Program Integrity Fraud, Waste & Abuse

Program IntegrityFraud, Waste & Abuse Sandhills Center LME

NC Medicaid • Based on its budget, Medicaid is one of the largest health care companies in NC. • Serves 1.5 million people annual; expected to increase by 500,000 – 700,000 by 2014. • Must have a system in place to prevent improper payments and reduce fraud & abuse.

Definitions • Fraud: Deception or misrepresentation made by a health care provider with the knowledge that the deception could result in some unauthorized benefit to him or herself or other person. Includes any act that constitutes fraud under 42 CFR 455, the federal laws governing Program Integrity for Medicaid.

Definitions • Waste: The over utilization of services, or other practices that result in unnecessary costs generally not considered caused by criminal negligent actions but rather the misuse of resources.

Definitions • Abuse: Provider practices that are inconsistent with sound fiscal, business or clinical practices and result in an unnecessary cost to the Medicaid program, or in reimbursement for services that are not medically necessary or fail to meet recognized standards for health care or clinical policy.

Fraud & Abuse Laws • False Claims Act: Knowingly submits, or causes another person or entity to submit, false claims for payment of government funds • Filing false claims may result in fines of up to 3 times the programs’ loss plus $11,000 per claim filed.

Fraud & Abuse Laws • Anti-Kickback Statute: A criminal law that prohibits the knowing and willful payment of remuneration to induce or reward patient referrals or the generation of any business involving any item or service payable by any federal healthcare program.

Fraud & Abuse Laws • Self-Referral Law, commonly known as the Stark Law: Pertains to physician referrals under Medicare and Medicaid. This law prohibits physicians from referring patients to receive services from entities with which the physician or an immediate family member has a financial relationship.

Fraud & Abuse Laws • False Claims Act Whistleblower Employee Protection Act: This law was enacted to protect employees from being discharged, demoted, suspended, threatened, harassed or discriminated against because the employee testifies or assists with an investigation of the employer.

Fraud & Abuse Laws • Exclusion Statute: This law explains that the Office of Inspector General (OIG) is legally required to exclude individuals/entities from participation in all federal health care programs if convicted of certain offenses.

Fraud & Abuse Laws • Civil Monetary Penalties Law: This law allows the OIG to seek civil monetary penalties and assessments based on the type of violation. Penalties range from $10,000 to $50,000 per violation.

Mission of Program Integrity • Ensure compliance, efficiency and accountability with the NC Medicaid Program by detecting and preventing fraud, waste and program abuse; and • Detect improper payments of Medicaid dollars through cost avoidance activities, recoupments and ongoing education of providers and members.

Program Integrity Objective • To eliminate fraud, waste and abuse within the Sandhills Center Provider Network by implementing a proactive data driven process to identify and address potential discrepancies and red flags.

Interventions & Strategies • Provide education, training and/or guidance for both Medicaid members and providers of Medicaid services; • Support efforts of providers who identify and resolve issues themselves; • Hold provider agencies accountable when no systems are in place to guard against fraud, waste and abuse;

Interventions & Strategies Cont’d • Support use of tools such as payment suspension, post payment reviews, audits, and sanctions; and • Encourage and maintain open lines of communication between the program and the public on the effectiveness of PI activities, which include recoupment and cost reduction.

Interventions & Strategies Cont’d • Monitor providers regularly to determine compliance • Take corrective action if failure to comply • Implement mechanisms to detect under and over utilization of services • Implement mechanisms to assess quality and appropriateness of care • Ensure providers are credentialed.

Expected Benefits • Enhance Provider Education; • The shift to a more proactive/preventive model; • Improved guidance on reimbursement policies & provider enrollment requirements; and • Improved detection

Examples of Medicaid Fraud • Billing for “phantom patients” who really did not receive services; • Billing for medical services or goods that were not actually provided; • Billing for more services than could be provided in 24 hours in a day; • Paying a kickback in exchange for a referral for services or goods;

Examples of Medicaid Fraud • Concealing ownership in a related company; • Using false credentials for staff; • Providing services by untrained staff; • Billing for unnecessary tests; and/or • Overcharging for health care services or goods that were provided.

Session Law 2011-399 • Also known as Senate Bill 496 • Modified the General Statutes by adding a new chapter, 108C titled “Medicaid and Health Choice Provider Requirements.” • Applies to providers enrolled in Medicaid or Health Choice • Includes the following provisions: • Provider Screening which assigns a risk level to providers of limited, moderate or high.

Session Law 2011-399 • Criminal History Record Checks • Payment Suspension and Audits (includes voluntary self-audits) • Prepayment Claims Review • Threshold recovery amount ($150) • Provider Enrollment Criteria • Provider Cooperation with Investigations & Audits • Appeals by Medicaid Providers & Applicants

Provider Self-Audit Process • Process has been in place since 1999; now being expanded to incorporate new activities based on Session Law 2011-399. • In accordance with NC Session Law 2011-399, “low” or “moderate” risk providers do have the opportunity to conduct self-audits as a method of contesting the outcome of a PI audit.

Suspension of Payments • In accordance with 42 CFR 455.23, payments may be suspended if/when a credible allegation of fraud is received and investigation pending. • Note: DMA is the only authorized entity that can suspend payment based on a credible allegation of Fraud/Waste/Abuse.

DMA Contract Requirements – Fraud and Abuse • Policy and Procedure Driven: • Procedure to verify services paid by Medicaid were actually delivered; • P&P that clearly articulate SHC’s commitment to comply with all standards; • Designation of a compliance officer and committee accountable to management; • Effective Training & Education; • Effective lines of communication between the compliance officer and staff;

DMA Contract Requirements – Fraud and Abuse Cont’d • Enforcement of Standards through well-publicized disciplinary guidelines; • Internal monitoring and auditing; • Prompt response to detected offenses including corrective action initiatives; • Development and maintenance of Compliance Plan; and • Notification to DMA-PI of all credible allegations of fraud or abuse.

Sandhills Center PI Efforts • Implementation of Regulatory Compliance Plan; • Designation of a Regulatory Compliance Officer; • Establishment of a Regulatory Compliance Committee • Education and Training • Monitoring Activities – internal and external

Sandhills Center PI Efforts • Development of Program Integrity Team whose responsibilities include but are not limited to: • Data mining and analysis • Determining confidence levels for data • Conducting investigations for referrals of F/W/A • Referral of cases of suspected F/W/A to appropriate oversight agencies

Identification of Potential F/W/A • Sources include: • Data Analysis Reports • Post payment Claims Reviews • Requests from SHC Internal Departments • Calls or Complaints

Activities to Detect & PreventFraud and Abuse Examples include: • Review of OIG database and National Practitioner Data Bank (NPDB) for exclusions; • Falsification of Provider Qualifications; • Authorization requests for non-covered services; • Extending the length of treatment or delays in discharging; • Duplicate entry of claims for the same member by the same provider • Pattern of large volume of complaints against a provider

References • 42 CFR 438 (Managed Care) • 42 CFR 434 (Contracts) • 42 CFR 455 & 456 (PI & Utilization Control) • False Claims Act (31 USC §3729-3733) • Anti-Kickback Statute (42 USC §1320a-7b(b) • Self-Referral Law (42 USC §1395nn) • Exclusion Statute (42 USC §1320a-7) • Civil Monetary Penalties Law (42 USC §1320a-7a)

Program Integrity Fraud, Waste & Abuse