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1 CME Information This article is a CME certified activity. To earn credit for this activity visit: CME Released: 06/11/2012; Valid for credit through 06/11/2013 Target Audience This activity is intended for physicians and other medical professionals who deliver care to Medicare and Medicaid beneficiaries. Goal The goal of this activity is to describe ways the Centers for Medicare & Medicaid Services (CMS) is overhauling its fraud prevention and detection capabilities. Learning Objectives Upon completion of this activity, participants will be able to: 1. Describe the strategies that CMS has undertaken to detect and to prevent fraud and abuse in the Medicare and Medicaid programs. Credits Available Physicians - maximum of 0.75 AMA PRA Category 1 Credit(s) All other healthcare professionals completing continuing education credit for this activity will be issued a certificate of participation. Physicians should claim only the credit commensurate with the extent of their participation in the activity. Accreditation Statements For Physicians Medscape, LLC is accredited by the Accreditation Council for Continuing Medical Education (ACCME) to provide continuing medical education for physicians. Medscape, LLC designates this enduring material for a maximum of 0.75 AMA PRA Category 1 Credit(s). Physicians should claim only the credit commensurate with the extent of their participation in the activity. Medscape, LLC staff have disclosed that they have no relevant financial relationships. Contact This Provider For questions regarding the content of this activity, contact the accredited provider for this CME/CE activity noted above. For technical assistance, contact CME@medscape.net Instructions for Participation and Credit NLPN

2 There are no fees for participating in or receiving credit for this online educational activity. For information on applicability and acceptance of continuing education credit for this activity, please consult your professional licensing board. This activity is designed to be completed within the time designated on the title page; physicians should claim only those credits that reflect the time actually spent in the activity. To successfully earn credit, participants must complete the activity online during the valid credit period that is noted on the title page. To receive AMA PRA Category 1 Credit, you must receive a minimum score of 70% on the post-test. Follow these steps to earn CME/CE credit*: 1. Read the target audience, learning objectives, and author disclosures. 2. Study the educational content online or printed out. 3. Online, choose the best answer to each test question. To receive a certificate, you must receive a passing score as designated at the top of the test. We encourage you to complete the Activity Evaluation to provide feedback for future programming. You may now view or print the certificate from your CME/CE Tracker. You may print the certificate but you cannot alter it. Credits will be tallied in your CME/CE Tracker and archived for 6 years; at any point within this time period you can print out the tally as well as the certificates from the CME/CE Tracker. *The credit that you receive is based on your user profile. Hardware/Software Requirements To access activities, users will need: A computer with an Internet connection. Internet Explorer 7.x or higher, Firefox 4.x or higher, Safari 2.x or higher, or any other W3C standards compliant browser. Adobe Flash Player and/or an HTML5 capable browser may be required for video or audio playback. Occasionally other additional software may be required such as PowerPoint or Adobe Acrobat Reader. As an organization accredited by the ACCME, Medscape, LLC, requires everyone who is in a position to control the content of an education activity to disclose all relevant financial relationships with any commercial interest. The ACCME defines "relevant financial relationships" as financial relationships in any amount, occurring within the past 12 months, including financial relationships of a spouse or life partner, that could create a conflict of interest. Medscape, LLC, encourages Authors to identify investigational products or off-label uses of products regulated by the US Food and Drug Administration, at first mention and where appropriate in the content. Author Peter Budetti, MD, JD Deputy Administrator, Centers for Medicare & Medicaid Services, Washington, DC Disclosure: Peter Budetti, MD, JD, has disclosed no relevant financial relationships. OLPN

3 Peter Budetti, MD, JD, does not intend to discuss investigational drugs, mechanical devices, biologics, or diagnostics not approved by the FDA for use in the United States. Peter Budetti, MD, JD, does not intend to discuss off-label uses of drugs, mechanical devices, biologics, or diagnostics approved by the FDA for use in the United States. Editors Jane Lowers Group Scientific Director, Medscape, LLC Disclosure: Jane Lowers has disclosed no relevant financial relationships. Neil Chesanow Senior Clinical Editor, Medscape, LLC Disclosure: Neil Chesanow has disclosed no relevant financial relationships. CME Reviewer Dominique Brooks, MD Disclosure: Dominique Brooks, MD, has disclosed no relevant financial relationships. How CMS Is Fighting Fraud: Major Program Integrity Initiatives CME Peter Budetti, MD, JD CME Released: 06/11/2012; Valid for credit through 06/11/2013 PLPN

4 Slide 1. Peter Budetti, MD, JD: Hello, I am Dr Peter Budetti. I am the Deputy Administrator for Program Integrity of the Centers for Medicare & Medicaid Services. I am talking to you today about how the Centers for Medicare & Medicaid Services is fighting fraud and giving you some detail on our major program integrity initiatives. QLPN

5 Slide 2. The goal of this continuing education activity is for you to be able to describe the strategies that the Centers for Medicare & Medicaid Services have undertaken to detect and to prevent fraud and abuse in the Medicare and Medicaid programs. Slide 3. The Center for Program Integrity is a component within the Centers for Medicare & Medicaid Services. The Center for Program Integrity is designed to ensure that the money that goes out to pay for care for beneficiaries is actually going to legitimate providers for covered, appropriate, and reasonable services for eligible beneficiaries. The money needs to go to the right people for the right thing and not to be somehow diverted to illegal or other fraudulent purposes. The Center for Program Integrity is dedicated to becoming a state-of-the-art activity to prevent and detect fraud, and to reduce waste, abuse, and other improper payments under the Medicare and Medicaid programs. RLPN

6 Slide 4. When I talk about program integrity activities, I am talking about a wide range of activities ranging from honest mistakes, to intentional deception, to downright fraud. Within the Center for Program Integrity, and within the Centers for Medicare & Medicaid Services, we are very much aware that the vast majority of the providers and suppliers whom we deal with -- the physicians and nurses -- are honest providers whom we depend on to provide the services to our beneficiaries and your patients. In recognizing that, we know that people make mistakes and that there are honest mistakes. Unfortunately, at the other end of the spectrum, there are also people who set out to steal money from the programs and not to deliver good services to beneficiaries. We treat each one of those situations very differently, and that is one of the most important aspects of the way we approach these problems in the Centers for Medicare & Medicaid Services. SLPN

7 Slide 5. The strategic direction takes into account what I just mentioned: that the approaches should be targeted to the problems that we are actually facing. One of the problems that we are facing is that the amount of fraud that we are seeing in the Medicare and Medicaid programs has grown very large. The traditional ways of dealing with fraud in our programs has been to allow people to get into the system relatively easily and pay claims relatively quickly. Now, that is appropriate for all the legitimate physicians and nurses and other professionals whom we deal with, but unfortunately it has created a soft spot that people have been able to take advantage of. So we need to move away from simply looking at where the problems may be after we have paid the bills, and we need to move into an era where we are preventing those problems from occurring in the first place. The approach that we are taking is very much to look at the real risks and to apply our resources in ways that are appropriate for those risks. The Centers for Medicare & Medicaid Services and the related agencies have been around since the beginning of the Medicare program. We need to advance the state of the art of what we are doing in program integrity to take advantage of the high technology and innovations that are possible now in the 21st century. The approach that we are taking is to let people have the opportunity to speak more to us, to exchange ideas with us, and to learn from the medical provider community what they are doing and what we can do together to work on these problems. We are no longer simply within the government. We are talking to all of our public and private sector partners as well. Finally, one of the things that is different now is that we are putting in one place the fraud-fighting policies and programs for Medicare and Medicaid. The purpose of doing that is to do a better job but also to ensure that our policies are as related to each other, as consistent with each other, as they can be. TLPN

8 Slide 6. Today I am going to focus on the National Fraud Prevention Program. I want to emphasize that we are talking about identifying real fraud, about identifying people who are not the legitimate providers who are providing services and billing appropriately. We are talking about people who are committing fraud against the Medicare and Medicaid program. We are approaching this in 2 ways. We are putting into place a new system that looks very carefully at the claims that are coming in and uses a lot of techniques to look for problems. We are also looking at changes in the way that physicians and other providers and suppliers enroll to provide services within the Medicare program and how we are screening the people who are applying to get in. I am going to talk about those 2 very closely related approaches that we have put into place over the last couple of years. ULPN

9 Slide 7. First I am going to talk about the enrollment and screening side of our initiatives. Slide 8. VLPN

10 The gateway to getting into Medicare is what is called the Provider Enrollment, Chain, and Ownership System (PECOS). PECOS is the face that you see when you enroll in Medicare. That information is of great importance. It is central to what we are doing, but it is also central to your ability to be an enrolled provider in the Medicare program and to be able to take care of Medicare patients and submit claims for the services that you have provided. PECOS is the face of provider enrollment that you deal with all the time. Slide 9. We know that many of our partners -- many of the physicians and other health professionals and suppliers who have enrolled in Medicare -- have encountered some problems in enrolling in the system, and we have had a lot of dialog to the extent that we understand that the process has been slower than it should be, it has often been quite cumbersome, and frankly in some ways it has been unreliable, because the information has not always been accurate and in the single national database. We recognize that these are changes that need to occur on the enrollment side, and we are focused on making those changes and doing so in partnership with the medical community. NMLPN

11 Slide 10. We have had a lot of interaction with the medical community over the last couple of years working on these issues. We anticipate that the changes we are making on the enrollment side will vastly reduce, by about two-thirds, the amount of time that it takes for your enrollment in Medicare to be processed and approved. We are also making changes so that the system is much more user-friendly and easier to use. And finally, we are making the system much more reliable so that all of the information will be in the same system and be up to date. NNLPN

12 Slide 11. We have set out several important guidelines for how we are going about this. We are doing it in a way that focuses on you, our customers, and what is useful from your perspective. In doing that, we are moving to an all-digital process to remove paper from the system, and we are opening up lines of communication with you in order to make the system work better from our perspective, but also work better from your perspective. NOLPN

13 Slide 12. These are a number of the changes that we have made in the enrollment system. Some are already in place. A number are still forthcoming in order to make sure that we are responding to the needs that we have been told exist in the enrollment system. We need to improve what we are doing. We want to make it work better for you. We want to make it work better in terms of our ability to get you enrolled in the program and also for us to have the information available when we need it. NPLPN

14 Slide 13. Having said that we are improving the enrollment side of things, we also need to improve the screening side of things. We are committed to doing 2 things simultaneously. We want to make it easier for the legitimate providers and suppliers to enroll in the program. At the same time, we want to make it harder for the fraudulent providers and suppliers to get in or to stay in. We know that fraudulent providers have been able to exploit our enrollment system. They have been able to register with stolen medical identities. They have been able to register phony addresses. They have been able to get back in even after we kicked them out and revoked their billing privileges, and they have been able to stay in the local decentralized systems without being in the national system and therefore be less likely for us to detect that they are still able to bill Medicare when they should not. NQLPN

15 Slide 14. We have put into place a number of important provisions related to screening providers. These are provisions that build on things that we were already doing, but there are new regulations that were put into place under the very strong antifraud provisions in the Affordable Care Act. These regulations took place just a little over a year ago, in March 2011, and they call upon us to do things in a way that meets the requirements of the statute and provide information in a new way. The first point is what I mentioned earlier: that the way that we are going about screening new providers is based on the actual risks we face with any given category of providers. There is another ability under this regulation, and that is for the secretary of Health and Human Services to declare a moratorium on the enrollment of new providers and suppliers when that is necessary to fight fraud. That could be done in a given geographic area or it could be done by a particular type of provider or supplier. We have the authority now for us to suspend payments pending investigation of a credible allegation of fraud, and we have established a process for being very careful about allegations and identifying only the ones that are sufficiently credible to warrant suspension of payments. Finally, one of the provisions in the Affordable Care Act that we have put into place is a requirement that if a provider or supplier is terminated for cause in a Medicaid program in one state, he or she will then be terminated for cause in other states, and this cuts across Medicare as well. The people who are sufficiently problematic that they are terminated for cause by one state will not simply be able to move around the country easily and continue to bill Medicaid and Medicare programs. NRLPN

16 Slide 15. I mentioned that we are committed to risk-based screening, and this is very important. Under the Affordable Care Act, we identified the different providers and suppliers by category and put them into one of 3 risk levels: limited, moderate, and high risk. Physicians, medical groups, and a number of other providers and suppliers, whom you can see on screen, were put in the limited category. The moderate category includes a number of providers such as physical therapists. The high-risk category is restricted to new durable medical equipment suppliers and new home health agencies. So by category, people are put into different levels of screening, and I will identify what that means in just 1 minute. I also want to point out, though, that an individual who has come to our attention in certain ways can be bumped up from a limited or moderate level to the high level. For example, if the individual has been excluded from the Medicare and Medicaid programs by the Inspector General; if the individual has been subject to a payment suspension; if he or she has been terminated for cause by Medicaid; or if he or she has been subject to other final adverse actions, such as committing certain felonies. NSLPN

17 Slide 16. Everyone is subject to checks that will look at whether or not they have the credentials that they are supposed to have. For physicians, of course, that means they have to be licensed where they are practicing medicine, and that kind of background check makes sure that they are still active, that they meet all the requirements. Those checks apply to all levels: limited, moderate, and high. The moderate level is also subject to unannounced site visits to make sure that physicians are actually where they say they are; that they are actually operational and doing the things that they say they are doing; and, of course, that they are submitting bills for those things. And finally, the highest level is subject to fingerprinting and criminal background checks through the Federal Bureau of Investigation. NTLPN

18 Slide 17. We have done a number of things to improve the screening, as I have just described. A number of the kinds of activities that we engaged in to screen providers previously were being done manually, so that we were checking individually with state licensure agencies, for example, to make sure that people had their appropriate licenses in place. We were separately checking other databases for certain requirements to see whether or not the credentials were in place or whether the physician was still alive, for that matter. Now we have put in place a new Automated Provider Screening system that does all of those things through an advanced technological approach that looks into many different databases and screens them simultaneously. So if someone has been excluded by the Office of the Inspector General, if that person has been convicted of certain felonies, or if he or she has submitted an address to us that turns out to be an empty field and not a legitimate operation, those are the kinds of things that our new system will check on very quickly through this automated approach. NULPN

19 Slide 18. The Automated Provider Screening system has been in place since the end of The Automated Provider Screening system is being used to validate the data we receive on the enrollment applications when you apply to be enrolled in the Medicare program. The Automated Provider Screening system will identify the level of risk that we are seeing, based upon certain specific analytic techniques, as to whether or not someone who is applying to get into the program represents a risk of being someone who does not belong in the program, and this will assign a risk score to each provider and supplier who enrolls in the program. That will help us apply our resources on the basis of the real risk that we are facing. NVLPN

20 Slide 19. The Automated Provider Screening system, as I mentioned, checks many different sources of information to verify the person's identity; to check on the person's licensure; to check on his or her criminal history; to look at whether the person has been subject to certain sanctions; to see whether or not the individual's National Provider Identifier is still active; to see whether or not he or she is found in the files from the Social Security Administration of people who have passed away; and also to check on an individual's locations. All of these are the kinds of things that we are looking at with this Automated Provider Screening system to make sure that the people in the program and the people who get into the program meet all of the requirements. OMLPN

21 Slide 20. The Automated Provider Screening system will allow us to take a look at many sources of information, some of which we did manually previously and some of which represent expanded but very important information for us to have. An important aspect of this system is that it will allow us to monitor everyone's status on an ongoing basis. If someone dies, if someone loses his or her medical license, if someone is convicted of certain felonies, the system will create an alert so that we can take action appropriately based on the alert and see whether that is somebody whose enrollment should remain active in the Medicare program. The Automated Provider Screening system will be implemented in a way that it will be uniform across the country rather than be applied in a completely decentralized manner as the enrollment process has been in the past. ONLPN

22 Slide 21. I want to talk about the other major pillar of our approach to fraud prevention: the way we are now screening claims coming into the Medicare system through an advanced predictive analytic system. OOLPN

23 Slide 22. This is our Fraud Prevention System, and the purpose of this system is straightforward. We need to prevent the payment of claims that have been identified as potentially fraudulent. We do not want to make payments that we should not make. We do not want to be in the position of making those payments, finding out after the fact, and then trying to get them back. We want to do this in the first place. We want to integrate this into a comprehensive system that will provide effective and timely administrative actions by the Centers for Medicare & Medicaid Services. And we want to ensure that what we are doing, we are doing right. We want to make sure that what we are doing is effective. We want to minimize false positives. We want to make sure that it is based on the real risks that we are facing. And, of course, we want it to be an efficient system that will pay off over time in terms of the amount of effort that we are taking and the amount of burden that the system is imposing. Slide 23. The system was implemented as of June 30, Since that time, it has been monitoring between 4 and 5 million Medicare fee-for-service claims every day before they are paid. It generates alerts that allow us to look at potential problem areas. This is the core of our risk-based approach. What do we do with those alerts? We provide the highest risk alerts that we are getting from the system to real human beings to take a look at whether or not we are facing a problem. Those human beings are the investigators who work with our antifraud investigative contractors, the Zone Program Integrity Contractors. We ask them to take a look at the highest risk alerts and to see whether or not an alert from the fraud prevention system warrants us taking actions, either within the Centers for Medicare & Medicaid Services or referrals to law enforcement. It is an interactive system. It involves both high tech and human oversight. OPLPN

24 Slide 24. The advantages of the automated Fraud Prevention System are great. It is providing, for the first time, access to highquality data on a nationwide basis before the claims are paid. It allows us to understand the patterns of care we are seeing that are problematic, and it allows us to identify vulnerabilities for potential fraud. It also allows us to be interactive with the system, so that when we follow up on a lead, if it proves to be a problem, we can use that information to validate a high-risk score for that certain problem that we have identified. On the other hand, if it does not pan out, and it does not look like it is a problem that deserves attention, we can also use that to modify the system so that we are not looking at the same potential problem over and over again if it in fact does not prove to be a real problem. And finally, the core of the system is to allow us to intervene early on, so that we can make changes and address issues before they have grown to very large proportions. OQLPN

25 Slide 25. The Fraud Prevention System uses advanced technology that looks at the information that we are getting related to claims in a number of ways. It looks at specific kinds of rules that allow us to determine what should and what should not be paid based on relatively straightforward things, like the fact that people should not be subject to multiple surgeries on the same day for more body parts than their bodies actually have: for example, surgery on 3 eyes on the same day -- simple, straightforward kinds of assessments. It allows us to look for anomalies, for things that are very different than they otherwise should be, and that is an important analytical step that we take. It allows us to do true predictive modeling, to take the results from investigations, from law enforcement actions, and from other kinds of activities that have confirmed that certain things are problems, and to predict, based on that, where the problems might be, and then when we spot a risk, to take actions that will allow us to verify or not verify a prediction was accurate. Finally, the highest level of analytics that the Fraud Prevention System is capable of is to look at relationships among systems. If a fraud occurs, such as with a durable medical equipment supplier, the people associated with that supplier may or may not be associated with a number of other healthcare entities, and the relationships may be very instructive in terms of where we need to target our resources. So the Fraud Prevention System -- this technology that we put into place -- is very sophisticated, quite comprehensive, and allows us to do a variety of different kinds of analytics to track down and prevent fraud from occurring. ORLPN

26 Slide 26. The diagram in front of you shows the way that the Fraud Prevention System goes about this. The yellow box is very important, because the yellow box tells you that the system is capable of looking at far more than just the information that comes in with a single claim. The system is capable of using information from the complaints that we get from Medicare beneficiaries to the MEDICARE call line. The system is capable of integrating information from law enforcement investigations. It can take into account a variety of information from many different sources, and it can learn, and so it can become more and more sophisticated and more and more reliable over time. The models that we build are based upon the kinds of fraud that we have seen and the kinds of fraud that we anticipate, and those are the models that are used to analyze all of that data and information that are within the system. Then what it generates is a risk level, which then is used to create alerts that we pass on to our investigators to take a look to see whether or not they represent the kind of problem that we think the alerts represent. And then it is a feedback loop, and that is why the diagram looks like this, because the system grows and learns over time and is capable of taking in many different kinds of information, but also learning from what is generated by the system itself. OSLPN

27 Slide 27. We have also engaged in a variety of outreach activities with the medical community over the last couple of years. One good example of that is something that the Centers for Medicare & Medicaid Services did in conjunction with the California Medical Association, the Medicaid Agency in the state of California, and others. This was a series of activities -- 1 each week in 5 different cities in California in September to raise awareness about healthcare fraud, and in particular to raise the level of understanding of what physicians, nurses, and other healthcare providers can do, both to protect themselves and their patients from the consequences of fraud and to help us identify and prevent fraud in the first place. This is one of a large number of activities that we have engaged in to bring the medical community into a partnership with us, because the kinds of fraud that we are going after are not things that the legitimate providers and suppliers are engaging in. It is clear now that the medical community recognizes that the best way for us to approach this is to work together with those of you who do represent the honest physicians and honest nurses, and who sometimes know where the problems can be, to work with us to prevent and detect fraud. We are very much committed to that engagement, and we will continue to do that as we proceed with our fraudfighting activities. OTLPN

28 Slide 28. One particular concern that we have, and that many of you likely have, is with the medical identity theft that some physicians have experienced. This is a bad situation. If a physician has his or her medical identity stolen, then fraudsters can use that identity to bill as if the physician were getting paid, as if the physician were delivering medical services, and in fact it may very well be that the services were never delivered, and the physician might not even know that someone is using his or her identity to bill Medicare and Medicaid. This is an article from February 2012 that my colleague Dr Shantanu Agrawal and I published in the Journal of the American Medical Association, describing both the problem and the recent initiatives that we have taken at the Centers for Medicare & Medicaid Services to help physicians both protect themselves against medical identity theft and resolve problems that might result if their identities are stolen. The problems can be quite severe if a physician is credited with hundreds of thousands of dollars of payments that he or she never received. Those funds could trigger a request from us to return money that was never actually paid. They could trigger a request from the Internal Revenue Service to pay taxes on money that was never received. And the physician's legitimate patients may also suffer if they go on the books as having received services or durable medical equipment that in fact they never received, and then might appear not to need those services or those supplies in the future when they really do need them. So this is an important aspect of our communication with the medical community, which is to protect yourself against this, protect your patients, and to work in every way that is available to you to reduce the likelihood of physician medical identity theft. OULPN

29 Slide 29. This new approach is built on top of the activities that we have been engaging in for many years. We have been involved in fighting fraud and protecting the programs for many years. The approach in the past had largely relied on what is widely called "pay and chase": to pay claims quickly, as is appropriate when they are legitimate -- and as, of course, is required under the Medicare statute -- and then to look for problems, and when we see problems after the fact, to try to recover the monies and to refer to law enforcement. Now we want to move beyond doing those things, many of which we will continue to do for some time, of course, because they are necessary. But we need to move in this new direction: to deny claims that should not be paid in the first place and to get that right. To work closely with our medical community and with the contractors that we use to do our fraud investigations to take action before payments are made in appropriate circumstances. To kick people out of the program if they do not belong in the program. To work with our law enforcement colleagues both before, during, and after the law enforcement system is brought into play. And, of course, we want to identify and work on ameliorating the root cause of the vulnerabilities that we face in our program, the perverse incentives that might exist, the opportunities that might exist for people to approach our Medicare and Medicaid programs as a source of revenue -- as a very important source of payment for medical care for our beneficiaries -- instead of for illegitimate purposes. OVLPN

30 Slide 30. Thank you very much for joining me today. To "Earn Continuing Medical Education Credit," click on the link below. Thank you very much. This transcript has been edited for style and clarity. This article is a CME certified activity. To earn credit for this activity visit: APS = Automated Provider Screening CHMC = community mental health center CME = continuing medical education CMS = Centers for Medicare & Medicaid Services CPI = Center for Program Integrity DME = durable medical equipment DMEPOS = durable medical equipment, prosthetics, orthotics, and supplies MAC = Medicare Administrative Contractor NPI = National Provider Identifier NPPES = National Plan & Provider Enumeration System OIG = Office of the Inspector General PECOS = Provider Enrollment, Chain, and Ownership System PI = Program Integrity SSN = Social Security number Disclaimer The material presented here does not necessarily reflect the views of Medscape, LLC, or companies that support educational programming on medscape.org. These materials may discuss therapeutic products that have not been PMLPN

31 approved by the US Food and Drug Administration and off-label uses of approved products. A qualified healthcare professional should be consulted before using any therapeutic product discussed. Readers should verify all information and data before treating patients or employing any therapies described in this educational activity. Medscape Education 2012 Medscape, LLC This article is a CME certified activity. To earn credit for this activity visit: PNLPN