Preparing for value-based payments A Look at Fraud, Waste and Abuse: The Benefits of a Well-Developed Compliance Program

Introduction

Medicare and Medicaid fraud, waste and abuse affect every American by draining critical resources from our healthcare system, and contribute to the rising cost of healthcare for all. Taxpayer dollars lost to fraud, waste and abuse harm multiple parties, particularly some of our most vulnerable citizens. Centers for Medicare and Medicaid Services (CMS), the federal agency that administers Medicare, estimates that in 2015 some $60 billion of American taxpayer money, or more than 10 percent of Medicare’s total budget, was lost to fraud, waste, abuse and improper payments (by Avila, Marshall & Kaul 2015).

Looking at total healthcare spending, the Institute of Medicine (now known as the Health and Medicine Division) reported in 2012:

Source: Transformation of Health System Needed to Improve Care and Reduce Costs, Institute of Medicine, Sept. 6, 2012.

Fraud, waste and abuse defined

Medicare defines fraud, waste and abuse (FWA) as:

Examples of fraud include*:

• Knowingly submitting, or causing to be submitted, false claims or making misrepresentations of fact to obtain a federal healthcare payment for which no entitlement would otherwise exist
• Knowingly soliciting, receiving, offering and/or paying remuneration to induce or reward referrals for items or services reimbursed by federal healthcare programs

Examples of abuse include*:

• Billing for unnecessary medical services
• Charging excessively for services or supplies
• Misusing codes on a claim, such as upcoding or unbundling codes

*Source: Department of Health and Human Services Centers for Medicare & Medicaid Services, ICN 006827 Oct. 2016

Coding is a major target for FWA exposure. CMS is targeting all causes of improper payments, from honest mistakes to intentional deception. The most common errors in coding are insufficient documentation.

How FWA is detected

Look for patterns of behavior:

• Service volume
• Excessive testing
• False claims
• Unbundling
• Upcoding
• Excessive services
• Expensive procedures and services
• Quality of care concerns

A practice with a well-composed compliance program can:

• Increase the potential of proper submission and payment of claims
• Reduce billing mistakes
• Improve the results of reviews conducted by Medicare and Medicaid claims
• Avoid the potential for fraud, waste and abuse
• Promote patient safety and ensure delivery of high quality patient care

The following steps are important for a well-developed compliance plan for your practice:

• Follow the OIG’s Guide for Physician Groups and look into free resources from OIG, CMS and the Health Care Fraud Prevention and Enforcement Team (HEAT)
• Create simple to read policies and procedures in your compliance plans
• Review your compliance plan every year
• Engage your providers and staff to “buy into” the compliance program
• Ensure that your compliance plan is “real”
• Check to ensure that all compliance plans spell out the consequences of not following the rules

Resources

• Eye on Oversight Video Series
• CMS Medicare Learning Network (MLN) fraud and abuse awareness tools are available on MLN Products web page and the MLN Provider Compliance web page
• The Fraud Prevention Toolkit

Note: Humana (as well as other commercial plans) has adopted training content published by the Centers for Medicare & Medicaid Services (CMS) that addresses fraud, waste and abuse. Contracted healthcare providers and business partners supporting Humana’s Medicare and/or Medicaid products must use CMS content to train their employees and the entities supporting them to meet certain contractual obligations to Humana.

MGMA Consulting offers assistance with compliance policy development and assessment of your practice’s compliance program. Contact Pam at pballounelson@mgma.com for more information.