I begin this tome clearly stating I’m NOT an attorney nor am I deeply versed in healthcare law (I’m in the cohort of “…I know enough to be dangerous…”). However, after 30 plus years in healthcare, I do have a little perspective and experience from both the payer and clinical sides of this rabbit hole. So, I feel in good stead, minimally, to opine on F&A.
Sources put the cost of Medicare fraud between $60 and $300 billion a year. Whatever the number, it’s a lot. Fraud and, to a lesser extent, “abuse,” can be both financially and clinically dangerous. We often contemplate “fraud” as someone willfully absconding with ill-gotten gains from taxpayers (through intentionally wrongfully billing Medicare and/or Medicaid). But aside from the financial shenanigans involved, fraud can have clinically deleterious results (e.g. death – longer story for another article – maybe).
For someone who still has an actual dictionary on his desk, let’s begin with some facile definitions and level setting (from The American Heritage College Dictionary):
Fraud: n. 1. A deception deliberately practiced to secure unfair or unlawful gain.
Abuse: v. 1. To use wrongly or improperly; misue.
Abuse
Let’s first consider “abuse,” arguably the lesser of the two evils. In a general sense in healthcare, and in decidedly non-legal jargon, you made a mistake and/or billed incorrectly. No real design or reason; you simply made a mistake, received bad advice, or the new equipment vendor gave you the wrong CPT codes to bill and you simply went with it. While this is ultimately on you, as the billing provider/clinician, it wasn’t necessarily done intentionally. Whatever the case, there was no willful or wanton attempt to generate extra money or ill-gotten gains by sticking it to the “man” (e.g. Medicare). You simply made an unforced error.
I worked with a client (“X”) who’d incorrectly billed a certain diagnostic study for several years. The delta between the accurate allowable amount and what they received in reimbursement was $250 per study. E.g. Medicare reimbursed $450 for this correctly billed outpatient diagnostic study while the clinic was receiving $700 per study from inaccurately billing. This went on for three years times 8 studies per day times two locations. Turned into some real money. Was it fraud? Not necessailry. Someone just didn’t understand the nuance of the CPT codes and clinicains were simply delighted to augment their daily dose of E&M care with real-time diagnostics, so they jumped in and didn’t look back.
While I didn’t think this was fraud, I punted to qualified legal counsel to offer some input, insight, and advice. Rule of thumb: if ever in this quandary, find qualified counsel to offer attorney/client coverage and arm’s length protection – let them offer counsel and input; serve as go-between/conduit. As is the case with everything healthcare legal, do NOT hire your cousin Jim who just passed the Bar. If he doesn’t know healthcare law, he shouldn’t go anywhere near this issue.
Here’s how we remediated the situation:
We established our relationship with counsel. This offered us insight into this world from someone who lived and breathed these issues daily and across the country. Her counsel was what was needed; the client was nervous and unsure about what was going to happen.
Via counsel, and at Medicare’s behest, we:
· ran X’s patient history identifying all patients X had performed this test on by payor
· delineated the reimbursement received vs. what X should’ve received had X billed accurately (which involved multiple provider fee schedules since the reimbursement rate changed year over year)
· identified how X was going to avoid this issue in the future (e.g. accurate coding of the study, compliance follow up, etc.)
· we identified all patients, performed the math, and told Medicare what we thought was owed in a refund to the program
· via our counsel they said “….sounds good…” and asked X to stroke a check north of $600,000, and
· X then performed these activities for all other payors
· Medicare was satisfied and there were no programmatic penalties for X.
Net/net, while this was not fraud, and the owners, who were under an equal-share comp model, each took a $200k haircut in salary, X fessed up and made it right. X never heard from Medicare again. Thus, “abuse.”
Fraud
To my way of thinking “fraud” is the intentional misrepresentation of services performed knowing it’s wrong but either finding work-arounds or simply intentionally billing inaccurately. (Services/supplies that weren’t performed/provided, different CPT codes used to get a thing paid, etc.). For instance, in the early ‘90s, Medicare was on the lookout for a certain specialty that was clipping toenails of Medicare recipients, putting a little cut on a toe, then billing for minor surgery. Toe nail cutting was not reimburseable; minor surgery was. By the way, I’m impugning a specialty and this is not to suggest that this specialty, en masse, colluded to do this. However, this was something that Medicare contractors had on their radar. To be candid, I did not see those claims/data but that is my understanding. To me, kinda feels like fraud.
Next example is this recent gem listed in the Sioux City Journal. In lieu of legal ramblings here, this article alleges that a chiropractor utilized a P-Stim device that was generally attached to patients via an adhesive (non-invasive). Apparently Medicare doesn’t cover this. So the chiropractor in question billed for the surgically implanted code and, aledgedly, actually texted the sales rep asking if there was a daily limit to P-Stim deployment because he didn’t want to stand out on Medicare’s radar. I guess fraud?
Another consideration for clinicians: remember that your staff can serve as Qui Tam whilstleblowers. In other words, if they see some nefarious goings-on, they can rat you out to the government. If the government takes the case, the whistleblower can receive up to 30% of recovered monies.
With more sophisticated data analytics and AI-assisted algorithms, these data/billing “trends” (e.g. minor surgery by Provider Type 12) are easier to mine for fraud analyses. Also, while it may seem “expensive,” a sound external coding review, audit, educational system can go a long way to keeping providers from running afoul of the public, and private, payers. But those who seek to run afoul of Medicare/Medicaid do so at their own peril.