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1 FRAUD, WASTE, & ABUSE Kimberly Parks NEIGHBORHOOD LEGAL SERVICES MICHIGAN ELDER LAW & ADVOCACY CENTER Hemingway Redford, Michigan (313)
2 Why It s Important Fraud, Waste and Abuse drain significant resources away from Medicare, Medicaid, and other health programs. Example: In 2014, the U.S. Office of Management and Budget estimated that improper payments made under Medicaid amounted to $17 Billion.
3 What is Fraud, Waste, & Abuse?
4 Fraud Fraud means an intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to himself or some other person. It includes any act that constitutes fraud under applicable Federal or State law. 42 C.F.R
5 What does that mean?
6 Fraud is Intentionally submitting false information to the government or a government contractor in order to get money or a benefit.
7 Examples of Fraud Medical identity theft Billing for unnecessary services or items Billing for services or items not rendered Upcoding Unbundling Billing for non-covered services or items Kickbacks Beneficiary Fraud
8 Abuse Include actions that may, directly or indirectly result in unnecessary cost to a health care program. Abuse involves payment for items or services, or receipt of services, when there is not legal entitlement to the benefit and the provider or beneficiary has not knowingly and/or intentionally misrepresented facts to obtain payment or services.
9 Examples of Abuse Medical identity theft Billing for unnecessary services or items Billing for services or items not rendered Upcoding Unbundling Billing for non-covered services or items Kickbacks Beneficiary Fraud
10 The Difference Between Fraud & Abuse Fraud An intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit Intent Knowledge Abuse Provider has not knowingly or intentionally misrepresented facts to obtain payment. No Intent No Knowledge
11 Medical Identity Theft Misuse of a person s medical identity to wrongfully obtain health care goods, services, or funds. Provider: theft of provider information to make false claims or fill fraudulent prescriptions. Beneficiary: theft of beneficiary information to obtain goods or services. Billing for unnecessary services or items You can bill only for services that are included in provider plan and are medically necessary. Some providers bill for services that were not medically necessary.
12 Billing for services or items not rendered Billing for a service or item without providing the service or item. The fact that alternate services or items were provided is not a justification. Upcoding Billing for a service at a level of complexity that is higher that the service actually provided. Example: billing for an hour long session when service was only provided for a twenty minute session. Example: billing for a surgical tooth extraction when it was a simple removal.
13 Unbundling Billing multiple procedure codes separately when there is a comprehensive code that covers everything. Non-covered services or items Invoices involving services that are not covered. Example: provider bills physical therapy received from nonlicensed individual as though it was from a licensed physical therapist.
14 Kickbacks Rewarding sources of new business. Example: giving out gift cards or waiving co-payments for referring new clients. Beneficiary Fraud Ineligibility Fraud Card sharing Doctor shopping Drug diversion
15 How the government deals with Fraud The False Claims Act The Anti-Kickback Statute The Stark Law Etc.
16 The False Claims Act Knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud any health care benefit program; or to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program.
17 What it actually prohibits: Presenting a false claim for payment or approval; Making or using a false record or statement in support of a false claim; Conspiring to violate the False Claims Act; Falsely certifying the type/amount of property to be used by the Government; Certifying receipt of the property without knowing if it s true; Buying property from an unauthorized Government officer; and Knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay the Government.
18 Examples Billing for services not provided Unbundling Upcoding
19 Damages Civil Penalties: Up to $11,000 for each claim. Plus three times the amount of damages the Government sustains because of the claim. Criminal Penalties: Upon conviction, violator may be fined, imprisoned or both. Fines up to $250,000 If the violation resulted in death, imprisonment may be for any term of years, or life.
20 Whistleblower Protection Protection is offered to employees, former employees, or members of an organization who report suspected misconduct to people or entities that have the power to take corrective action.
21 The Anti-Kickback Statute Prohibits the knowing and willful offer, payment, solicitation, or receipt of any compensation, in cash or in kind, to induce or in return for referring an individual for the furnishing or arranging of any item or service for which payment may be made under a health care program.
22 Details Compensation can be anything of value, including gift cards, reduced rent, or payments higher than fair market value. Compliance with the Anti-Kickback Statute is required for participation in Federal health care programs.
23 Damages Civil: Up to $50,000 per violation, plus three times the amount of the compensation that was received. Can also lead to exclusion from Federal health care programs. Criminal: Fine up to $25,000 Imprisonment up to 5 years.
24 The Stark Law Prohibits a physician from making a referral for certain designated health services to an entity in which the physician (or family member) has an ownership or investment interests, or which he or she has a compensation arrangement.
25 Restrictions The Stark Law applies only to Medicare and Medicaid programs. Only applies to certain health services.
26 Damages Only civil penalties. Claims that result from a violation of the Stark Law are not payable. Up to $15,000 fine for each service provided. Up to $100,000 fine for entering into an arrangement or scheme.
27 WASTE Overutilization of services, or other practices that, directly or indirectly, result in unnecessary costs to a health care program. Not generally considered to be caused by criminally negligent actions but rather the misuse of resources.
28 Examples Provider Ordering excessive lab tests Ordering more medications/treatments than are necessary Beneficiary Excessive office visits Obtaining more prescription medications than necessary
29 Reporting Fraud, Waste, and Abuse U.S. Government Accountability Office FraudNet 1 (800) or us at fraudnet@gao.gov Office of the Inspector General HHS-TIPS
30 Information Obtained from: CMS.gov Centers for Medicare and Medicaid Services
31 THANK YOU
The following presentation was based on the
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