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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
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.
Purpose
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?
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?
Overview
2
It is the policy of PerformCare
To review and investigate all allegations
of fraud and/or abuse, whether internal
or external;
To take corrective actions for any
supported allegations after a thorough
investigation; and
To report confirmed misconduct to the
appropriate parties and/or agencies.
Introduction
3
What is Fraud?
4
An intentional deception
or misrepresentation made
by a person with the
knowledge that the
deception could result in
some unauthorized benefit
to him/herself or some
other person. It includes
any act that constitutes
fraud under applicable
federal or state law.
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
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.
What is Abuse?
5
• Thoughtless or careless
expenditure, consumption,
mismanagement, use or
squandering of healthcare
resources, including incurring
costs because of
inefficient or ineffective
practices, systems or controls.
What is Waste?
6
Examples of Potential FWA
7
Falsifying Claims/Encounters • Incorrect Coding
• Inappropriate Balance Billing
• Duplicate Billing
• Billing for Services Not Rendered
• Misrepresentation of Services
• Diagnosis Does Not Correspond 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)
Examples of Potential FWA
8
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
Providing unnecessary 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
• Billing for services not rendered
• Community and home based services are
vulnerable
• Misrepresenting of falsifying documentation
of the services
• provided
• Service does not meet the requirements
for the service code
• Forgery of recipient signatures
• Treatment plans and encounter forms
• Falsifying or misrepresenting credentials
• Credentials do not meet minimum
requirements
FWA Trends in Behavioral Health and Medicaid
9
False Claims Act (FCA)
Stark Law
Anti-Kickback Statute
HIPAA
Deficit Reduction Act
The False Claims Whistleblower
Employee Protection Act
Pertinent Laws and Regulations
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.
• Claims “submitted to the government” includes claims submitted to intermediaries 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.
False Claims Act (FCA)
11
Self-Referral (Stark Law) Statutes, Social
Security Act, 1877
Pertains to physician referrals under Medicare
and Medicaid. Referrals for the provisions of
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.
Stark Law
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 by any federal healthcare program. Penalties many include exclusion from federal health care programs, criminal penalties, jail and civil penalties for each violation.
Anti-Kickback Statute
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
that referrals for healthcare services are
based on medical need and not based on
financial or other types of incentives to
individuals or groups.
Anti-Kickback Statute
14
In addition to criminal penalties, violation of the
Federal Anti-Kickback Statute could result in civil
monetary penalties and exclusion from Federal
Healthcare Programs, including Medicare and
Medicaid Programs.
Anti-Kickback Statute
16
The Health Insurance Portability and
Accountability Act (HIPAA), 45 CFR, Title II, 201-
250, provides clear definition for Fraud & Abuse
control programs, establishment of criminal and
civil penalties and sanctions for noncompliance.
HIPPA
17
Designed to restrain Federal spending while maintaining the commitment to the federal program beneficiaries.
Requires compliance for continued participation in the programs.
• Development of policies and education relating to false claims, whistleblower protections and procedures for detecting and preventing fraud & abuse must be implemented.
The Deficit Reduction Act (DRA), Public Law No. 109-171, 6032
18
31 U.S.C. 3730(h) - A company is prohibited from discharging, demoting, suspending, threatening, harassing or discriminating against any employee because of lawful acts done by the employee on behalf of the employer or because the employee testifies or assists in an investigation of the employer.
Whistleblower Employee Protection Act
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
on behalf of the government against the
person or business that committed the fraud.
Individuals who file such suits are known as
“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.
Whistleblower and Whistleblower Protections:
20
Federal law for increased access to healthcare
that included provisions specific to fraud and
abuse. PPACA increased penalties and
enforcement of healthcare crimes.
PPACA mandates state and federal agencies
to communicate about provider enrollment
for federally funded programs.
PPACA required Medicare and Medicaid
providers to have a compliance program.
PPACA reduced the requirements of “intent.”
PPACA stated that overpayments must be
reported and returned within 60 days.
Patient Protection and Affordable Care Act (PPACA – Healthcare Reform Act)
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 5 years if false statements are knowingly and willfully made for benefits or payments, or misrepresents services or fees to beneficiaries of federal health care programs.
Criminal Penalties
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 civil penalty of not more than $5,000 for each claim and also an assessment of not more than twice the amount of the claim.
Administrative Remedies for False Claims
23
PA Code • Chapter 55 Part III. Medical Assistance Manual
http://www.pacode.com/secure/data/055/partIIItoc.html
• General Regulations
http://www.pacode.com/secure/data/055/chapter1101/ch
ap1101toc.html
• Payment Regulations
http://www.pacode.com/secure/data/055/chapter1150/ch
ap1150toc.html
• MA Bulletins
http://www.dhs.state.pa.us/publications/bulletinsearch/ind
ex.htm
State Regulations
24
PA PROMISe • PA PROMISe Provider Handbooks
http://www.dhs.state.pa.us/publications/forproviders/p
romiseproviderhandbooksandbillingguides/index.htm
• Mental Health Requirements
http://www.dhs.state.pa.us/provider/mentalhealth/inde
x.htm
• PA Recovery (for information by level of care)
http://www.parecovery.org/
State Regulations
25
PA HealthChoices • HealthChoices Behavioral Health
Publications http://www.dhs.state.pa.us/publications/healthchoic
esbehavioralhealthpublications/index.htm
State Regulations
26
• Outline of Provider
Responsibilities
• PA Code
• Provider Manuals (Roles &
Responsibilities as Participating
Providers)
• Specific FWA Provider
Responsibilities
• Medically Necessary Services
• Minimum Documentation
Requirements
• Compliance Program
• Includes self-disclosure requirements
Provider Responsibilities
27
PA Code
• Provider Responsibilities 1101
http://www.pacode.com/secure/data/055/chapter1101/s110
1.51.html
• Medically Necessary Services 1101
http://www.pacode.com/secure/data/055/chapter1101/s110
1.21a.html
• Provider Prohibited Acts 1101
http://www.pacode.com/secure/data/055/chapter1101/s110
1.75.html
Provider Responsibilities
28
Provider Manuals
• PerformCare = Section VI: Provider
Responsibilities
http://pa.performcare.org/pdf/providers/resources-
information/provider-manual.pdf
• PA PROMISe Provider Handbooks
http://www.dhs.state.pa.us/publications/forproviders/prom
iseproviderhandbooksandbillingguides/index.htm
Provider Responsibilities
29
Medically Necessary Services
§ 1101.21a. Clarification regarding the definition of ‘‘medically necessary’’— statement of policy.
A service, item, procedure or level of care that is necessary for the proper treatment or management of an illness, injury or disability is one that:
(1) Will, or is reasonably expected to, prevent the onset of an illness, condition, injury or disability.
(2) Will, or is reasonably expected to, reduce or ameliorate the physical, mental or developmental effects of an illness, condition, injury or disability.
(3) Will assist the recipient to achieve or maintain maximum functional capacity in performing daily activities, taking into account both the functional capacity of the recipient and those functional capacities that are appropriate of recipients of the same age.
Provider Responsibilities
30
Minimum Documentation Requirements
Chapter 1101.51 (e):
Providers shall keep records that “fully
disclose the nature and extent of the services
rendered to MA recipients, and that meet the criteria established in this section and additional requirements established in the provider regulations.”
– “The record shall be legible throughout”
– “Entries shall be signed and dated by the responsible
licensed provider, alterations of the record shall be
signed and dated.”
– “The record shall indicate the progress at each visit,
change in diagnosis, change in treatment, and
response to treatment.”
– “Progress notes must include the relationship of the services to the treatment plan.”
Provider Responsibilities
31
Each progress note should answer
the following questions:
– Where is the service being provided?
– Why is the client there?
– What specific intervention or service was
provided to the member?
– What was the member’s response to the
interventions?
– What is the plan for follow-up?
Provider Responsibilities
32
Seven Basic Elements of a Compliance
Program as Adopted by OIG and CMS
(Under PA HealthChoices, all MCOs and providers are required to have compliance programs)
1. Written policies and procedures
2. Compliance Officer and Compliance Committee
3. Effective training and education
4. Effective lines of communication between the Compliance
Officer, Board, Executive Management and staff (incl. an
anonymous reporting function)
5. Internal monitoring and auditing
6. Disciplinary enforcement
7. Mechanisms for responding to detected problems
Compliance Plan
33
New 8th Element
• Compliance Programs Must be Effective
– Must show that compliance plans are more
than a piece of paper
– Must be able to show an effective program
that signifies a proactive approach to the
identification of fraud, waste and abuse
– How much fraud, waste and abuse have you
identified?
– How much fraud, waste and abuse have you
prevented?
Compliance Program
34
Self-Audit and Disclosure
“DHS recommends that providers conduct periodic audits to identify instances where services reimbursed by the MA Program
are not in compliance with Program requirements.”
Benefits
Good faith disclosures and cooperation can result in the following outcomes:
– Provides evidence of a robust compliance program
– Allows for integrity agreements instead of exclusion
– Allows for lower multiplier and single damages
– Prevents suspension of future payments
– Reduces potential for investigations
Internal Monitoring and Auditing
35
DPW Self- Audit and Disclosure Process:
• Outlined specific procedures to follow on the
following webpage:
http://www.dhs.state.pa.us/learnaboutdpw/fraudandab
use/medicalassistanceproviderselfauditprotocol/S_0011
51
– DHS requires providers to return
overpayments within 60 days of identifying
overpayments
– For PA HC PSR, providers should conduct self-
audits and return overpayments to BH-MCO
(PerformCare)
– Acceptance of payment by the MA Program
does not constitute agreement as to the
amount of loss suffered
Self Audits
36
Federal
– Centers for Medicare and Medicaid Services
(CMS)
– U.S. Department of Health and Human
Services,
Office of Inspector General (OIG)
– U.S. Department of Justice (DOJ)
– Federal Bureau of Investigation (FBI)
Types of Audits
Medicaid Integrity Program (MIP)
• Medicaid Integrity Group (MIG)
• Medicaid Integrity Contractors (MIC)
Prevention, Detection & Investigation
37
State
– PA Department of State
– PA Department of Insurance (DOI)
– PA Attorney General’s Office (AG)
• Medicaid Fraud Control Unit
– PA Department of Human Services (DHS)
• Bureau of Program Integrity (BPI)
• Office of Mental Health and Substance Abuse (OMHSAS)
Types of Audits
– Bureau of Program Integrity Audits
– BH-MCO Audits (Appendix F requirements under HealthChoices)
• The Primary Contractor shall designate a Fraud and Abuse Coordinator who will be responsible for preventing, detecting, investigating, and referring suspected fraud and abuse in the HealthChoices behavioral health program to the Department
Prevention, Detection & Investigation
38
Routine Audits
– Scheduled or standard data validation audits,
and claims sampling, of contracted providers to
ensure compliance with documentation, laws,
regulations and billing requirements
Purpose
– Monitor providers for possible fraud and
abuse. Control assessments, compliance
programs, and policies and procedures will be
monitored and analyzed for inconsistencies,
risk, etc.
PerformCare SIU Audits
39
Minimum Documentation
Requirements for Payment – All encounters must have a treatment/service plan, encounter
form, and progress notes
– All must meet the Minimum Documentation Requirements to receive payment from PerformCare
Treatment Plan – 1. Must be completed according to service requirements
– 2. Treatment plan date
– 3. Diagnoses and/or symptoms addressed
– 4. Clinician’s signature, credentials, and signature date
– 5. Member or guardian’s signature and signature date
– 6. Evidence member or guardian participated with treatment plan development
– 7. Goals and objectives based on evaluation and mental health strengths and needs
– 8. Treatment objectives are based of the prescribing and are part of integrated
– program of therapies, activities, experiences, and appropriate education designed
– to meet these objectives
– 9. Treatment goals are measurable
– 10. Treatment goals have established timeframes
– 11. Treatment plan addresses less restrictive alternatives that were considered
– 12. Treatment plan is easy to read and understand
– 13. Treatment plan documents necessity for services
– 14. Treatment plan documents the utilization of services
PerformCare SIU Audits
40
Progress Note
1. Must be completed for each billable encounter
2. Name or Medical Assistance identification number
3. Date of service
4. Start and stop times of service
5. Units match the claims billing
6. Place of service (specific location for community services )
7. Reason for the session or encounter
8. Treatment goals addressed
9. Current symptoms and behaviors
10. Interventions and response to treatment
11. Next steps and progress in treatment
12. Narrative with the clinical justification to support utilization and time billed
13. Supporting documentation, when applicable
14. Clinician’s signature, credentials, and signature date
PerformCare SIU Audits
41
– No progress note
– No encounter form
– No services were rendered (no shows)
– No narrative
– Progress note was team delivered but billed as separate individual encounters by each team member
– Progress note illegible
– Services provided during the encounter were non-billable
– Inaccurate units billed
– Progress note does not provide specific location
– Progress note does not have start and stop times
– Progress note is not signed and/or dated by clinician
– Encounter form is not signed by member, parent, guardian, or agent
Audit Exceptions
42
– Rounding units
– Services were unbundled and billed
individually
– Overlapping services
– Encounter form does not include start and stop
times
– Encounter form does not include type of
service
– Encounter form not signed by clinician
– Correction to note or encounter is not initialed
and/or dated
– Services are bundled in one note (needs to be
in separate notes)
– Progress note or encounter form details
(service code, units, time) do not match
– Incorrect service code or modifier billed
Audit Exceptions
43
– No valid treatment plan for date of service
– Incomplete treatment plan for date of service
– Progress note does not state reason for the
encounter
– Progress note does not state treatment plan
goals and objectives
– Progress note does not reference symptoms
or behaviors
– Progress note does not have next steps in
treatment
– Progress note does not state intervention
– Progress note or narrative is a duplication or
almost a duplication of previous note or
– narrative
– Supporting documentation was not attached,
when required
Clinical Exceptions
44
– Activities that are not included in the service
class grid for that particular service code
– Administrative services as outpatient or any
other behavioral health services
– Transportation
– Duplicate or overlapping services
– Member grievance hearings
– Clinician does not meet requirements to provide
service
– Progress notes that do not fully describe or
misrepresent the services provided
Non-billable Activities
45
Initial identification of potential fraud through:
• Retrospective Claims reviews
• Internal Requests for Review
• Service Calls/Inquiries from Members, Vendors and/ or Providers
• Reports from Members, Providers, Clients or other sources (i.e., billing staff, etc.)
• Data Mining
• Hotline Calls
SIU Investigative Process
46
Initial review • Evaluation of complaint
• Evaluation of all supporting documentation
• Review historical data for any previous referrals with similar reasons/patterns
• Review case with all appropriate internal resources
• Decide on action o No evidence of fraud or abuse:
Findings are documented and results reported back to the referral source
o Potential fraud and/or abuse: SIU will open a case
SIU Investigative Process
47
Investigation
• Gather pertinent documents
• Run Data query for all claims in
designated time period
• Random Sample of member
claims requested
• Review documentation.
Involve other Departments as
necessary
• Case Findings and Action Plan
established
SIU Investigative Process
48
Action Plan (may include any or all)
• Pursue recovery of overpayments
• Require Corrective Action Plan (CAP)
• Review for credentialing issues
• Possible referral to State or Federal Partners
• Monitoring Program (6 or 12 months)
• Provider Education
SIU Investigative Process
49
Noncompliance with Claims
Audit (may include any or all)
• Reversal of Claims
• Prepayment Review
• Review for Dis-Enrollment and
Suspension of Referrals
• Referral to State Medicaid
Agency
• Provider and/or Member flags
for Monitoring Claims
Activities
SIU Investigative Process
50
Initial Request Letter Notification (30 Days) • List of members’ records requested
• Date records are due
• Investigator’s name and address for mailing
2nd Request Letter for Records (If Necessary, 15 Days) • 1st request letter included
• Date extension for record receipt
• Consequences for non-compliance
Findings Letter • Date for receipt of overpayment payment
• Detailed spreadsheet with overpayment issues outlined
• Corrective Action Plan and due date
• Provider Education to be done by Provider Relations
If Applicable – Payment Arrangement Letter • Arrangements for provider payment
• Signature required
Provider Correspondence
51
To eliminate FWA successfully providers must work together with PerformCare to prevent and identify inappropriate and potentially fraudulent practices. This can be accomplished by:
• Monitoring claims submitted for compliance with billing and coding guidelines;
• Adherence to Treatment Record Standards;
• Education of all staff members responsible for medical records (billing, coding, maintenance); and
• Referring cases of suspected FWA
Goal: Eliminate Improper Payment Resulting from FWA
52