Program Integrity Fraud, Waste, and Abuse Training

March 2015

Jim K. Hampton, Director

Fraud Operations & SIU

Health Care Fraud is a crime that has a

significant effect on the private and public

health care payment system. Fraud &

Abuse accounts for over 10% of annual

health care costs. Taxpayers pay higher

taxes because of fraud in public programs

such as Medicaid and Medicare.

Recognizing the serious implications of

improper payment resulting from fraud &

abuse, PerformCare’ Fraud & Abuse

Program is dedicated to detecting,

investigating and preventing all forms of

suspicious activities related to possible

health care fraud & abuse , including any

reasonable belief fraud and/or abuse will

be, is being, or has been committed.

Purpose

1

This training will provide answers to the following questions:

What is Fraud and Abuse?

What are the types of Fraud?

What are potential Fraud indicators?

What laws regulate Fraud & Abuse?

What is a Fraud & Abuse violation?

How is suspicious activity reported?

What are the Sanctions and Penalties for Fraud & Abuse violations?

What are the steps in the Fraud & Abuse Investigative Process?

What are Providers’ and Vendors’ responsibilities?

Overview

2

It is the policy of PerformCare

To review and investigate all allegations

of fraud and/or abuse, whether internal

or external;

To take corrective actions for any

supported allegations after a thorough

investigation; and

To report confirmed misconduct to the

appropriate parties and/or agencies.

Introduction

3

What is Fraud?

4

An intentional deception

or misrepresentation made

by a person with the

knowledge that the

deception could result in

some unauthorized benefit

to him/herself or some

other person. It includes

any act that constitutes

fraud under applicable

federal or state law.

Provider practices that are inconsistent

with sound fiscal, business, or medical

practices, and result in an unnecessary

cost to Health programs, or in

reimbursement for services that are not

medically necessary or fail to meet

professionally recognized standards for

health care. It also includes recipient

practices that result in unnecessary costs

to the Health program.

What is Abuse?

5

• Thoughtless or careless

expenditure, consumption,

mismanagement, use or

squandering of healthcare

resources, including incurring

costs because of

inefficient or ineffective

practices, systems or controls.

What is Waste?

6

Examples of Potential FWA

7

Falsifying Claims/Encounters • Incorrect Coding

• Inappropriate Balance Billing

• Duplicate Billing

• Billing for Services Not Rendered

• Misrepresentation of Services

• Diagnosis Does Not Correspond to Treatment Rendered

• Unbundling (billing separately for services that would ordinarily be all inclusive)

• Coding a service at a higher level than what was rendered (e.g. up coding)

Examples of Potential FWA

8

Administrative/Financial

Falsifying credentials

Fraudulent enrollment practices

Fraudulent third-party liability reporting

Offering free services in exchange for a recipient's Medical

Assistance identification number

Providing unnecessary services/overutilization

Kickbacks-accepting or making payments for referrals

Concealing ownership of related companies

The acceptance of, or failure to return, monies allowed or paid on claims known to be false or fraudulent documentation

• Billing for services not rendered

• Community and home based services are

vulnerable

• Misrepresenting of falsifying documentation

of the services

• provided

• Service does not meet the requirements

for the service code

• Forgery of recipient signatures

• Treatment plans and encounter forms

• Falsifying or misrepresenting credentials

• Credentials do not meet minimum

requirements

FWA Trends in Behavioral Health and Medicaid

9

False Claims Act (FCA)

Stark Law

Anti-Kickback Statute

HIPAA

Deficit Reduction Act

The False Claims Whistleblower

Employee Protection Act

Pertinent Laws and Regulations

10

The Federal False Claims Act (FCA), 31

U.S.C. §§ 3729-3733, creates liability for

the submission of a claim for payment

to the government that is known to be

false in whole or in part. • A “claim” is broadly defined to include any

submission that results or could result, in payment.

• Claims “submitted to the government” includes claims submitted to intermediaries such as state agencies, managed care organizations and other subcontractors under contract with the government to administer healthcare benefits.

• Liability can also be created by the improper retention of an overpayment.

• Penalties can be three times the government’s damages plus civil penalties of $5,500 to $11,000 per false claim.

False Claims Act (FCA)

11

Self-Referral (Stark Law) Statutes, Social

Security Act, 1877

Pertains to physician referrals under Medicare

and Medicaid. Referrals for the provisions of

health care services, if the referring physician

or an immediate family member, has a

financial relationship with the entity that

receives the referral, is not permitted.

Stark Law

12

42 U.S. Code It is a criminal offense to

knowingly and willfully offer, pay, solicit or receive any remuneration for any item or service that is reimbursable by any federal healthcare program. Penalties many include exclusion from federal health care programs, criminal penalties, jail and civil penalties for each violation.

Anti-Kickback Statute

13

The Anti-Kickback Law makes it a crime for

individuals or entities to knowingly and

willfully offer, pay, solicit or receive something

of value to induce or reward referrals of

business under Federal Healthcare Programs.

The Anti-Kickback Law is intended to ensure

that referrals for healthcare services are

based on medical need and not based on

financial or other types of incentives to

individuals or groups.

Anti-Kickback Statute

14

Anti-Kickback Statute Examples

15

• Money

• Discounts

• Gratuities

• Gifts

• Credits

• Commissions

In addition to criminal penalties, violation of the

Federal Anti-Kickback Statute could result in civil

monetary penalties and exclusion from Federal

Healthcare Programs, including Medicare and

Medicaid Programs.

Anti-Kickback Statute

16

The Health Insurance Portability and

Accountability Act (HIPAA), 45 CFR, Title II, 201-

250, provides clear definition for Fraud & Abuse

control programs, establishment of criminal and

civil penalties and sanctions for noncompliance.

HIPPA

17

Designed to restrain Federal spending while maintaining the commitment to the federal program beneficiaries.

Requires compliance for continued participation in the programs.

• Development of policies and education relating to false claims, whistleblower protections and procedures for detecting and preventing fraud & abuse must be implemented.

The Deficit Reduction Act (DRA), Public Law No. 109-171, 6032

18

31 U.S.C. 3730(h) - A company is prohibited from discharging, demoting, suspending, threatening, harassing or discriminating against any employee because of lawful acts done by the employee on behalf of the employer or because the employee testifies or assists in an investigation of the employer.

Whistleblower Employee Protection Act

19

The False Claims Act and some state false

claims laws permit private citizens with

knowledge of fraud against the U. S.

Government or State Government, to file suit

on behalf of the government against the

person or business that committed the fraud.

Individuals who file such suits are known as

“whistleblowers”. The Federal False Claims

Act and some State False Claims Acts prohibit

retaliation against individuals for

investigating, filing or participating in a

whistleblower action.

Whistleblower and Whistleblower Protections:

20

Federal law for increased access to healthcare

that included provisions specific to fraud and

abuse. PPACA increased penalties and

enforcement of healthcare crimes.

PPACA mandates state and federal agencies

to communicate about provider enrollment

for federally funded programs.

PPACA required Medicare and Medicaid

providers to have a compliance program.

PPACA reduced the requirements of “intent.”

PPACA stated that overpayments must be

reported and returned within 60 days.

Patient Protection and Affordable Care Act (PPACA – Healthcare Reform Act)

21

42 U.S.C. 1128B, 1320a-7b

- States that criminal penalties will result in conviction of a felony and a fine of not more than $25,000 and/or imprisonment for not more than 5 years if false statements are knowingly and willfully made for benefits or payments, or misrepresents services or fees to beneficiaries of federal health care programs.

Criminal Penalties

22

31 U.S.C. Chapter 8, 3801

– Any person who makes, presents or submits a claim that is false or fraudulent is subject to a civil penalty of not more than $5,000 for each claim and also an assessment of not more than twice the amount of the claim.

Administrative Remedies for False Claims

23

PA Code • Chapter 55 Part III. Medical Assistance Manual

http://www.pacode.com/secure/data/055/partIIItoc.html

• General Regulations

http://www.pacode.com/secure/data/055/chapter1101/ch

ap1101toc.html

• Payment Regulations

http://www.pacode.com/secure/data/055/chapter1150/ch

ap1150toc.html

• MA Bulletins

http://www.dhs.state.pa.us/publications/bulletinsearch/ind

ex.htm

State Regulations

24

PA PROMISe • PA PROMISe Provider Handbooks

http://www.dhs.state.pa.us/publications/forproviders/p

romiseproviderhandbooksandbillingguides/index.htm

• Mental Health Requirements

http://www.dhs.state.pa.us/provider/mentalhealth/inde

x.htm

• PA Recovery (for information by level of care)

http://www.parecovery.org/

State Regulations

25

PA HealthChoices • HealthChoices Behavioral Health

Publications http://www.dhs.state.pa.us/publications/healthchoic

esbehavioralhealthpublications/index.htm

State Regulations

26

• Outline of Provider

Responsibilities

• PA Code

• Provider Manuals (Roles &

Responsibilities as Participating

Providers)

• Specific FWA Provider

Responsibilities

• Medically Necessary Services

• Minimum Documentation

Requirements

• Compliance Program

• Includes self-disclosure requirements

Provider Responsibilities

27

PA Code

• Provider Responsibilities 1101

http://www.pacode.com/secure/data/055/chapter1101/s110

1.51.html

• Medically Necessary Services 1101

http://www.pacode.com/secure/data/055/chapter1101/s110

1.21a.html

• Provider Prohibited Acts 1101

http://www.pacode.com/secure/data/055/chapter1101/s110

1.75.html

Provider Responsibilities

28

Provider Manuals

• PerformCare = Section VI: Provider

Responsibilities

http://pa.performcare.org/pdf/providers/resources-

information/provider-manual.pdf

• PA PROMISe Provider Handbooks

http://www.dhs.state.pa.us/publications/forproviders/prom

iseproviderhandbooksandbillingguides/index.htm

Provider Responsibilities

29

Medically Necessary Services

§ 1101.21a. Clarification regarding the definition of ‘‘medically necessary’’— statement of policy.

A service, item, procedure or level of care that is necessary for the proper treatment or management of an illness, injury or disability is one that:

(1) Will, or is reasonably expected to, prevent the onset of an illness, condition, injury or disability.

(2) Will, or is reasonably expected to, reduce or ameliorate the physical, mental or developmental effects of an illness, condition, injury or disability.

(3) Will assist the recipient to achieve or maintain maximum functional capacity in performing daily activities, taking into account both the functional capacity of the recipient and those functional capacities that are appropriate of recipients of the same age.

Provider Responsibilities

30

Minimum Documentation Requirements

Chapter 1101.51 (e):

Providers shall keep records that “fully

disclose the nature and extent of the services

rendered to MA recipients, and that meet the criteria established in this section and additional requirements established in the provider regulations.”

– “The record shall be legible throughout”

– “Entries shall be signed and dated by the responsible

licensed provider, alterations of the record shall be

signed and dated.”

– “The record shall indicate the progress at each visit,

change in diagnosis, change in treatment, and

response to treatment.”

– “Progress notes must include the relationship of the services to the treatment plan.”

Provider Responsibilities

31

Each progress note should answer

the following questions:

– Where is the service being provided?

– Why is the client there?

– What specific intervention or service was

provided to the member?

– What was the member’s response to the

interventions?

– What is the plan for follow-up?

Provider Responsibilities

32

Seven Basic Elements of a Compliance

Program as Adopted by OIG and CMS

(Under PA HealthChoices, all MCOs and providers are required to have compliance programs)

1. Written policies and procedures

2. Compliance Officer and Compliance Committee

3. Effective training and education

4. Effective lines of communication between the Compliance

Officer, Board, Executive Management and staff (incl. an

anonymous reporting function)

5. Internal monitoring and auditing

6. Disciplinary enforcement

7. Mechanisms for responding to detected problems

Compliance Plan

33

New 8th Element

• Compliance Programs Must be Effective

– Must show that compliance plans are more

than a piece of paper

– Must be able to show an effective program

that signifies a proactive approach to the

identification of fraud, waste and abuse

– How much fraud, waste and abuse have you

identified?

– How much fraud, waste and abuse have you

prevented?

Compliance Program

34

Self-Audit and Disclosure

“DHS recommends that providers conduct periodic audits to identify instances where services reimbursed by the MA Program

are not in compliance with Program requirements.”

Benefits

Good faith disclosures and cooperation can result in the following outcomes:

– Provides evidence of a robust compliance program

– Allows for integrity agreements instead of exclusion

– Allows for lower multiplier and single damages

– Prevents suspension of future payments

– Reduces potential for investigations

Internal Monitoring and Auditing

35

DPW Self- Audit and Disclosure Process:

• Outlined specific procedures to follow on the

following webpage:

http://www.dhs.state.pa.us/learnaboutdpw/fraudandab

use/medicalassistanceproviderselfauditprotocol/S_0011

51

– DHS requires providers to return

overpayments within 60 days of identifying

overpayments

– For PA HC PSR, providers should conduct self-

audits and return overpayments to BH-MCO

(PerformCare)

– Acceptance of payment by the MA Program

does not constitute agreement as to the

amount of loss suffered

Self Audits

36

Federal

– Centers for Medicare and Medicaid Services

(CMS)

– U.S. Department of Health and Human

Services,

Office of Inspector General (OIG)

– U.S. Department of Justice (DOJ)

– Federal Bureau of Investigation (FBI)

Types of Audits

Medicaid Integrity Program (MIP)

• Medicaid Integrity Group (MIG)

• Medicaid Integrity Contractors (MIC)

Prevention, Detection & Investigation

37

State

– PA Department of State

– PA Department of Insurance (DOI)

– PA Attorney General’s Office (AG)

• Medicaid Fraud Control Unit

– PA Department of Human Services (DHS)

• Bureau of Program Integrity (BPI)

• Office of Mental Health and Substance Abuse (OMHSAS)

Types of Audits

– Bureau of Program Integrity Audits

– BH-MCO Audits (Appendix F requirements under HealthChoices)

• The Primary Contractor shall designate a Fraud and Abuse Coordinator who will be responsible for preventing, detecting, investigating, and referring suspected fraud and abuse in the HealthChoices behavioral health program to the Department

Prevention, Detection & Investigation

38

Routine Audits

– Scheduled or standard data validation audits,

and claims sampling, of contracted providers to

ensure compliance with documentation, laws,

regulations and billing requirements

Purpose

– Monitor providers for possible fraud and

abuse. Control assessments, compliance

programs, and policies and procedures will be

monitored and analyzed for inconsistencies,

risk, etc.

PerformCare SIU Audits

39

Minimum Documentation

Requirements for Payment – All encounters must have a treatment/service plan, encounter

form, and progress notes

– All must meet the Minimum Documentation Requirements to receive payment from PerformCare

Treatment Plan – 1. Must be completed according to service requirements

– 2. Treatment plan date

– 3. Diagnoses and/or symptoms addressed

– 4. Clinician’s signature, credentials, and signature date

– 5. Member or guardian’s signature and signature date

– 6. Evidence member or guardian participated with treatment plan development

– 7. Goals and objectives based on evaluation and mental health strengths and needs

– 8. Treatment objectives are based of the prescribing and are part of integrated

– program of therapies, activities, experiences, and appropriate education designed

– to meet these objectives

– 9. Treatment goals are measurable

– 10. Treatment goals have established timeframes

– 11. Treatment plan addresses less restrictive alternatives that were considered

– 12. Treatment plan is easy to read and understand

– 13. Treatment plan documents necessity for services

– 14. Treatment plan documents the utilization of services

PerformCare SIU Audits

40

Progress Note

1. Must be completed for each billable encounter

2. Name or Medical Assistance identification number

3. Date of service

4. Start and stop times of service

5. Units match the claims billing

6. Place of service (specific location for community services )

7. Reason for the session or encounter

8. Treatment goals addressed

9. Current symptoms and behaviors

10. Interventions and response to treatment

11. Next steps and progress in treatment

12. Narrative with the clinical justification to support utilization and time billed

13. Supporting documentation, when applicable

14. Clinician’s signature, credentials, and signature date

PerformCare SIU Audits

41

– No progress note

– No encounter form

– No services were rendered (no shows)

– No narrative

– Progress note was team delivered but billed as separate individual encounters by each team member

– Progress note illegible

– Services provided during the encounter were non-billable

– Inaccurate units billed

– Progress note does not provide specific location

– Progress note does not have start and stop times

– Progress note is not signed and/or dated by clinician

– Encounter form is not signed by member, parent, guardian, or agent

Audit Exceptions

42

– Rounding units

– Services were unbundled and billed

individually

– Overlapping services

– Encounter form does not include start and stop

times

– Encounter form does not include type of

service

– Encounter form not signed by clinician

– Correction to note or encounter is not initialed

and/or dated

– Services are bundled in one note (needs to be

in separate notes)

– Progress note or encounter form details

(service code, units, time) do not match

– Incorrect service code or modifier billed

Audit Exceptions

43

– No valid treatment plan for date of service

– Incomplete treatment plan for date of service

– Progress note does not state reason for the

encounter

– Progress note does not state treatment plan

goals and objectives

– Progress note does not reference symptoms

or behaviors

– Progress note does not have next steps in

treatment

– Progress note does not state intervention

– Progress note or narrative is a duplication or

almost a duplication of previous note or

– narrative

– Supporting documentation was not attached,

when required

Clinical Exceptions

44

– Activities that are not included in the service

class grid for that particular service code

– Administrative services as outpatient or any

other behavioral health services

– Transportation

– Duplicate or overlapping services

– Member grievance hearings

– Clinician does not meet requirements to provide

service

– Progress notes that do not fully describe or

misrepresent the services provided

Non-billable Activities

45

Initial identification of potential fraud through:

• Retrospective Claims reviews

• Internal Requests for Review

• Service Calls/Inquiries from Members, Vendors and/ or Providers

• Reports from Members, Providers, Clients or other sources (i.e., billing staff, etc.)

• Data Mining

• Hotline Calls

SIU Investigative Process

46

Initial review • Evaluation of complaint

• Evaluation of all supporting documentation

• Review historical data for any previous referrals with similar reasons/patterns

• Review case with all appropriate internal resources

• Decide on action o No evidence of fraud or abuse:

Findings are documented and results reported back to the referral source

o Potential fraud and/or abuse: SIU will open a case

SIU Investigative Process

47

Investigation

• Gather pertinent documents

• Run Data query for all claims in

designated time period

• Random Sample of member

claims requested

• Review documentation.

Involve other Departments as

necessary

• Case Findings and Action Plan

established

SIU Investigative Process

48

Action Plan (may include any or all)

• Pursue recovery of overpayments

• Require Corrective Action Plan (CAP)

• Review for credentialing issues

• Possible referral to State or Federal Partners

• Monitoring Program (6 or 12 months)

• Provider Education

SIU Investigative Process

49

Noncompliance with Claims

Audit (may include any or all)

• Reversal of Claims

• Prepayment Review

• Review for Dis-Enrollment and

Suspension of Referrals

• Referral to State Medicaid

Agency

• Provider and/or Member flags

for Monitoring Claims

Activities

SIU Investigative Process

50

Initial Request Letter Notification (30 Days) • List of members’ records requested

• Date records are due

• Investigator’s name and address for mailing

2nd Request Letter for Records (If Necessary, 15 Days) • 1st request letter included

• Date extension for record receipt

• Consequences for non-compliance

Findings Letter • Date for receipt of overpayment payment

• Detailed spreadsheet with overpayment issues outlined

• Corrective Action Plan and due date

• Provider Education to be done by Provider Relations

If Applicable – Payment Arrangement Letter • Arrangements for provider payment

• Signature required

Provider Correspondence

51

To eliminate FWA successfully providers must work together with PerformCare to prevent and identify inappropriate and potentially fraudulent practices. This can be accomplished by:

• Monitoring claims submitted for compliance with billing and coding guidelines;

• Adherence to Treatment Record Standards;

• Education of all staff members responsible for medical records (billing, coding, maintenance); and

• Referring cases of suspected FWA

Goal: Eliminate Improper Payment Resulting from FWA

52

53

Collaboration =

“All together, as providers, BHMCOs, OMHSAS, and BPI, we can help to reduce FWA to decrease wasteful spending in our system.”