All puns aside, the government is really turning up the HEAT on healthcare fraud. HEAT (Health Care Fraud Prevention and Enforcement Action Team) was established in May 2009 to crack down and prevent fraud, waste and abuse in a healthcare system that loses an estimated $60 to $80 billion per year to fraudsters and the “ethically challenged.”

HEAT compliments the joint DOJ-HHS Medicare Fraud Strike Force which is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud using high-tech data analytic techniques and a focus on community policing. Strike Force teams are currently in Miami, Los Angeles, Detroit, Houston, Brooklyn, Tampa and Baton Rouge.

The HEAT task force is comprised of top-level law enforcement agents, prosecutors and staff from both the Department of Justice and the Department Health and Human Services.

How is HEAT weathering the storm? By all accounts, this new task force is living up to the hype. Thirty-six people in five different states have been arrested and 94 indicted following an investigation regarding a Medicare insurance scam totaling over $250 million. Investigators apprehended nurses, doctors and other health professionals in Miami, New York, Detroit, Houston and Baton Rouge.

Attorney General Eric Holder was quoted saying, “With [these] arrests, we’re putting would-be criminals on notice: Healthcare fraud is no longer a safe bet.”

What are the fraudsters doing these days? Well, according to reports, NOT getting away with healthcare fraud thanks to the new task force. The government is in hot pursuit of those that are bilking the system.
As an investigator, here are some sure fire tips to help spot fraud in a healthcare setting:

1. Make sure you have a system in process to collect diagnosis and procedure information.
2. Track diagnosis and procedures provided, even if just by volume.
3. By simply having the right information in a single source data base, we can begin to ask the data, “Where is the hanging fruit activity?” For example, how many procedures are done in one day by one provider? How long does a patient wait to be seen? How far apart are the actual treatments?
4. Finally, tracking the different types of healthcare fraud schemes is just as valuable. A common scheme in many countries is falsifying mental and emotional states of an individual as a ruse to steal assets which lead to misrepresenting identity to receive healthcare services.

Regardless, one thing for sure is that we can always depend on the creativity of the ethically challenged.

What are the fraudsters doing these days? Well, according to reports, NOT getting away with healthcare fraud. The government is in hot pursuit of those that are bilking the system.

Some recent arrests include:

A Michigan podiatrist was accused of filing more than $800,000 in fraudulent claims. The doctor billed insurance providers for surgical procedures performed after falsely diagnosing patients with foot infections.

A New York surgeon was charged with stealing $3.5 million from insurance companies. The Department of Health & Human Services also investigated his billing patterns and found he had allegedly billed for multiple hemorrhoidectomies, office visits and examinations on the same day for the same patient on multiple occasions.

A Chicago-area cardiologist was ordered to pay $20 million and sentenced to 5 years in prison for defrauding both private and public insurers. The whistle blower on the case was another physician who worked in the same office.

Two West Virginia internists were sentenced to one year and one day of prison time after admitting to their involvement in a pill mill scheme. The local pharmacy where the prescriptions were sent by the physicians sold more hydrocodone in 2006 than all but 21 retail pharmacies in the country.

A California pathologist was sentenced to 25 years in prison for prescription fraud. He wrote fraudulent prescriptions for oxycodone in exchange for cash. In some cases the prescriptions were for minors under the age of 21.

In Miami a massage clinic owner was convicted of Medicare fraud. The owner was charged with submitting false claims for physical therapy services that were never given and occupational therapy services that Medicare does not cover.

Healthcare fraud is prevalent, but we’re finding ways to stop the bad guys.

Becker’s Hospital Review recently posted their collection of the top 10 hospital stories of 2010. Many of the topics reflect the major hospital stories of 2010 – a few really delve into the growing problems and concerns for hospitals that are not necessarily on the forefront of discussion.

Here are the top 10 terms/stories for 2010:

1. Healthcare reform
The term “Healthcare reform” was everywhere this year. People are still scratching their heads wondering exactly what that means. 2011 will be a big year along with the next 4 years to see whether healthcare reform will hold up to its hype.

2. Integrating healthcare delivery

3. RACS get rolling

With RACs in full swing, hospitals are developing ways to ensure they meet standards. In the first quarter of 2010, RACs denied a total of $2.47 million in Medicare claims, according to the AHA’s RACTrac Survey of 653 hospitals. In 2011, it will be increasingly important for hospitals to be aware of these audits.

4. For-profits buy up hospitals

5. Ban on physician-owned hospitals

6. Physician fee cuts
With Medicare fees cut by over 20%, some physicians are losing faith in the system. What will this mean for the future of Medicare and physicians and hospitals accepting Medicare? The next 2 years will be key for this.

7. Hospital quality reporting

8. The war against healthcare fraud
One of our favorite topics, the war on healthcare fraud, waste and abuse is continually growing and ever-present. While Congress realizes that there is a need to combat this abuse, we haven’t successfully implemented initiatives to thwart it substantially. The healthcare reform law provides $300 million in funding for fraud investigation and enforcement by over the next 10 years. It will be up to Congress to ensure this money is spent wisely, efficiently and effectively.

9. Big boost for healthcare IT
EHRs, EMRs, Personal Health Records – what does all this mean for Health-IT and e-health? Lots – especially with government investing, beginning in 2011 and lasting for the next six years, $34 billion in incentives for healthcare IT to hospitals and practices.

10. Don Berwick arrives at CMS

Earlier this summer, the U.S. Government Accountability Office (GAO) released a report identifying the challenges that CMS faces in implementing strategies to prevent overpayments and fraud, waste, and abuse — including focusing on pre- and post-payment claims review on the most vulnerable areas.

Our administration has set battling healthcare fraud, waste and abuse as a high priority. A recent study found $835 million in questionable Medicare payments identified by private contractors in 2007.

Some states are following suit for their Medicaid programs. The Illinois Department of Healthcare and Family Services also recently issued a report on the efficiencies and improvements in the Illinois Medicaid program that included measures to prevent Medicaid fraud and overpayments by contracting with third parties to conduct payment and recapture audits. The State of Indiana also recently issued a Request for Services to detect fraud, waste and abuse in its Medicaid program.

It is also important to stop money from going out-the-door in the first place. Preventing inappropriate payments can be easier than “recovering” inappropriate payments after the fact — as evidenced by that fact that perpetrators often “close shop” and move on when they are notified of claim disputes. The GAO calls for Medicare to improve the pre-payment review of claims. As predictive modeling technologies continue to evolve pre-payment claim review will become a critical tool to combating fraud.

The “ethically challenged” understand the amount of money in healthcare – and do not limit their prey to government sponsored programs. It is critical for private payers, plan administrators and self-funded employer plans to follow suit in both pre- and post-claim review.

A recent survey by the National Business Group on Health shows that large employers expect their healthcare expenses to increase significantly next year. It also shows that they plan to diffuse the cost increase by extending it to their employees.

Large employers are projecting a healthcare cost hike of 8.9 percent in 2011, a significant leap from the previously projected 7 percent increase for 2010. Healthcare reform was partly, although not entirely, credited with the increase.

The new regulation, which takes effect September 23rd, will affect costs in accordance with each company’s current healthcare practices. About 70 percent of the companies currently have “lifetime cap” or total dollar limits that they will have to eliminate. Around 25 percent will have to end annual limits on benefits. And 13 percent will now have to extend coverage to children suffering from expensive preexisting medical conditions to whom they had previously denied coverage. Many employers reported that they intend to cover these increases by requiring greater employee contribution.

Although the changes might be seen in different places, most employees will be affected by them. 63 percent of employers indicated that they planned to increase employee contribution to premiums. 46 percent of employers intend to increase employee out-of-pocket contributions.

Some companies also report that they plan to reduce costs through other means. Company-directed wellness programs have become more popular. Also on the rise are consumer-directed health plans, which allow employees more say in how they spend their healthcare dollars.

Employers and consultants are hinting –if not warning- that employees should be prepared to pay more for their health insurance in coming years. In fact, employers indicate that they intend to encourage employees to restrict healthcare spending in order to slow these rising costs.

If this is true for big businesses, are small businesses or the self-employed doing any better? As it turns out, no. No one, it seems, is able to dodge the increasing cost of health insurance. New legislation has raised costs to insurance companies who are ready and willing to pass those costs onto consumers via huge increases (sometimes 50%!) in premiums. Although some states are fighting back, the federal government and most states are helpless to perturb premium increases. Look for a future post about the changing healthcare costs that are being felt by those employed at small companies and the self-employed. Until then, look here for further reading.

The National Business Group on Health represents large employers’ health policy interests. The NBGH surveyed 72 companies, each with over 5,000 employees. These companies provide their own health insurance and hire a health insurer to administer the coverage.

Sources:
businessgrouphealth.org
theeconomiccollapseblog.com
ibnlive.in.com
kiplinger.com
msnbc.msn.com

While much of the focus of the public discussion surrounding healthcare reform has centered on the expansion of coverage to the uninsured, we are all aware that the reform will also have a major effect on both fully-insured and self-insured employer sponsored plans. By now, employers should know that failing to meet government mandates for coverage and affordability will result in monetary penalties.

But a seldom discussed impact of healthcare reform on employers is their increased exposure to fraud, waste and abuse. For example,

1) No lifetime or annual limits: If plans have ineligible members or dependents on their plan… now there is no limit to how much employers could be inappropriately paying for coverage of ineligible members.

2) Extension of dependent coverage: Now that employers must allow dependent coverage to continue for an adult up to age 26, plans will have an influx of new dependents… that means more potential ineligible dependents.

3) Waiting periods limited: Employers will have to provide coverage within no more than 90 days… that means employers face the risk of paying for ineligible dependents sooner.

Employers that do not regularly conduct eligibility audits, to ensure that they are not extending coverage to ineligible members and dependents, will face a significant increase in risk due to employee abuse (intentional or not) of benefit coverage. Eligibility audits are a simple way stop inappropriate healthcare expenditures. The reality is that when rules change, “the ethically challenged” will find new ways to capitalize.

For more information on the impact of healthcare reform, check out McGuireWoods Healthcare Reform Guide: Installment No. 8.

Information Security Media Group – a media company specializing entirely on information technology risk management for vertical industries, recently interviewed Medical Business Associates, Inc. President & CEO Rebecca Busch for her thoughts and commentary for a podcast “Cracking Down on Insurance Fraud.”

Rebecca highlighted the fact that a good foundation based on fraud risk assessments needs to be established to fight fraud. She also points out that insurers and providers need to regularly audit all network activity to assess risk and potential vulnerabilities where holes might be found.

Her opinion on Healthcare Reform – it might lead to an increase in insurance fraud in the short term as information systems are adjusted and new rules are implemented but should eventually decrease fraud, as more individuals will receive health coverage.

Roughly 60 billion healthcare dollars are lost each year due to fraud, waste and abuse. How does this theft affect you the taxpayer and healthcare consumer?

The answer is surprisingly simply ­ it hits your wallet first. Insurance premiums are increasing at a staggering rate ­ 33% in the last five years. If this continues, most individuals will not be able to afford any type of insurance, costing taxpayers even more because they will be the ones footing the bill for the uninsured.

Insurance premium increases hit the employer even harder. Many times employers (especially small businesses) are forced to reduce their workforce to accommodate the rising costs or even cut healthcare benefits entirely.

Prescription drugs are an area that is greatly affected by fraud. Fraudsters are fans of selling counterfeit medication. Consumers ingesting this medication (many times laced with poison ­boric acid for example) can end up in the emergency room with complications costing thousands.

The recent passage of Healthcare Reform is also proving to be good news for fraudsters. Many consumers have little to no knowledge of the bill and scammers have found multiple ways to cheat the innocent out of their money.

Fraudsters prey on the fear and confusion brought about by the bill. Going door-to-door selling fake insurance, scammers advertise an “ObamaCare” plan and insisting consumers better act fast due to a “limited enrollment” period. These scams bilk consumers out of thousands of dollars and leave them without any real insurance, so if a medical emergency where to occur, they would be left footing the bill.

So, what can the consumer do to help combat healthcare fraud? First, understand exactly what you’re being charged for and always ask for clarification on any charges for services that you do not recognize. Second, know where your medical identification is and alert proper authorities when your insurance card has been stolen ­ medical identity theft crimes can leave you sorting out medical bills for the rest of your life. Finally, be a conscientious healthcare consumer. Be aware of current fraud schemes and check out the Food & Drug Administration website to ensure your medication is not on the counterfeit list.

In honor of Patient Advocacy Week that took place April 12th – 18th the focus of this commentary will relate to patient safety and self-advocacy.

In a recent RAND report “Is Better Patient Safety Associated with Less Malpractice Activity? Evidence from California” it was found that there is a correlation between the frequency of adverse events and malpractice claims. “On average, a county that shows a decrease of 10 adverse events in a given year would also see a decrease of 3.7 malpractice claims.” What this is telling us is that there is a link between patient safety and malpractice claims. While that might not necessarily be news to some, it does put some light on the “frivolous” lawsuits. If hospitals were to concentrate on patient safety and patient education the malpractice lawsuits will (according to this report) most likely decrease.

Another article by the Wall Street Journal titled “New Focus on Averting Errors: Hospital Culture” highlights the fact that errors made by healthcare professionals cause 44,000 to 98,000 deaths per year. To combat this number hospitals are taking a surprising approach: “Not only are they trying to improve safety and reduce malpractice claims, they’re also coming up with procedures for handling – and even consoling – staffers who make inadvertent mistakes.” Hospitals are taking a proactive approach to patient safety and staffer guidance instead of waiting for a bad event to occur and then reacting.

And now just a little information regarding Personal Health Records (PHRs) and their useful for patient safety. Having a PHR can certainly save you time and help with all the cumbersome paperwork, but having one can also save your life. Patient data is lost/mixed up etc. daily and having your own record of your health will help keep you safe. The state of California has the largest PHR adoption rate. Here is a look at the numbers:
1. 7% of adults had used a Personal Health Record (PHR)
2. California leads the nation in PHR use, at 15%
3. 58% of PHR users with two or more chronic conditions say they know more about their health care as a result, compared to 44% of those with only one or no chronic conditions
4. 48% of caregivers are interested in using a PHR for the person they care for
5. 75% worry about the privacy of PHR information
6. 40% of those who do not have a PHR express interest in using one

We have discussed types of healthcare fraud (i.e. Rent-a-Patient Schemes, Pill Mill Schemes, Drop Box Schemes & Third-Party Billing Schemes) in a previous post. However we didn’t highlight some new ways scammers and fraudsters are stealing your healthcare dollars, mainly through the online world.

A recent ABC News article, “Health Care Fraud: Two Ways Scammers Are Trying to Take Your Money” describes two “ingenious” ways fraudsters are stealing your money. The article explains that because of all the healthcare hoopla occurring, people do not understand and are unaware of current policies – leaving what they call “anxious Americans.” This is how the scammers get you.

The first scam that was highlighted was “Door-to-door salesman selling bogus policies.” What does that entail? Scammers are going door-to-door selling fake insurance policies by stating that current legislation is accounting for the low “limited enrollment” period fees. They are confusing people by essentially telling them that if they don’t buy the insurance now, the price will increase excrementally and they will not be able to afford it in time.

The next scam “1-800 advertisements promoting scams” is very similar to the door-to-door scam; however, this time the fraudster are taking it to the airwaves and asking people to call and 1-800 number for “limited enrollment specials made possible by new legislation.”

As always, don’t forget about Medical Identity Theft – this practice is increasing by 375%. The key to any insurance deal is if it is too good to be true than it probably is.