Medicare Zone Program Integrity Contractors - Focusing on Fraud & Abuse

The vast majority of healthcare providers wholly and unequivocally back aggressive efforts to stop Medicare fraud & abuse.  Unfortunately, many providers face extraordinary day-to-day challenges in identifying, understanding and maintaining current reimbursement and medical documentation guidance from CMS.  Medicare coverage criteria has become so dynamic - frequently being updated on a daily basis - that providers simply don't have the resources and budget required to insure 100% CMS compliance.

The Centers for Medicare and Medicaid Services (CMS) and the Obama administration have launched targeted and wide reaching efforts to identify and stop Medicare fraud.  With the Medicare program facing imminent insolvency and CMS driving hard to push providers toward evidence-based coverage policies and revamped clinical practices, providers are facing law enforcement efforts on an unprecedented scale.

So, what's the real story with Medicare fraud & abuse - fake HIV clinics, the buying and selling of Medicare numbers or bogus HME claims?  No, these are the bizarre headlines associated with crooks - not the real issues facing the nation's healthcare providers today.  The real issues (approx. $40 - $60 billion in estimated, annual overpayments) are centered around perceived provider abuse and the CMS mandate to protect Medicare's viability and enforce payment rules, regulations and guidelines.
 
Clearly, the dynamic nature of the CMS regulatory environment is no excuse for submitting non-compliant claims, but it is a reality.  All providers would agree that submitting claims to Medicare and Medicaid without meeting CMS payment criteria is both bad business and bad medicine.  In addition, being accused of fraud or abuse instantly destroys careers, organizations, families and the taxpayer's underlying trust in the system - there simply are no winners.

Medicare Fraud & Abuse - Recent DOJ and OIG Cases

As mentioned earlier, issues such as fabricated HIV clinics grab the headlines, but don't necessarily have day-to-day implications on honest providers.  However, over the past 2 years several cases have been investigated by both the Department of Justice (DOJ) and the Office of the Inspector General (OIG) that can have very real consequences on providers throughout the U.S..

Jackson Davis HealthCare has searched the DOJ and OIG archives and we have included several cases below that deserve further review and consideration.  For the most part, these cases revolve around both whistleblower actions and adherence to Medicare coverage criteria:

        One Day Stays / 3-Day SNF Acute Stays / Inpatient Only List - Carotid Arteries
        Inflating Patient Charges to Receive Enhanced Outlier Payments
        Inflating Patient Charges to Receive Enhanced Outlier Payments (11/18/09)
        Medical Directorship Contracts & Lease Agreements (10/30/09)
        Inpatient Rehabilitation Facilities - Interrupted Stays
        Cost Report Issues - Reimbursable v. Non-Reimbursable Costs
        Falsified Billing and Medical Records
        Infusion Therapy & Chemotherapy Billed Units
        Physician Clinic Referrals / Medicare Cost Reports - Stark and Anti-Kickback
        Teaching Physicians and Billing for Residents - Orthopedic
        Inpatient Only List - Kyphoplasty
        Professional Fee Billing - CRNA Services
        
Medicare Integrity Program (MIP)

In addition to laying the foundation for the Medicare recovery audit (RAC audits) program, recent adoption of the Medicare Integrity Program has continued to broaden the benefits integrity scope and impact of law enforcement. 

CMS Definition - Medicare Fraud

CMS defines Fraud is an intentional representation that an individual knows to be false or does not believe to be true and makes, knowing that the representation could result in some unauthorized benefit to himself/herself or some other person.  The most frequent kind of fraud arises from a false statement or representation that is material to entitlement or payment under the Medicare program.  The violator may be a practitioner, physician supplier, contractor employee or beneficiary.
 
Recent developments in whistleblower suits filed in conjunction with the Department of Justice and Office of the Inspector General provide little doubt about the government's absolute intent to crack down on perceived fraud.  Examples of fraud include, but are not limited to the following:

• Billing for services or supplies that weren't provided
• Altering claims to obtain higher payments
• Soliciting, offering or receiving a kickback, bribe or rebate (example: Paying for referral of clients)
• Provider completing Certificates of Medical Necessity (CME) for patients not known to the provider
• Suppliers completing CMEs for the physician
• Using another person's Medicare card to obtain medical care

CMS Definition - Medicare Abuse

CMS defines Abuse as behaviors or practices of providers, physicians, or suppliers of services and equipment that, although normally not considered fraudulent, are inconsistent with accepted sound medical, business, or fiscal practices.  The practices may, directly or indirectly, result in unnecessary costs to the program, improper payment, or payment for services that fail to meet professionally recognized standards of care, or which are medically unnecessary.
 
The majority of provider "errors" fall within the CMS definition of Abuse.  As such, significant financial penalties and additional potential exposure to fraud claims may follow CMS actions in these matters.  Examples of abuse include, but are not limited to the following:

• Excessive charges for services or supplies
• Claims for services that don't meet CMS medical necessity criteria 
• Breach of the Medicare participation or assignment agreements
• Improper billing or coding practices

Penalties for Medicare Fraud & Abuse

Medicare fraud and abuse cases are routinely referred to the Office of Inspector General (OIG). The OIG has the authority to use civil monetary penalty, criminal penalty, or administrative sanctions in connection with these cases.  Civil monetary policies may be imposed in the following cases, but may also be applied to other cases:

• An item or service is not provided as claimed
• An item or service claimed is false or fraudulent
• The Medicare assignment provisions are violated
• An item or service is provided by an excluded person

Criminal penalties may be imposed in the following cases, but may also be applied to other cases:

• Soliciting, offering or receiving a kickback, bribe or rebate
• Knowingly and willingly making or causing to be made any false statement or misrepresentation in applying for a Medicare benefit or payment

Administrative sanctions may be used:

• Against an abusive practitioner/provider/supplier
• Against a practitioner/provider/supplier who consistently fails to comply with Medicare regulations