL court decision affirms pharmacy s duty to warn Credentialing & network issues also come into play Awareness of risk is integral aspect of some companies active approaches Passive approach insufficient/risky in face of national epidemic & widespread mortality

29 PPCAC and Fraud Expands HHS powers over HC Fraud Stark Law & Physician owned hospitals Mandatory Compliance Change to Anti-Kickback Statute Self Disclosure under Stark Law Patient Notifications Overpayment Return Payment Suspension National Coordination of Anti-Fraud Activities

30 PPACA Increased Funding for Enforcement Expansion of RAC Recovery Audit Contractor Stark Law Amendments MD ownership Mandatory Overpay returns in 60 days CMP Changes False statements Timely Access for audits, investigations Ordering during times not in Federal Health Program

31 Recourse and Prosecution Federal False Claim Act 31USC Three times amount of each claim plus Up to 10 K per claim Not JUST paid claims but any submitted claim Each State has a False Claim statute Local, State, Federal, Postal, DOL Vincent & Associates. Reprints available by permission

32 The Bottom-Line Impact At any level of loss, fraud does not occur in a vacuum; rather, it contributes to: Increased health costs for employers Fewer benefits/higher co-pays & premium contributions for employees Reduction/elimination of retiree benefits 42% of employers NOT providing health insurance 45 million Americans uninsured Patient exploitation & harm Poor quality of care Higher property and casualty costs and premiums Higher reinsurance claim costs 32

33 The Take Away Fraud will never end Annual beneficiary audit Claim edit suggestions Provider profiling Pharmacy benefit audit Join fraud networks - groups Attend fraud conferences Join local fraud associations Online fraud assessment solutions Ask questions Be vigilant Get identity theft protection NOW

34 NLA Endorsed Product for Identity Theft Protection and Recovery Identity Theft Solutions provides for protection and fully managed recovery. IDTS provides the resources and solutions for identity theft education IDTS provides revenue for your coalition and the NLA

35 ID Theft Solutions Process Educates clients on how to reduce their vulnerability by utilizing methods and resources available to Prevent, Detect, and Recover from identity theft fraud Professional management of the ID theft recovery process. 1. Initial communication and triage of reported fraud by ID theft specialist 2. Assessment of reported facts by a IDTS manager 3. Assignment of a skilled investigator who will diligently work on case until successful resolution 4. Complete documentation file of all actions and correspondence provided to client

36 Thank You Questions

37 Healthcare Fraud by Dead MD s Dead Doctors Used to Scam Government Money Senate Hearing Viewable at: Hearing_id=eb f1-4b55-826e-a9bf c Fraudulent providers submitted claims based on orders from some doctors who were dead for 10 years or more From 2000 to 2007, Medicare paid between $60M & $93M for claims where the ordering or prescribing doctor had been dead for at least 12- months

38 A Year of Medical Identity Theft: interactive map The World Privacy Forum has published an interactive map that shows the geography of medical identity theft in the US. The map gives the location of each consumer report of medical identity theft, and for cities with more than one incident or report, number of known incidents are listed. The map reveals strong geographic centers for medical identity theft, including Florida, New York, California, and Arizona. The map is available on the World Privacy Forum Web site at

39 Obtaining Credit Information Visit: Call: Read: Vincent & Associates. Reprints available by permission

40 Handy Web Sites Vincent & Associates. Reprints available by permission

41 Individual Credit Agencies Equifax Ordering single credit report Experian Also Transunion Also fraud alerts Social Security Administration Federal Trade Commission Call IRS Theft Hotline at

42 Further Resources stepone.html This gives direct info on protection & access to ID Theft Solutions and navigation bar for more information or sign up