PERC - Fraud and Abuse

Thursday, April 11, 2013 02:34 PM

The Patient Protection and Affordable Care Act makes an historic, ten-year, $350 million investment to prevent, detect and fight fraud in Medicare, Medicaid and the Children’s Health Insurance Program—including criminal efforts to exploit the new law. The federal government is committed to reducing Medicare fraud 50% by 2012, and they have initiated a coordinated interagency effort to do so. Some of the key integrity provisions of the law are intended to increase the government’s ability to:

1. Ensure only legitimate health care providers and suppliers are enrolled in federally funded health care programs
2. Reduce improper payments
3. Curtail activities that undermine the financial integrity of Medicare, Medicaid and the State Children’s Health Insurance Program

To facilitate the sharing of information among agencies, databases have been consolidated into an integrated repository. HHS has projected, and CBO has affirmatively scored, that for every $1 invested in fraud prosecutions the government will recover $17. Health Care Fraud Prevention and Enforcement Action Teams (HEAT) were formed and launched in seven areas in 2009 to expedite the health care fraud criminal investigations and prosecutions. Under the new integrity provisions the administration is seeking to expand the number of teams to 20 by the end of 2012.

Practice-based compliance programs will become an HHS requirement for enrollment in Medicare, Medicaid and other federal programs. Proposed rules are anticipated before the end of 2010. Federal laws heavily favor the government, from the initial inquiries into the formal investigative phases. Implementation of a compliance plan can offer protection. Once rules have been published, a model compliance plan will become available.

The Recovery Audit Contractor initiative, enacted in 2006 (as part of the Tax Relief and Health Care Act) and piloted in 2008, is fully operational for Medicare fee for service in all 50 states. Under PPACA the RAC is being expanded into Medicare Advantage, Part D and Medicaid. States are required to contract with a Recovery Audit Contractor by 12/31/10. The RACs perform two types of reviews: automated and complex. The RAC uses sophisticated, proprietary software to review the last three years of provider claims for hospital inpatient and outpatient, skilled nursing facility, physician, ambulance and laboratory services, and durable medical equipment. The automated reviews require no additional documentation while the complex review may require the provider to submit medical documentation to complete the review process. They can review charts as part of their audits, and can extrapolate their findings from those reviews. They are looking for payment errors, including duplicate payments, appropriate clinical documentation to support billed codes, fiscal intermediaries’ mistakes, medical necessity and coding.

To qualify for the exception to prohibition on self-referral, physicians who perform in-office MRIs, CT scans or PET scans will be required to inform patients in writing at the time they order these tests that they may obtain these services elsewhere. They must also provide the patient with a written list of those who furnish such services. The anticipated implementation date of the final regulation is Jan. 1, 2011.