welcome to the "health care fraud and program integrity: an overview for providers" presentation. the centers for medicare & medicaid services (cms) is responsible for reducing losses from fraud and improper payments, and for improving the integrity of the medicaid program. cms, in recent years, implemented strategies that identify
fraudulent claims prior to payment, that ensure enrollment of eligible and honest participating providers, and that swiftly recover improper payments. throughout this presentation, participants will receive an overview of the laws, regulations, and guidance in place that may prevent providers and their staff from experiencing the consequences
of noncompliance. after reviewing this presentation, the learner should be able to: recognize at least two types of medicaid fraud, waste, or abuse; identify two laws against medicaid fraud and abuse; recall two steps that may be taken to prevent fraud, waste,
and abuse; recognize two medicaid anti-fraud measures taken by the government; and recall where to report medicaid fraud, waste, or abuse. let's get started by looking at some figures related to fraud, waste, and abuse in the medicaid program. in 2015, medicaid covered medical expenses for more than 70 million
beneficiaries through 56 state and territory administered programs. according to cms, the total cost (state and federal, including administrative costs) of this coverage in fiscal year (fy) 2015 was $547.7 billion. the federal government paid $341.6 billion of those costs. the government accountability office
has designated medicaid as a program at high risk for improper payments due to vulnerability to fraud, waste, and abuse. improper payments are those that should not have been made or that were made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements.
such payments "include those made for treatments or services that were not covered by program rules, that were not medically necessary, or that were billed for but never provided." while some portion of improper payments may be the result of fraud, a majority of improper payments are the result of unintentional human
error, such as failure to document a service properly. the u.s. office of management and budget estimates improper payments made under the medicaid program totaled $29.12 billion in fiscal year 2015. this figure represents a 9.78 percent improper payment rate. nonetheless, the case examples discussed later in this presentation
suggest fraud, waste, and abuse are a significant enough portion of improper payments that such cases should be investigated and prosecuted. improper payments divert resources away from necessary care covered by medicaid program rules, and may subject health care professionals to recoupment. if the improper payment
is the result of fraud or abuse, the provider may also face criminal penalties and other sanctions including an exclusion from participation in federal health care programs. by becoming aware of the extent and nature of improper payments, health care professionals may put themselves in a better position to help prevent and detect
medicaid fraud while protecting their practices and the medicaid program. waste is not defined in the rules that govern the medicaid program, but "is generally understood to encompass the overutilization or inappropriate utilization of services and misuse of resources, and typically is not a criminal or intentional act." examples
of waste by a beneficiary could include making excessive office visits or accumulating more prescription medications than necessary for treatment of specific conditions. waste by a provider could include ordering a comprehensive metabolic panel when a blood urea nitrogen is the only test needed. it can also mean ordering magnetic resonance
imaging instead of a mammogram for preventive care. waste is an important issue all providers should keep in mind, but this presentation will focus on fraud and abuse. in the federal medicaid regulations, abuse is defined as: "provider practices that are inconsistent with sound fiscal, business, or medical practice, and
result in an unnecessary cost to the medicaid program, or in reimbursement for services that are not medically necessary or that fail to meet professionally recognized standards for health care. it also includes beneficiary practices that result in unnecessary cost to the medicaid program." providers that improperly bill for
services and beneficiaries that cause unnecessary costs risk losing continued eligibility to participate in the medicaid program and may face criminal and civil monetary penalties. a provider can abuse the medicaid program even if there is no intent to deceive. fraud is different. it involves intent to deceive.
in general, health care fraud involves making a false statement or misrepresentation of material facts to obtain a payment the provider is not otherwise entitled. health care fraud can be committed by anyone, including providers, beneficiaries, corporate officials, and others. the rules governing medicaid define
"fraud" as: "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." for purposes of enforcement, there is a difference between unintentional
mistakes and fraudulent or abusive behavior. for example, submitting a mistaken claim for payment is different from submitting the same claim "with actual knowledge of the falsity of the claim, reckless disregard, or deliberate ignorance of the falsity of the claim." an honest mistake should lead to the return of funds. a fraudulent or abusive claim
may result not only in a refund but also in administrative, civil, and criminal penalties. these penalties range from monetary fines and damages to prison time and exclusion from federal health care programs, including medicaid. there are many types of fraud, waste, and abuse in the medicaid program including: medical identity theft; billing for
unnecessary items or services; billing for items or services not provided; upcoding; unbundling; items or services not covered; kickbacks; and beneficiary fraud. we will discuss these types of fraud in this presentation mainly in the context of fee-for-service (ffs) rather than cost-based services such
as nursing homes. there may be other types of fraud in facilities such as nursing homes where reimbursement depends on adjusted cost reports, and in delivery systems where payment takes the form of prepaid or per capita payments. some of the examples we will discuss involve medicare, but the fraud, waste, and abuse aspects are
usually just as applicable to medicaid. medical identity theft involves the misuse of a person's medical identity to wrongfully obtain health care goods, services, or funds. more specifically, medical identity theft is defined as anyone who "without lawful authority knowingly and willfully purchases, sells or
distributes, or arranges for the purchase, sale, or distribution of a beneficiary identification number or unique health identifier for a health care provider" in medicare, medicaid, or the children's health insurance program (chip). this is often done "to obtain or bill public or private payers for fraudulent medical goods or services."
unique medical identifying information for physicians includes the national provider identifier, tax identification number, u.s. drug enforcement administration number, and state medical license number. physician medical identifiers are used for such things as identifying the physician of record on claims
and for tracking purposes. stolen physician identifiers may be used to fill fraudulent prescriptions, refer patients for unnecessary additional services or supplies, or bill for services never provided. beneficiary medical identifiers include medicaid cards and numbers. these identifiers may be used to support
fraudulent billings for items or services not provided, or to enable an ineligible person to receive services by impersonating a beneficiary. a beneficiary that shares their card to help another may not mean to cause harm to the medicaid program. no matter the intent, card sharing is considered fraud, hurts the medicaid program, and can also hurt the beneficiary
who shares their card. a nebraska pharmacist was sentenced to 110 months in prison followed by three years of supervised release after pleading guilty to 12 counts of health care fraud and six counts of identity theft. the pharmacist forged provider names and credentials and used the names of children of his customers, all of whom were unaware
of the scheme, for prescriptions of an expensive cystic fibrosis drug he never dispensed and for patients who did not have the disease. nebraska medicaid paid him more than $14.4 million dollars on those claims. much of that money supported a gambling addiction at nearby casinos. he was ordered to repay the entire $14.4 million and
had property seized as well. one of the providers whose identity was compromised had 185 medicaid claims with his information on them, and he denied in an affidavit that he had written any of the prescriptions in the fraud scheme. this case illustrates the importance of monitoring medicaid services attributed to your identifiers.
for state medicaid agencies (smas) and managed care plans, this also emphasizes the importance of monitoring and auditing the utilization of high-priced, specialized drugs. another example of how provider identity theft may become part of a health care fraud scheme involves the owner of a dme company in
texas. the owner, his wife, and other employees all admitted to participating in the scheme, including recruiting beneficiaries to give up their medicare or medicaid numbers, misappropriating physicians' medical identifiers, submitting fraudulent billings, and submitting more than $11 million in false claims, which
represented about 85 percent of their income. in many instances the physicians had not seen the patients, and beneficiaries never received the materials ordered in their names. in 2013, the owner was sentenced to 12 years in prison and ordered to pay $6.1 million in restitution. a louisiana provider was convicted
on 18 counts of health care fraud, conspiracy, and paying kickbacks for using recruiters to obtain medicare numbers and subsequently billing medicare for dme and orthotics those patients did not need or want, and in some cases were not provided. a large portion of the $3.2 million in claims she billed to medicare were fraudulent.
in addition to false claims for dme supplies not provided, she also upcoded back and knee braces to more expensive versions while providing cheaper versions to the patients. the press release does not indicate if any other medical providers were implicated or compromised in the scheme. health care professionals may help prevent
identity theft by managing enrollment information with payers (keeping payers up to date about their practice location and reimbursement accounts), monitoring billing and compliance processes, controlling unique medical identifiers and prescription pads, educating and training staff, and making patients aware of the risks of medical identity theft.
an example of how monitoring billing processes can reveal identity theft comes from a michigan case. the scheme of a clinic director who was billing for fictitious services under the names of two providers who formerly worked there was exposed when one of those providers noticed bills submitted under his provider identification number for services he
did not provide. a web-based training course titled "safeguarding your medical identity" is available and approved for continuing medical education credit, along with other printable materials on the cms website. the federal medicaid statute authorizes payment for items and services included in each state's approved plan. the included items and services vary
from state to state. only those items and services included in the relevant state's plan are authorized. even if an item or service is authorized, it is still not billable under medicaid unless it is also medically necessary. under section 1902(a)(30)(a) of the social security act, states are required to "provide such methods and procedures
relating to the utilization of, and the payment for, care and services available under the plan … as may be necessary to safeguard against unnecessary utilization of such care and services." under the regulations implementing this requirement, cms says, states may "place appropriate limits on a service based on such criteria as
medical necessity." each state's medicaid program defines medical necessity in its own way. providers are responsible for ensuring services meet the definition of medical necessity or are otherwise authorized in the states where they practice. "all health care providers have a duty to ensure that the claims submitted to federal health care
programs are true and accurate." when a health care professional signs a claim, they certify the truth, accuracy, and completeness of the claim. in addition, they certify that documentation exists to support the claim. all providers are required "to keep such records as are necessary to fully disclose the extent of the
services provided" and furnish them to the state upon request. billing for unnecessary services may involve misrepresenting symptoms in the medical record and performing procedures that put the patient's health at risk. for example, a hematologist-oncologist in michigan was convicted of 13 counts of health
care fraud in addition to other related charges in connection with a scheme to defraud medicare by providing unnecessary cancer treatments and other unnecessary treatments and services to patients, some of whom did not have cancer. the physician "callously violated his patients' trust as he used false cancer diagnoses and
unwarranted and dangerous treatments as tools to steal millions of dollars from medicare, even stooping to profit from the last days of some patients' lives." he provided and administered "unnecessary aggressive chemotherapy, cancer treatments, intravenous iron and other infusion therapies to patients and unnecessary and expensive positron emission tomography
scans." in july 2015, he was sentenced to 45 years in prison and ordered to forfeit $17.6 million in restitution. the seriousness of the case and the potential health threat to the 553 affected patients prompted federal agents to work quickly to place patients abused by this physician in hospitals or with new doctors to
receive proper care. the investigative team was able to verify the initial tip and shut down the physician's operations in only four days. for their dedicated efforts, they were awarded the national health care anti-fraud association's investigation of the year award for 2015. this example shows how unnecessary services may jeopardize the health of
beneficiaries by subjecting them to the risks of treatment without the benefits. specifically, each patient was needlessly subjected to the risks of aggressive and invasive cancer therapy and other treatments. another example of unnecessary services involves a texas physician who, in 2010 and 2011, wrote
prescriptions for painkillers without regard for medical need. he also required patients to come in for unnecessary office visits and ordered unnecessary electromyograms (emgs) that are used to diagnose neurological and neuromuscular problems, but did not review the results. the costs of the prescriptions, emgs, and office visits
were billed to medicare and medicaid. in january 2013, the physician pleaded guilty to conspiracy to commit health care fraud. in october 2013, he was sentenced to 48 months in federal prison and ordered to pay $865,163 in restitution. the coconspirator in the case received 3 years' probation and was ordered to pay
$294,946 in restitution. other examples of unnecessary items or services include: a maine nursing home agreed to pay a $300,000 settlement to resolve allegations that their therapy contractor provided unreasonable, unnecessary, or unskilled rehabilitation therapy.
a massachusetts doctor was "sentenced to 360 days in the house of correction, with 11 months to serve, and the balance suspended for 10 years." he and his clinic were ordered to pay $9.3 million for giving kickbacks to rehabilitation homes for referring residents of the homes
for drug urine tests to his laboratory, even though he never saw the patients in his clinics and failed to determine if the tests were medically necessary; and the city of dallas, texas, was ordered to pay a $2.47 million settlement for allegedly ordering its billing company to always bill 911-dispatched medical transportation as
ambulance transports (advance life support) even when patients only needed basic life support transport. to be reimbursed by medicaid, the service or supply must be provided. some health care professionals bill medicaid for a covered service but do not provide the service. for example, a personal care attendant in illinois
filled out time sheets and forged a beneficiary's signature stating he provided care to the beneficiary even though the attendant had moved from the area and never provided the service. he billed a medicaid waiver program for these services. he pleaded guilty to stealing from a health care program, was sentenced to 2 years of probation
with 4 months home confinement, and was ordered to pay $6,660.75 in restitution to the medicaid program. another case of billing for services not provided involved a nevada man hired by a behavioral health services company to provide substance abuse and rehabilitative mental health treatment services. from 2012 through 2015, he
submitted fraudulent documentation for services he never performed, which his employer then used to file medicaid claims. he pleaded guilty to a gross misdemeanor charge of intentionally failing to maintain adequate records. in march 2016, he received a suspended sentence of 364 days and 3 years' probation. he was also ordered to pay
$4,726 in restitution to medicaid and perform 80 hours of community service. in the next case, the health care professional "added and padded" services and office visits to support his fraudulent claims. a family practitioner in north carolina provided typical services to medicare and medicaid beneficiaries, but
added services never provided, and in some instances even fabricated office visits, because he was not satisfied with medicaid reimbursement rates. he billed medicare and medicaid for more than $450,000 in services he did not provide, and received more than $210,000 in reimbursements from the claims.
in may 2016, he was sentenced to 18 months in prison and one year of supervised release for health care fraud. he was also ordered to pay more than $210,000 in restitution to medicare and medicaid. substandard care may have a fraud dimension. the examples so far have dealt with providers billing on a fee for service basis rather than providers that
receive cost-based reimbursement, such as nursing homes. a case involving three nursing homes illustrates that failure to provide services in the cost-based context can also lead to criminal consequences. the georgia owner of three nursing homes received $32.9 million in medicare and medicaid payments between july 2004 and september 2007
based on his certifications that he was providing a safe, clean physical environment, nutritional meals, medical care, and other services to the nursing home residents. the owner did not provide these items and services. the residents faced a near-starvation diet and suffered from poor sanitary conditions and a shortage of qualified staff. the roofs in two
of the three homes leaked so badly that employees used 55 gallon barrels and plastic sheeting to catch the rainwater. garbage was not removed, and the homes were infested by vermin, insects, mold, and mildew. instead of providing services and care, the owner used the funds to invest in real estate. the trial judge found that any services
the owner had provided were of no value. in august 2012, the owner was sentenced to 20 years in prison for conspiracy to defraud medicare and medicaid. besides the services discussed in preceding examples, each year medicaid pays billions of dollars for dme. to be reimbursable, dme must be authorized by the state's medicaid program and include
proof of medical necessity. the dme must also be provided to the beneficiary. just as some providers bill fraudulently for services not provided, other providers bill fraudulently for items not provided. the operator of a florida pharmacy was convicted of health care fraud. she billed medicaid for enteral nutrition supplies for patients who
were not intubated and did not need the supplies. instead, she provided them over-the-counter oral nutrition drinks, available in most supermarkets. she also billed medicare part d and medicaid for prescriptions her pharmacy never provided. she received 2 years in prison and had to pay nearly $350,000 in forfeitures
and restitution. a nebraska dme provider, from 2004 to 2010, fraudulently billed medicaid for nearly $66,000 of nebulizers and nebulizer supplies he never delivered. he was ordered to repay that amount to nebraska medicaid and received a 5-month jail sentence and 5 months of house arrest. the former owner/president of a
dme company with offices in utah and indiana pleaded guilty to three counts of conspiracy to commit health care fraud. according to court documents, the former owner had set a sales quota of 10 power wheelchairs per month per sales representative, that he enforced "relentlessly throughout [the company's]
western regional office, at times threatening sales reps with probation and, if low sales persisted, termination." the former owner pressured sales representatives to pursue medical necessity approval shortcuts for power wheelchairs, compelling them to "request a signed prescription and any recent chart notes. with genuine
physician chart notes in hand, sales reps chiseled away (electronically or via cut-and-paste), creating mobility evaluations that never occurred, concocting medical findings never made, and adding a physician signature never signed." the former owner received a 5-year prison sentence, was ordered to pay $4 million in restitution
by the end of 2016, and had to forfeit $776,001 of illegal gain from the scheme. three sales representatives under the supervision of the former owner pled guilty to modifying patient records, with two getting prison time and all three receiving 3 years of probation or supervised release. additionally, the the three sales representatives will have
to pay a combined $1.77 million in restitution. all three share responsibility for this amount with the former owner. upcoding is an undefined term in the federal medicaid regulations but is generally understood as billing for services at a level of complexity higher than the service actually provided or documented in the file.
a florida physician ordered and administered discounted drugs not approved by the u.s. food and drug administration (fda) and billed for more expensive fda-approved drugs. in addition to this form of upcoding, she also submitted false diagnosis codes and billed for medically unnecessary tests. in may 2016, as
a result of those instances and several other false claims, she was convicted of 162 counts of health care fraud. she can receive up to 10 years in prison for each count at her sentencing. in the louisiana identity theft case mentioned earlier, the provider billed for more expensive knee and back braces than those provided. a final example
of upcoding is billing for complex office visits when simple office visits are provided. the chief executive officer of an illinois health care company and one of his physician employees were found guilty of upcoding basic home visits to more complex evaluations, usually reserved for moderate to high severity cases. additionally, the physician employee
certified some patients as homebound when they were not. they defrauded medicare and the railroad retirement board of more than $1.8 million. providers should only bill at the level of the services actually furnished to beneficiaries. another common fraud scheme—unbundling—involves separately billing services that should be billed together at a lower rate.
according to the federal bureau of investigation, unbundling "is the practice of submitting bills in a fragmented fashion to maximize the reimbursement for various tests or procedures that are required to be billed together at a reduced cost." health care professionals who bill medicaid are responsible to know
which procedures are subject to bundling requirements and to bill accordingly. the way this type of fraud works is that the reimbursement for the individual codes billed separately is higher than the reimbursement for the single comprehensive code that should be used. an example of unbundling involves a medical billing company and
three medical groups on the east coast. the billing company convinced providers they could make more money offering nuclear stress test services in their offices. the company then billed the services twice, manipulating the codes. they also billed a separate code for interpreting the images, even though that service is covered in the stress
test code. another form of unbundling is charging for evaluation and management (e/m) services on the same day a procedure is performed. medicare rules do not allow this. physicians at a dermatology practice did this, and also upcoded the e/m services to the highest level, even though there was no separately identifiable evaluation procedure.
they agreed to repay medicare $1.9 million in an allegations settlement. unbundling also occurs in the context of laboratory providers. in this scenario, a physician orders a panel of tests for a patient as part of an annual physical. the laboratory is supposed to seek reimbursement for the entire panel at one price. instead, the laboratory bills
for each test individually, thus increasing total reimbursement. unbundling inflates the cost of medicaid services and items. health care professionals should be familiar with their state's medicaid rules regarding the services and items bundled together when billed. fraud, waste, and abuse may involve services provided but not covered by
medicaid or medicare. for example, under medicare, an eligible woman may receive one screening mammogram once every 12 months and a diagnostic mammogram when medically necessary. however, an oncologist at a maryland hospital allegedly falsified diagnoses for women so he and the hospital could bill for the more expensive diagnostic
mammogram, and upcoded screening mammograms that otherwise would not have been covered because of frequency. in april 2016, the hospital and the oncologist were ordered to pay $400,000 to settle the fraud allegations. another example of billing for services that are not covered involves a vermont physician billing
for non-fda-approved chemotherapy medications he purchased from canada and allegedly used to treat patients. to resolve the allegations, he and his company agreed to repay medicare and medicaid $500,000. health care professionals may face consequences billing for services, supplies, and items not covered, particularly if the bills
are disguised in this manner. under the anti-kickback statute, a kickback is defined as soliciting, offering, paying, or receiving remuneration (in kind or in cash) to induce or in return for referral of patients or the generation of business involving any item or service that payment may be made
under federal health care programs. rewarding sources of new business may be acceptable in some industries, but it is not acceptable when federal health care programs and beneficiaries are involved. kickbacks in health care can lead to overutilization, increased program costs, corruption of medical decision-making, patient steering,
and unfair competition. several of the cases mentioned so far have had some sort of payment for referring people for medicare-or medicaid-covered items or services. when a company providing the items or services offers perks in return for purchasing their product for medicaid or medicare beneficiaries, however,
the anti-kickback statute applies. a pennsylvania sleep apnea mask manufacturer offered free call center services to dme providers in exchange for providing their masks to medicare, medicaid, and tricare beneficiaries. otherwise, dme suppliers would have to pay a monthly fee for call center services based on the number of masks from other manufacturers
their patients called about. the company must pay $34.8 million to the federal government and another $660,000 to various smas to resolve alleged violations of the false claims act (fca) and anti-kickback statute. a whistleblower who originally alerted the government to the fraud will receive almost $5.4
million for exposing the fraud. a multinational company headquartered in japan with an american subsidiary office reached a $306 million settlement with the federal government and several states over allegations of violating the fca by offering improper financial inducements to purchase their endoscopes and other surgical
products. according to the whistleblower lawsuit, the company offered hospitals and physicians "grants, fellowships, consulting payments, free trips, no-charge loans for equipment, along with other incentives." new york's medicaid program received $7.7 million of that settlement. the company was also required to enter into a 5-year corporate integrity agreement
with the u.s. department of health and human services, office of inspector general (hhs-oig) focusing on strengthening its compliance program to guard against future violations. the two examples of kickbacks discussed so far have involved companies that offer kickbacks for using and promoting their products. providers who pay kickbacks can
also face consequences. in this case, the prior owners of a company providing pharmacy services through home delivery gave gift cards and routinely waived copayments to generate referrals or enrollment of medicare and medicaid patients as customers. the current owners agreed to a settlement of $5 million dollars
for damages and penalties that occurred prior to their ownership. claims resolved under civil settlement are considered allegations only and therefore no determination of liability is made. visit the hhs-oig website for more examples of provider prosecutions and settlements resulting from the types of fraud discussed.
common types of medicaid provider fraud include: a. billing for unnecessary items or services; b. billing for items or services not provided; and c. upcoding d. all of the above correct answer:
d. all of the above. medicaid beneficiaries are also sometimes involved in fraud and abuse cases. common forms of beneficiary fraud include eligibility fraud, card sharing, doctor shopping, and drug diversion. eligibility fraud involves misrepresenting one's circumstances to obtain program coverage for
services one does not qualify. for example, a federal jury convicted members of a family from belize, which included a married couple and the husband's two sisters, of using fake ids and lying on passport applications to fraudulently obtain benefits from several state and federal agencies, including medicaid.
although the husband only stole a little more than $1,000 from medicaid, he stole about $300,000 from other programs. the husband faces up to 290 years in prison and up to $4.75 million in fines. the other three defendants face possible sentences from 20 to 83 years and fines from $250,000 to $2 million. in another recent case, a tennessee
woman was sentenced to six years' supervised probation and must repay $25,131.92 to tenncare, tennessee's medicaid program, for falsifying her income to qualify for benefits. other forms of beneficiary eligibility fraud include adding unrelated persons as family members, falsifying residency status, and falsifying provider time reports
and stealing a provider's identity. card sharing occurs when a beneficiary shares their medicaid identity card with a person who is not covered in order for the noncovered person to receive services in the beneficiary's name. this practice may expose the beneficiary to the danger of identity theft and
compromise the integrity of the beneficiary's medical record. health care professionals should require an additional form of beneficiary identification to discourage card sharing. doctor shopping involves beneficiaries visiting different health care professionals to obtain multiple prescriptions for the same or a
similar type of drug. this practice may endanger the beneficiary's health as well as subject the medicaid program to unnecessary expense. if the health care professional has access to a prescription drug monitoring program, he or she may be able to see whether another prescriber has
already written a prescription that is the same as or similar to the one the patient is requesting. the state of florida recently reported a 65 percent reduction in doctor shopping, or "multiple provider episodes" as they call it, through widespread use of their prescription drug monitoring program. drug diversion is the diversion
of prescription drugs from medical sources into the illegal market or the use of prescription drugs for illegal or nonmedical purposes. drug diversion may be accomplished by forging or altering prescriptions, by obtaining prescriptions under false pretenses, or by colluding with a willing prescriber. for example, a pennsylvania
physician and one of his patients pleaded guilty to drug diversion. the physician wrote prescriptions for the patient, medicare paid for them, but they were delivered to two different persons on separate occasions. providers who suspect beneficiary fraud should report it to their sma. drug diversion can involve health
care professionals as well as beneficiaries. fraud occurs when a physician is paid to write prescriptions without regard to medical necessity. in this case, a michigan pharmacist who owned several pharmacies involved physicians in a scheme that included drug diversion to beneficiaries.
in a scheme lasting from 2006 through 2011, the pharmacist paid physicians kickbacks to write prescriptions for the pharmacies' customers without regard to medical necessity. the physicians wrote prescriptions for controlled substances and for expensive non-controlled medicines. the prescriptions for controlled
substances were filled and used as kickbacks to the beneficiaries and to patient recruiters. the prescriptions for expensive non-controlled substances were never filled, but were billed by the pharmacies to medicare and medicaid using the beneficiaries' information. the expensive non-controlled
medications were then returned to wholesalers. in august 2012, the pharmacist and five associates were found guilty of health care fraud and other offenses. two of the physicians pleaded guilty. in february 2013, the pharmacist was sentenced to 17 years in prison. by being aware of beneficiary fraud and provider schemes, health care
professionals are better equipped to recognize and report them. health care professionals who suspect beneficiary fraud should report it to their sma. there are a variety of federal and state laws, both civil and criminal, used to deter and punish fraud in medicaid. major federal laws include the:
health care fraud statute; false claims act; anti-kickback statute; patient access and medicare protection act exclusion provisions of the social security act; and civil monetary penalties law. many states have similar state laws. for example, a number of states, including california, new york, and texas, have state false claims acts
that punish false claims made to state medicaid programs. these three states also have anti-kickback statutes. health care professionals who engage in fraud or abuse in violation of these laws can be subject to serious consequences including administrative, civil, and criminal penalties. the patient access
and medicare protection act added stricter penalties for stealing or misappropriating medical identities to the anti-kickback provisions of the social security law. these penalties range from monetary fines and damages to prison time and exclusion from federal health care by becoming familiar with these laws, health care professionals will be in a
better position to avoid violations and to identify and report others who are in violation. the federal laws, with the exception of the health care fraud statute, are discussed in the medicare context in a self-study booklet titled "a roadmap for new physicians: avoiding medicare and medicaid fraud and abuse," on the hhs-oig website.
the federal health care fraud statute (18 u.s.c. ⧠1347) makes it a criminal offense to knowingly and willfully execute a scheme to defraud a health care benefit program. health care fraud is punishable by up to 10 years in prison. it is also subject to criminal fines of up to $250,000. specific intent to violate
this section is not required for conviction. another important federal law against health care fraud is the false claims act. the false claims act, or fca, creates civil liability for knowingly presenting a false or fraudulent claim to the government for payment. "knowingly" includes not only actual
knowledge but also deliberate ignorance or reckless disregard for the truth or falsity of the information. no proof of specific intent to defraud the government is required. some examples of potential fca violations in the health care fraud context include upcoding, billing for unnecessary services, billing for
items or services not provided, and billing for services performed by an excluded individual. individuals and entities that make false claims are subject to civil penalties of up to $11,000 for each false claim, plus three times the amount of damages the government sustains by reason of each claim. violation of the fca
may lead to exclusion from federal health care programs. civil legal actions for penalties and damages under the fca may be brought not only by the government but by private persons as well, such as competitors or employees of a provider, on behalf of the government. if the legal action is successful, the private person is entitled to
a percentage of the recovery. the fca protects all persons from retaliation for reporting false claims or bringing legal actions to recover money paid on false claims. false claims liability can come when a provider fails to return payments received on false claims. these payments are called overpayments. under section 1128j(d)
of the social security act, persons who have received an overpayment from a federal health care program must report and return the overpayment within 60 days of the date the overpayment was identified. failure to do so may make the overpayment a false claim. false claims made knowingly may be subject to criminal prosecution. persons who
knowingly make a false claim may be subject to criminal fines up to 250,000 and up to 5 years in prison. remember that a number of states have their own false claims acts with both civil and criminal provisions against making false claims to state medicaid programs. as previously noted, the anti-kickback statute, found at section 1128b(b) of the
social security act, prohibits rewarding new business with referral fees. more specifically, the act prohibits the knowing and willful offer, payment, solicitation, or receipt of any remuneration, in cash or in kind, to induce or in return for referral of individuals for the furnishing or arranging of any item or service for which payment may be made
under a federal health care program. remuneration means anything of value and can include gifts, under-market rent, or payments that are above fair market value for the services provided. kickbacks are felonies punishable criminally by up to 5 years in prison and a fine of up to $25,000. kickbacks can also be criminally
prosecuted under other statutes. for example, compliance with the anti- kickback statute is a condition of payment in the federal health care programs. therefore claims for items or services resulting from kickbacks are not payable and may constitute false or fraudulent claims under the fca. even if they are not prosecuted
under criminal laws for kickback violations, providers may be subject to civil consequences imposed under other laws. for example, under the civil monetary penalties law, found at section 1128a(a)(7) of the social security act, hhs-oig may impose civil penalties of up to $50,000 per kickback violation plus three times
the amount of the remuneration. similarly, violation of the anti- kickback statute may also lead to hhs-oig excluding the provider from federal health care programs. the anti-kickback statute provides safe harbors for certain arrangements such as personal services and rental agreements,
investments in ambulatory surgery centers, and payments to bona fide employees. providers with questions about the anti-kickback statute and these safe harbor arrangements should consult the regulations and guidance documents available from hhs-oig. as was the case with the false claims statute, remember that a
number of states have their own laws relating to kickbacks in medicaid programs. providers should also consult laws in the states where they practice to find out other provisions that may apply. at the end of 2015, president obama signed into law the patient access and medicare protection act. this added additional language to
the anti-kickback statute. section 8 of the patient access and medicare protection law adds a subparagraph to the anti-kickback statute mentioned in the previous slides. this act has several adjustments to the overall medicare and medicaid programs, but the most significant in regard to fraud is
the implementation of stiffer penalties for those who illegally buy, sell, and distribute medicare and medicaid numbers and other health information identifiers (such as national provider identifiers). the new law does not distinguish how those misappropriated identifiers might be used; its primary
concern is such things as card sharing and identity theft. individuals found guilty of misappropriating the medical identifiers of health care providers or beneficiaries face up to 10 years in prison and a $500,000 fine. corporations that engage in such a practice can be fined up to
$1,000,000. being found guilty of taking or receiving kickbacks and other forms of fraud against federal health programs can result in more than just financial and prison penalties. it can also lead to being excluded from state and federal health care programs. under section 1128 of the social security act, hhs-oig has authority
to exclude individuals and entities from participating in federal health care programs for various reasons. exclusions can be mandatory, meaning hhs-oig has no choice about whether to exclude, or discretionary which means hhs-oig does have a choice. exclusion is mandatory for convictions of program-related
crimes, convictions relating to patient abuse, felony convictions relating to health care fraud, and felony convictions relating to controlled substances. exclusion is discretionary for loss of license due to professional competence or financial integrity concerns, convictions relating to fraud, convictions relating to obstruction of
an investigation or audit, misdemeanor convictions relating to controlled substances, and participation in prohibited conduct such as kickbacks and false statements. federal health care programs should not be billed for items or services furnished, ordered, or prescribed by an excluded individual or entity. if
someone on a physician's staff has been excluded from participation in a federal health care program, the practice should not bill any federal health care program for any items or services furnished, ordered, or prescribed by the excluded individual. "furnished" is a key word that refers to items or services
provided or supplied, directly or indirectly, by an excluded individual or entity. while a health care professional who provides services through medicaid may employ an excluded individual who does not provide any items or services paid for, directly or indirectly, by federal health care programs, practitioners should
exercise caution here. a health care professional who contracts with or employs "a person that the provider knows or should know is excluded by the oig… may be subject to civil monetary penalty liability if the excluded person provides services payable, directly or indirectly, by a federal health care program." the
prohibition is not limited to items or services involving direct patient care, but extends for example to filling prescriptions, providing transportation services, and performing administrative and management services not separately billable. it is in the best interest of health care professionals to screen potential
employees and contractors prior to employment or contracting to ensure they are not excluded from participating in federal health care programs. additionally, cms advises providers to check the exclusions database monthly to ensure none of the practice's employees or contractors have been excluded. the
guidance further advises states to require all providers to immediately report any exclusion information discovered. the list of excluded individuals/entities (leie) database is available on the hhs-oig website and is listed in the "health care fraud and program integrity" resource handout provided with this
presentation. both licensed and unlicensed individuals can be excluded, so it is best to check for both. in addition to checking the leie, providers should check the exclusions extract on the system for award management website. hhs-oig has authority under the civil monetary penalties law to
impose civil monetary penalties not only for exclusion violations but also for other misconduct. as previously noted, the civil monetary penalties law, section 1128a of the social security act, authorizes hhs-oig to impose civil penalties for violations of the anti- kickback statute and the exclusion
provisions. the law also authorizes imposition of civil penalties for a range of other violations. these violations include: false claims; violating medicare assignment provisions or the physician agreement; providing false or misleading information expected to influence a decision to discharge a patient
from the hospital; failing to provide an adequate medical screening examination for patients who present to a hospital emergency department with an emergency condition or in labor; and making false statements on applications or contracts to participate in a federal health care program. true or false?
federal laws against health care fraud include: the health care fraud statute; the false claims act; the anti-kickback statute. correct answer: true. also, remember that many states have laws against false claims and kickbacks. health care professionals can play
an important role in preventing fraud, waste, and abuse. effective steps to prevent fraud, waste, and abuse include the following: knowing the regulations and laws governing the services offered by the practice; screening potential and existing employees and contractors for exclusions; staying aware of current fraud
schemes and educating employees; and implementing a compliance program. in addition to taking the preventive steps mentioned previously, health care professionals may also benefit from adopting a compliance program. hhs-oig has suggested that the seven basic elements of a compliance program for individual and small group physician
practices are: 1.implementing written policies, procedures and standards of conduct; 2.designating a compliance officer or contact(s) to monitor compliance and board/senior management level oversight of the compliance program; 3.conducting training and education on standards and procedures;
4.developing open lines of communication; 5.enforcing disciplinary standards through well-publicized guidelines; 6.conducting internal monitoring and auditing; and 7.responding appropriately to detected violations. as part of internal monitoring and auditing, providers should perform regular reviews of operations
and procedures to: assess performance; confirm compliance with standards; and improve the process and protect against fraud, waste, and abuse. plans should use reviews to identify problem areas at the first-tier, downstream, and related entities that could include: analyzing data to identify unusual trends, including changes in:
drug utilization; medical utilization; enrollment patterns; and drug purchasing to prescription drug event billing patterns; referral or prescribing patterns; and identifying items or services overutilized. implementation of a compliance program is voluntary for various providers and suppliers, but the affordable care act, requires the secretary of
health and human services to establish, as a condition of enrollment in medicare and medicaid, a compliance program or suppliers within a particular industry or category. a recent final rule for medicaid managed care has identified elements of a compliance program that expanded on hhs-oig recommendations. changes include establishing a board
committee for oversight of the compliance program; mandatory reporting to the state of potential fraud, waste, or abuse; and changes in provider circumstances that may affect participation. steps that health care professionals may take to prevent fraud, waste, and abuse include: implementing written standards
and procedures; conducting training and education on standards and procedures; developing open lines of communication; and conducting internal monitoring and auditing. correct answer: true. these are four of the seven recommended elements of a compliance program. having a compliance program can help
health care professionals protect their practices against fraud, waste, and abuse. using the laws discussed earlier, the government is taking enforcement action to combat health care fraud. in fy 2015, the combined health care fraud enforcement efforts of the doj and hhs recovered $1.6 billion in taxpayer dollars for the medicare
trust fund and another $800 million to the treasury and private individuals affected by fraud. a total of 613 defendants were convicted of health care fraud related crimes, and federal prosecutors charged 888 defendants in 463 separate cases with health care fraud related crimes, which was also
a record. in addition, of the more than 4,100 individuals and entities hhs-oig excluded in fy 2015, more than 1,300 were excluded because of medicare- or medicaid- related criminal convictions. a number of these recoveries and charges were a result of joint efforts between the doj and hhs.
the health care fraud prevention and enforcement action team (heat), a multi-agency team of federal, state, and local investigators dedicated to combat medicare and medicaid fraud, is responsible for many of these enforcement actions. the mission of heat is to gather resources across the government to
help prevent fraud, waste, and abuse in the medicare and medicaid programs and crack down on perpetrators of fraud. among other things, heat has resulted in the expansion of the medicare fraud strike force to nine cities. in june 2015, heat, its strike force teams, and other state and local
agencies charged 243 individuals with a collective $712 million in false billing in its largest nationwide sweep ever. since march 2007, strike force units have charged more than 2,300 defendants with more than $7 billion in false medicare claims. smas are responsible for overseeing efforts to contain medicaid fraud, waste, and abuse
on a day-to-day basis in their respective states and have been increasingly active in this regard. the hhs-oig medicaid fraud control units statistical data sheet for fy 2015 showed 1,553 criminal convictions and 795 civil settlements and judgments against providers. the smas recovered more than $744 million for the medicaid program
in fiscal year 2015. investigations that lead to recoveries or criminal prosecutions for fraud or abuse often start with identification of improper payments. there are a number of ways federal and state governments can identify improper medicaid payments, including: cms' payment error rate measurement program, which measures and reports improper
payments in medicaid and identifies common errors; audit medicaid integrity contractors, which contract with cms to perform audits and identify overpayments; and medicaid recovery audit contractors, which contract with states to audit providers and identify overpayments. the federal government, through cms' center for program integrity
(cpi), undertakes or oversees other significant anti-fraud efforts. cms' cpi engages in or oversees these efforts include tracking medical identity theft, offering a remediation process for the victims of medical identity theft, using predictive modeling to identify suspect claims before payment, screening providers
at enrollment, suspending payments upon a finding of a credible allegation of fraud, and terminating providers from federal health care programs for cause. medicaid rules require screening providers before enrollment. this screening searches for certain information depending on an
assigned categorical risk of fraud. all providers are screened to ensure current licensure and to determine whether they have been excluded from federal health care programs or have been terminated from such programs for cause. providers may fall into a high-risk category because of provider type or adverse actions
such as previous exclusions, terminations, or payment suspensions. these providers may be subject to additional screening, including a criminal background check and fingerprinting. in its fy 2015 annual report, hhs identified state difficulties in implementing risk-based screening on new providers as a main cause of
the increase in the improper payment rate. the objective is to prevent fraud on the front end rather than paying claims and then chasing providers to recover lost funds. federal regulations that became effective in february 2011 require states to suspend medicaid payments to providers whenever
they determine that a credible allegation of fraud exists and there is a pending investigation. a credible allegation is one "which has been verified by the state," has indicia of reliability, and has been reviewed carefully in light of all the evidence on a case-by-case basis. as a practical matter, an sma's referral of the allegation
to the medicaid fraud control unit (mfcu) after such verification and review amounts to a determination that a credible allegation of fraud exists. until recently, state actions to terminate providers from medicaid only applied to the state that took the action. the affordable care act added a provision to the social
security act that requires an sma to terminate the participation of any provider (individual or entity) that has been terminated by medicare or another state medicaid program. through rulemaking, cms defined termination to only apply to those providers who are terminated for cause—for reasons of fraud,
integrity, or quality—and expanded the requirements to include chip. therefore, if a provider is terminated for cause by a state's medicaid program or chip, or by medicare, other states must also terminate the provider from their medicaid and chip programs. if a provider needs to know whether another provider
has been terminated from participation, the provider should contact the sma for that information. health care professionals interested in learning more about new means of fighting fraud, waste, and abuse under the affordable care act may refer to fraud prevention documents on to the cms website. select the appropriate answer to the
following question. anti-fraud measures taken by the government include: a. tracking medical identity theft and screening providers at enrollment b. tracking medical identity theft and suspending payments upon a credible allegation of fraud c. screening providers at enrollment and
issuing medicaid identification cards that show any violations d. both a and b. d. tracking medical identity, screening providers at enrollment, and suspending payments upon a credible allegation of fraud are all measures that cms' cpi uses or administers.
detection of fraud, waste, and abuse does not lie solely in the hands of the federal and state governments. health care providers also play an important role and share a goal with smas: providing quality medical care appropriately documented and billed. if a provider learns something that indicates another provider may be
engaging in suspect practices with regard to the medicaid program, several options are available for reporting. health care professionals should report suspect provider practices to their sma or their mfcu; contact information for smas and mfcus is on the cms website. this website address appears in the "health care fraud and
program integrity" resource handout provided with this presentation. hhs-oig; 1-800-hhs-tips or the website shown here. hhs-oig advises that "just because your competitor is doing something doesn't mean you can or should." report it instead. you can report fraud anonymously, but it is helpful to provide your phone number or email address, allowing
investigators to contact you for more information, if needed. if you do give your contact information, your identity will be protected to the maximum extent provided by law. when reporting suspected fraud, waste, and abuse, the provider should include: the contact information for the source of the information, suspects, and witnesses; the details of the alleged
fraud, waste, and abuse; identification of the specific rules allegedly violated; and the suspect's history of compliance, education, training, and communication with your organization or other entities. a provider that suspects a beneficiary fraud issue, such as card sharing or eligibility fraud, should report the issue to their sma.
a health care professional can report suspected medicaid fraud, waste, or abuse to: their sma; their mfcu; or hhs-oig. true. health care professionals may report suspected fraud or abuse to any of these agencies. health care professionals should also report suspected fraud or abuse to local
law enforcement. health care providers should report beneficiary fraud as part of enforcing disciplinary standards and responding appropriately to detected violations, providers may use a variety of corrective measures, including the following: sending education or warning letters to providers or giving warnings to employees; suspending certain activities
of a contractor, suspending an employee, or terminating an employee or contractor; providing educational materials; conducting mandated training; revising policies or procedures, including monitoring and auditing procedures; and adopting new prepayment edits or document review requirements. some of these actions would be
more appropriate for cases of waste or abuse than fraud. health care professionals play an important role in preserving the solvency of the medicaid program, protecting beneficiaries from harm, and preventing fraud, waste, and abuse. by understanding common forms of fraud, waste, and abuse,
these professionals will be better equipped to recognize, report, and prevent them. by following the applicable rules, reporting suspected fraud, waste, and abuse, and taking reasonable preventive measures, health care professionals protect their practices, protect beneficiaries from harm, and help preserve the solvency of the
medicaid program. in these ways, health care professionals make a valuable contribution to the fight against fraud, waste, and abuse. this presentation was current at the time it was published or uploaded onto the web. medicaid and medicare policies change frequently so links to the source documents have been
provided within the document for your reference. this presentation was prepared as a service to the public and is not intended to grant rights or impose obligations. this presentation may contain references or links to statutes, regulations, or other policy materials. the information provided is only intended to be a general
summary. use of this material is voluntary. inclusion of a link does not constitute cms endorsement of the material. we encourage readers to review the specific statutes, regulations, and other interpretive materials for a full and accurate statement of their contents.
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