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Health Care Fraud/Abuse & Compliance Presented by: Daniel J. Osborne, M.S.

Introduction About your speaker… Daniel J. Osborne M.S. in Criminal Justice Administration Over 20 years experience combating health care fraud Conducted & assisted in extensive health fraud investigations Assisted countless providers with audit & compliance services Approved compliance officer by many regulatory boards Previous speaker for NCMIC Speaker’s Bureau and panelist on the FCLB Fraud Committee Nationally known speaker and published author on health care fraud & compliance topics

Introduction Topics to be covered : Health Care Fraud/Abuse Laws & Rules Documentation Coding Compliance

Test your knowledge Health care fraud is the intentional deception or (material) misrepresentation that could result in an unauthorized benefit or payment; whereas, abuse is practices that are inconsistent with accepted standards that could result in unnecessary costs to a health care program. TRUE FALSE

Test your knowledge All health care providers billing third party payers are under investigation. TRUE FALSE

Test your knowledge One of the leading causes of fraud investigations is the failure of providers to deal effectively with employee and/or patient complaints. TRUE FALSE

Test your knowledge The provider’s records ( clinical and billing ) are the crime scene for investigations of health care fraud/abuse! TRUE FALSE

Test your knowledge Investigators mining for investigative targets frequently review the marketing materials of providers. TRUE FALSE

Test your knowledge Under cover agents or operatives are frequently sent into targeted health care practices to develop the evidence to support prosecutions. TRUE FALSE

Test your knowledge Insurers, regulators and law enforcers frequently work together in task forces to investigate health care fraud. TRUE FALSE

Test your knowledge Current investigative interests for health care fraud investigators include multi-discipline practices, mobile labs, unlicensed rehab, improper coding, consultants, and not following the terms of payer agreements. TRUE FALSE

Test your knowledge A critical part of a health care fraud investigation is the interview of patients to determine if they received the billed services, and who provided them. TRUE FALSE

Test your knowledge Providers should “trust but verify” all practice and coding instructions received from consultants and vendors before implementing. TRUE FALSE

Test your knowledge Administrative, civil and criminal are the three types of health care fraud prosecutions. TRUE FALSE

Test your knowledge Prosecutors must show that the provider purposefully intended to violate the law to gain a conviction for health care fraud. TRUE FALSE

Test your knowledge Non-licensed staff can be prosecuted for violations of the law, even if they were just following the providers instructions. TRUE FALSE

Test your knowledge A key for a successful health care fraud prosecution is for the prosecutor to have a “story-teller”. TRUE FALSE

Test your knowledge Mistakes caused by not knowing the laws and rules is a sound fraud defense. TRUE FALSE

Health Care Fraud/Abuse - Examples Billing for services not rendered Billing for substandard/unnecessary services Misrepresenting the nature of service provided Misrepresenting the actual service provider Misrepresenting patient diagnoses Kickbacks Unbundling / upcoding

Health Care Fraud/Abuse - Examples Billing for non-covered services Alteration of claims to obtain higher payments Duplicate submission of claims Breaches of agreements and contracts Over utilization of health care services Signing blank certificates of medical necessity Excessive referrals to one particular entity

Health Care Fraud/Abuse Causes Ignorance Seminars Manufacturers & Vendors Facilitators & Operators Bad Actors

Health Care Fraud/Abuse Types Marketing Services Documentation Coding Collections

Practice Time Bombs Inadequate documentation Improper coding practices Improper delegation Multidiscipline practices Mobile Labs Consultants Free &/or discounted services

Top Ten Reasons for Visit from the Fraud Squad Not dealing effectively w/employee & patient complaints Failing to properly code services Failure to properly document services Practice structure Improper delegation Failure to follow third-party payer rules Failure to respond to issues of medical necessity Vendors Free &/or reduced services Marketing

Investigators Guide to Evaluating Health Care Records What are the patient’s presenting complaints? Does the diagnoses match the complaints? Are the services medically necessary, related to diagnoses, and part of a documented treatment plan? Are the services recognized clinically &/or scientifically? Are the billed services supported by documentation? Were the services administered, documented and billed per all relevant laws, rules & guidelines?

Fraud Prosecution – Burden of Proof Administrative strict liability, your license Civil preponderance of evidence, your wallet Criminal beyond a reasonable doubt, fines &/or prison Which one causes you the most concern?

Test your knowledge Providers not treating Medicare patients need not be concerned about Medicare laws and rules. TRUE FALSE

Test your knowledge The “ False Claims Act of 1863 ” is the most often used law by the government to bring a case against a provider for submission of false claims to a federal health care program. TRUE FALSE

Test your knowledge “ HIPAA ” provides financial incentives for the prosecution of health care fraud. TRUE FALSE

Test your knowledge Many federal laws & statutes provide treble damage liability for providers found guilty of violations of the law. TRUE FALSE

Test your knowledge Not following the terms of your contract with a payer could result in your not getting paid, as well as your becoming the target of a fraud investigation. TRUE FALSE

Test your knowledge Federal law allows for providers to induce Medicare beneficiaries for care with free health care services. TRUE FALSE

Test your knowledge It is appropriate for the chiropractor to have their billing staff automatically append modifier -AT to CMT codes on Medicare claims to get paid. TRUE FALSE

Test your knowledge Medicare beneficiaries should sign an “ABN” on every visit and append modifier –GA to CMT codes just in case Medicare denies the claim. TRUE FALSE

Test your knowledge Medicare indicates it is sufficient for the chiropractor to just indicate the spinal area adjusted in the clinical note. TRUE FALSE

Test your knowledge It is okay for a provider to supervise and bill for the technical component of a diagnostic test that they do not know how to do. TRUE FALSE

Test your knowledge It is an acceptable practice for provider’s to forego collecting co-insurance amounts and accept what insurers pay, including Medicare, as payment in full. TRUE FALSE

Test your knowledge Medicare indicates a chiropractor in a MD-DC practice can perform and bill for their services under the MD following “incident-to” practices. TRUE FALSE

Test your knowledge Providers can bill Medicare for services rendered to immediate family and household members. TRUE FALSE

Test your knowledge Non-network providers can bill for their services rendered to network patients under the name of a network provider in the practice. TRUE FALSE

Test your knowledge The government identifies standards for appropriate provision of financial hardships for patients. TRUE FALSE

Test your knowledge It is appropriate to have differing fee structures in place, one for insured patients and another for cash patients. TRUE FALSE

Test your knowledge Mail fraud is the most common federal statute used to criminally prosecute health care fraud. TRUE FALSE

Test your knowledge The “Anti-Kickback statute” is based on the premise that referrals not based on need may cause inflated costs to federal programs, may impair physician judgment, and may cause the quality of patient care to suffer. TRUE FALSE

Test your knowledge Health care regulatory boards set reimbursement standards for health care services in their states that must be followed by payers. TRUE FALSE

Test your knowledge The most important resource for providers related to the laws and rules is their administrative practice act. TRUE FALSE

Administrative Laws Set practice standards of conduct for licensees. Identify prohibited conduct. Standards vary from state to state. Main role is to protect the public. Investigations are typically complaint driven. Strict liability. What are your practice standards?

Third-party payers Non-contract N o written agreement by the provider with the payer, where provider follows generally accepted industry standards. Contract P rovider has a written agreement with the third party payer, where the provider agrees to follow the participation rules set by the payer.

Did you know? That when a third party payer indicates they follow Medicare guides they are referring to: Service administration Supervision Documentation Coding

Medicare - Background Government program run and overseen by CMS, with investigative assistance/oversight provided by HHS. Part A & Part B Participating and Non-participating providers Deductibles and Co-pays PM&R Guidelines… time-based services Supervision standards (general, direct and personal) Modifiers ( AT, GA, GP, GY, GZ, TC… )

CMS Incident-To (MCM 2050) Locum Tenens (MCM 3060) Chiropractic (MCM 2251) 2251.1: reimbursement limited to manual manipulation of spine… 2251.2: demonstrate by x-ray/exam; document initial/subsequent visits 2251.3: necessity for treatment… acute and chronic 2251.4: location of subluxation… precise level must be specified 2251.5: treatment guidelines

Financial Hardships Is secondary to all other financial resources For patients whose gross family income is at or below 200% of current Federal Poverty Guidelines Patient requests hardship in writing Provider verifies hardship via W-2 statements, pay stubs, tax returns… File all information in the patient’s file and keep confidential

Federal Laws & Statutes - Civil False Claims Act: prohibits the knowing presentation (or causing) false or fraudulent claims to the government. Civil Monetary Penalties Law: prohibits presenting (or causing) claims that are known or should have been known… Balanced Budget Act: Provided provisions to combat health care fraud more aggressively and raised penalties. Stark Law: Prohibits physician referrals to immediate family members of designated health services. HIPAA: Expanded ability of federal government to combat health care fraud – created new statutes...

Federal Laws & Statutes - Criminal Anti-Kickback Statute: Criminal penalties for offering, payment, receipt or solicitation of any inducement… Mail & Wire Fraud: Prohibits the use (causing) of the mail , private carrier, or wire service to conduct a scheme to defraud. Conspiracy: Prohibits agreement between two or more persons to commit an unlawful act, complete one overt act… Money Laundering: Prohibits engaging in financial transaction knowing the property is proceeds from specified unlawful activity. RICO: Prohibits an enterprise to engage in ongoing pattern of racketeering that affects interstate/foreign commerce.

Federal Laws & Statutes - Criminal Acts Involving Federal Health Care Programs: false statements in applying for benefits, concealment of rights to benefits… Health Care Fraud: execution (attempt) of scheme to defraud health care program. * Theft/embezzlement in Health Care: embezzling, stealing, misapplying any of the assets of a health care program… * Obstructing: preventing, obstructing, misleading, delaying of records related to a federal health care offense to a criminal investigator. * False Statements: falsifying or concealing material fact, making false statement or using false writing in delivery/payment of health care benefits… * * Promulgated as part of HIPAA

State Laws Laws vary from state to state States have laws that may be used to prosecute health care providers for fraudulent claims. What are your state laws?

Test your knowledge If it is not documented then it did not happen. TRUE FALSE

Test your knowledge Insurers are strong proponents of computer generated notes. TRUE FALSE

Test your knowledge It is okay to prepare clinical notes only when they are requested by payers. TRUE FALSE

Test your knowledge Most regulatory boards indicate that the best way to document patient care rendered is by “ travel cards ”. TRUE FALSE

Test your knowledge A proper treatment plan consists only of reporting the frequency and duration of treatment. TRUE FALSE

Test your knowledge Chiropractors do not need to specifically document their CMT services because payers can logically assume that the chiropractor adjusted the patient. TRUE FALSE

Test your knowledge Police accident reports should be maintained in the clinical records of all patients being treated for auto accident related injuries. TRUE FALSE

Test your knowledge The use and documentation of “outcome assessments” on patients is primarily done to help explode the financial standing of the practice. TRUE FALSE

Test your knowledge Proper documentation of time-based services is limited to just reporting the minutes of the service. TRUE FALSE

Test your knowledge Multiple patient files on the same patient is a must when treating patients with multiple injury claims. TRUE FALSE

Test your knowledge S.O.A.P. noting is the most accepted method of documenting patient encounters. TRUE FALSE

Test your knowledge Clinical notes should be more extensive for patients who have insurance than those who are cash. TRUE FALSE

Test your knowledge Claims submitted for reimbursement represent not only the billed services/procedures but also that the services/procedures have been completely and accurately documented in the patient’s health care record. TRUE FALSE

Test your knowledge It is imperative that all specialty diagnostic testing reports be signed and dated by the provider to indicate that the test was read by the provider and was used in the care and treatment of the patient. TRUE FALSE

Test your knowledge Write-protection is critical when using computer noting systems. TRUE FALSE

Documentation Drives Patient Care What patient tells you What you found What you will do Supports your work/reimbursement Shows what you did, why you did it, how you did it, results of what you did, and facilitates payment.

Documentation Musts Confidentiality Records Retention Informed Consent Authorization Complete, Accurate & Timely

Test your knowledge Not knowing what the acronyms “ICD-9-CM” and “CPT-4” mean could be a strong indication of improper coding practices. TRUE FALSE

Test your knowledge Providers using CPT codes are reporting the amount of work done, the amount of judgment used, and the medical risks of patients. TRUE FALSE

Test your knowledge “ Provider ” is defined by CPT as a physician or therapist, meaning someone licensed to perform health care services and/or procedures. TRUE FALSE

Test your knowledge Deviation from CPT guides should only be made by appropriate provisions in state administrative law and with the approval of the involved payer. TRUE FALSE

Test your knowledge The higher the level of exam reported, the more work and judgment by the physician and medical risks of the patient! TRUE FALSE

Test your knowledge A new patient E&M code should be reported for patients recently released from care that re-present as the result of a new accident. TRUE FALSE

Test your knowledge It is appropriate to pick ICD-9 and CPT-4 codes based solely on what an insurer pays. TRUE FALSE

Test your knowledge ICD-9-CM codes are used by providers as a first step in establishing medical necessity when seeking third party reimbursement. TRUE FALSE

Test your knowledge CPT indicates that it is appropriate to treat more than one patient when providing one-on-one services. TRUE FALSE

Test your knowledge CPT indicates it is okay to report multiple units of the same “ supervised ” modality rendered to a patient during the same encounter. TRUE FALSE

Test your knowledge Per CPT, constant attendance modalities and therapeutic procedures can be delegated to unlicensed staff. TRUE FALSE

Test your knowledge Maintenance of ICD-9-CM codes is shared between the National Center for Health Statistics (NCHS) and the Centers for Medicare & Medicaid Services (CMS). TRUE FALSE

Test your knowledge CPT defines the standards and requirements for use of modifier –TC. TRUE FALSE

Test your knowledge As a rule, separate billings for technical and professional components the aggregate amount should equal what the global billing would have been. TRUE FALSE

Test your knowledge Basically, there are two types of CPT codes – provider must supervise, and provider must provide. TRUE FALSE

Test your knowledge HCPCS coding system, consisting of three levels, was created by Medicare in 1983 and includes CPT codes as Level I. TRUE FALSE

Test your knowledge CPT guidelines override state regulatory agencies and third-party payer requirements. TRUE FALSE

Test your knowledge Providers using CPT are instructed to pick the code that accurately describes the services/procedures performed; that are adequately documented in the patient’s medical record to support the specific codes reported. TRUE FALSE

Test your knowledge Limited licensed providers do not need to a complete CPT-4 coding manual, as most of the services in CPT do not apply to them. TRUE FALSE

Test your knowledge “ Trust but Verify” should be used at all times prior to implementing coding instructions of consultants and vendors. TRUE FALSE

CPT Q&A What are CPT codes? Who uses CPT codes? What do CPT codes mean? Are there rules for using CPT codes? What does CPT mean by “provider”? What are unlisted codes? What are separate procedure codes?

CPT Types of codes Evaluation & Management Anesthesia Surgery Radiology Pathology & Laboratory Medicine

CPT PC & TC components Modifiers … -25, -52, -59 Time-based codes Supervised Modalities (97010 – 97028) Constant Attendance Modalities (97032 – 97039) Therapeutic Procedures (97110 – 97546) Chiropractic Manipulative Treatment (98940 – 98943)

Test your knowledge Health care compliance is a system to detect and correct violations of law via a bundle of policies and procedures designed to identify legal and regulatory problems, correct identified misconduct, and create a mechanism to prevent future problems. TRUE FALSE

Test your knowledge The government recommends that ALL health care providers implement health care compliance programs to self-police themselves. TRUE FALSE

Test your knowledge Because of the false sense of security a compliance program instills, and ability of illegal conduct to continue, an “ineffective” compliance program can be worse than no program at all! TRUE FALSE

Test your knowledge Before implementing a “ formal ” compliance program the provider should consult with legal counsel. TRUE FALSE

Test your knowledge A baseline practice audit should be conducted by an independent/experienced auditor as the first step when implementing a compliance program. TRUE FALSE

Test your knowledge Compliance training is divided into two areas - general and specialty. TRUE FALSE

Test your knowledge The best person to be the compliance officer in a small practice is the office manager. TRUE FALSE

Test your knowledge “ One-size-fits-all” compliance manuals can be purchased that contain policies & procedures for use to meet requirements of written standards of a compliance program. TRUE FALSE

Test your knowledge It is okay to use a convicted health care fraud felon for coding and practice advice. TRUE FALSE

Test your knowledge Monitoring and auditing in the compliance context refer to the same activity. TRUE FALSE

Test your knowledge It is appropriate to just stop illegal conduct without taking further corrective actions. TRUE FALSE

Test your knowledge “ Everyone is doing it ” or “It is Getting Paid ” are the best ways to benchmark the appropriateness of practice activity. TRUE FALSE

Test your knowledge HHS, OIG provides compliance guidance for health care providers that are similar to those found in the FSG. TRUE FALSE

Test your knowledge All compliance program related activity should be considered “attorney-client” protected. TRUE FALSE

Test your knowledge In determining to prosecute or not, the government will determine what remedial actions were taken by the organization or individual, such as implementing an effective compliance program, improving an existing one, etc. TRUE FALSE

Benefits of Compliance Empowers practice with certainty Good for public / business relations Prevents undesirable acts/events Avoids “Qui Tam” lawsuits Facilitates early detection/correction of misconduct Effects prosecution and liability decisions Protects company from target of misconduct Opens multiple channels of communication HIPAA and other fraud / abuse legislation Health care is #1 white-collar crime priority of DOJ

What is health care compliance? It is preventative medicine for the legal & regulatory risks faced by today’s provider! It is your system to facilitate the detection & correction of violations and prevent the reoccurrence of problems!

Standards for Compliance Standards for compliance programs are found in the Federal Sentencing Guidelines (FSG), created by the United States Sentencing Commission as part of the “ Sentencing Reform Act of 1984 ” to provide uniformity and predictability in federal sentences by having culpability for an offense determined by steps taken to prevent and detect criminal conduct.

Standard One Compliance Standards & Procedures The organization must have established compliance standards and procedures to be followed by employees and other agents that are reasonably capable of reducing the prospect of criminal conduct. Access to all relevant laws, rules and guidelines Consult competent legal resources Develop compliance plan and program Develop appropriate coding processes Develop billing and auditing tools Develop record retention Develop confidentiality policy Develop conflict of interest policy Develop policy on gifts and gratuities Adhere to payor requirements Adhere to administrative practice standards Establish expectations/accountability for all Prevent inappropriate waivers of co-pays/deductibles Ensure overpayments are appropriately disclosed

Standard Two Overall Program Oversight The organization must have assigned specific high-level individual (s) of the organization overall responsibility to oversee compliance with such standards and procedures. Define scope of compliance program Delineate responsibility of compliance officer Define role of legal counsel Budget and allocate staff for compliance Collaborate with others to institute best practices Coordinate efforts to administer program Evaluate compliance program effectiveness Keep current on laws and interpretation Maintain personal credibility/integrity Recognize need for outside experts Recognize that certain activities may effect job security of compliance officer Prepare annual report on compliance activities Recognize uniqueness of organization Manage compliance education program

Standard Three Due Care Delegating Authority The organization must have used due care not to delegate substantial discretionary authority to individuals whom the organization knew, or should have known through the exercise of due diligence, had a propensity to engage in illegal conduct. Ensure conflicts interest are identified and disclosed Include compliance in all job descriptions Use compliance as element of job evaluation Conduct background checks Verify professional licensure Include OIG/GSA sanction list in credentialing Monitor OIG/GSA sanction lists for excluded Monitor relevant State sanction lists Conduct appropriate due diligence inquiries on vendors and agents Conduct compliance sensitive exit interviews

Standard Four Employee Education & Training The organization must have taken steps to communicate effectively its standards and procedures to all employees and agents, e.g., by requiring participation in training programs or by disseminating publications that explain in a practical manner what is required. Disseminate relevant guidance material and fraud alerts to all Communicate compliance information and educate staff on new compliance policies Provide appropriate and consistent compliance training for all Distill complex info into easily understood format Ensure all understand obligation to accurately document activities Ensure job descriptions are maintained, and that process in place for employees to understand job Encourage all to follow spirit & letter of law Encourage to seek guidance when in doubt Participate continuing education programs Monitor employee participation in on-going mandatory training

Standard Five Monitoring, Auditing & Reporting The organization must have taken reasonable steps to achieve compliance with its standards, e.g., by utilizing monitoring and auditing systems reasonably designed to detect criminal conduct by its employees and other agents by having in place and publicizing a reporting system whereby employees and other agents can report criminal conduct by others within the organization without fear of retribution. Evaluate contracts for conformity Protect anonymity within legal and practical limits Publicize reporting system Assess for violations of laws & rules Authorize independent investigations Conduct organizational risk assessment Conduct routine audits to monitor compliance Develop/oversee internal reporting system Identify & eliminate billing for services not rendered Ensure business relations are appropriate Ensure discounts are consistent with laws Ensure referrals are not compensated Listen to employee concerns Evaluate incentive structure Monitor for upcoding, not medical necessary Substantiate accuracy of info and reports

Standard Six Consistent Enforcement/Discipline The organization must have consistently enforced the standards through appropriate disciplinary mechanisms, including as appropriate, discipline of individuals for the failure to detect an offense. Ensure organization has well defined and publicized enforcement and discipline policies Include compliance violations into established disciplinary programs Take disciplinary action when noncompliance is substantiated Discipline proportionate to violation Flexible discipline to account for mitigating or aggravating circumstances Discipline consistent with policies and procedures Discipline consistently enforced at all levels Document recommend disciplinary action Coordinate with management functional areas to ensure appropriate discipline is taken Take appropriate actions with individuals excluded from governmental program

Standard Seven Response & Corrective Action The organization, after an offense has been detected, must have taken all reasonable steps to respond appropriately to the offense and to prevent further similar offenses – including any necessary modifications to its program to prevent and detect violations of law. Communicate noncompliance through appropriate channels Develop corrective action plans in response to noncompliance, & monitor for effectiveness Incorporate any necessary changes to reduce risks Respond to inquiries promptly, thoroughly and discretely Institute policies/procedures and education to respond to identified problems or vulnerabilities Cooperate with government inquiries / investigations Participate in payor audits Investigate matters related to noncompliance Maintain accurate/complete records on investigations Negotiate with external regulatory agencies Disclose overpayments to payers Coordinate disclosure with legal counsel Identify recipient/process for voluntary disclosure Understand applicability of attorney-client privilege

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