Health Care Frauds and Scams

1. Health Care Frauds and Scams

2. How Big is the Problem? • Government Accountability Office estimates 10% of all health care spending came from fraud and abuse • Centers for Medicare and Medicaid Services loses $65 billion to criminals each year

3. Agenda • Scams related to the new health care law • How to spot • How to report • Fraud related to the health care system • How to spot • How to report • New anti-fraud enforcement measures

4. Scams to Spot “Help” getting the $250 doughnut hole rebate check • New Law: • Check for people in the doughnut hole • Comes automatically • Don’t have to apply • Scam: • “I’ll help you get your check”

5. Scams to Spot • Selling “new” insurance • New Law: • Temporary insurance for those without insurance and pre-existing conditions • Coverage for young adults • Exchanges • Medicare • Scam: • Selling door-to-door, over the phone, or by email • Claiming to be government representative • Some new programs not available until 2014

6. Scam Warning Signs • “Need” new Medicare card • “Limited time offer” sales pitch • “Free information” post card

7. Scam Safety Tips • No government representative sells insurance over the phone or door to door or by email • Rely on official sources of information • Verify with whom you are dealing • Check the facts • Get it in writing • Don’t give out personal information • Check the licenses

8. Report Scams • State insurance department • State Attorney General • Local law enforcement • Medicare • Get Questions Answered • State Health Insurance Counseling and Assistance Programs • Medicare.gov • www.healthcare.gov • www.aarp.org/getthefacts, www.aarp.org/medicare

9. How Health Care Fraud Happens • “Up-coding” • Undelivered services • Paying kickbacks • Stealing identities • Mistreating patients

10. ATTORNEY GENERAL CUOMO ANNOUNCES ARRESTS IN MULTI-MILLION DOLLAR MEDICAID FRAUD SCHEME RUN OUT OF THREE NEW YORK CITY DENTAL CLINICS Defendants Allegedly Stole $5.7 Million From Medicaid Fund NEW YORK, N.Y. (June 2, 2010) The xxxx and xxxx paid recruiters, known as “flyer boys”, to bring Medicaid recipients to the clinics, and paid the recipients to get treatment, whether medically necessary or not. The Medicaid recipients were sometimes brought to the clinics from homeless shelters, and were paid cash as well as gifts such as CD players and McDonald’s gift certificates. In terms of the “flyer boys,” the more Medicaid recipients they brought in, the higher the pay. The operation employed dozens of dentists who were often required to pay two thirds of their Medicaid billings to the defendants. It is alleged that xxxx, a high-billing dentist in the clinics, actively exhorted the flyer-boys “to go out and get more patients.”

11. Office of the Nevada Attorney General • FOR IMMEDIATE RELEASE • DATE: June 2, 2010 • WORKER SENTENCED FOR MEDICAID FRAUD • …The investigation began in 2008 after information was obtained that personal care aid services were not being provided to a Medicaid recipient. Medicaid has a personal care aid program to keep people living independently in their own homes by providing basic services, including bathing, dressing, house cleaning and meal preparation. Medicaid contracts with home care companies that in turn employ individuals to provide the actual day-to-day care. The investigation developed information that xxx was not at a patient’s home for the time periods she claimed to be providing services. • District Court Judge Y sentenced xxx to 60 days in jail, suspended, 120 hours of community service, payment of $15,300.00 in restitution, penalties, and costs, plus 5 years probation.

12. TRENTON, June 1, 2010: New Jersey Attorney General Paula T. Dow and Division of Criminal Justice Director Stephen J. Taylor announced that a Hoboken pharmacist pleaded guilty today for his role in a scheme to defraud the Medicaid program. In pleading guilty, xxx, a pharmacist in charge at xxx Drugs, admitted that between Jan. 1 and Oct. 9, 2009, he submitted claims to the Medicaid program for prescription drugs allegedly dispensed to Medicaid beneficiaries, even though the prescription drugs were never dispensed. The claims were subsequently paid out by the Medicaid program. The investigation by the Medicaid Fraud Control Unit of the Office of the Insurance Fraud Prosecutor revealed that xxxx accepted fictitious prescriptions for Prevacid, Advair and Singulair from undercover Detectives as payment for narcotic prescription drugs. xxxx then billed and was paid by Medicaid for the Prevacid, Advair and Singulair even though the prescriptions were not filled or dispensed.

13. Former State Employee Charged In “Double-Dip” Scheme To Defraud Medicaid May 27, 2010 -- … According to the arrest warrant affidavit, Mr. xxxx was a full-time employee of the Connecticut Department of Developmental Services while also engaged in private practice as a licensed clinical social worker. A 2007 DSS audit disclosed that Mr. xxxx had billed the Medicaid program for professional services he claimed to have rendered during the same time that he was being paid for his work as a state employee, the warrant alleges. Between January 2006 and December 2007, Mr. xxxx collected his state salary and also submitted claims to Medicaid for private professional services totaling $166,798.99.

14. AG's Office Gets 4 Indictments for Medicaid Fraud • Sunday, May 02, 2010(ALBUQUERQUE)---New Mexico Attorney General Gary King's Medicaid Fraud and Elder Abuse (MFEA) Division succeeded in obtaining grand jury indictments on 26 felony charges against three individuals and one business in an alleged long-term Medicaid fraud scheme. • … Defendant xxx is accused of fraudulently billing the New Mexico Medicaid program for counseling services she never provided. She allegedly billed the state for 54 hours of counseling in a single day.

15. AG’s Medicaid fraud investigators recover for NC Release date: 4/28/2010 …. xxx previously worked as an officer manager for xxx, a company that provides ambulance services.   Investigators discovered that from 2006 to 2008, xxx unlawfully billed Medicare and Medicaid for more than $650,000 by submitting false claims for ambulance trips to take clients to and from dialysis treatments. Patients were usually transported to routine dialysis treatments by van, but xxx repeatedly falsified trip records and related documents to make it appear that patients needed to be taken by ambulance for medical reasons. … On March 23, a United States District Court judge sentenced xxx to 46 months in prison followed by three years of supervised release. Under a plea agreement, xxx will also pay $677,272 in restitution to Medicare and Medicaid.

16. Missouri Attorney General’s Press Release • March 23, 2010 • Koster says Joplin dentist sentenced for 13 felony counts of Medicaid fraud --must repay state $550,000-- • Xxx submitted fraudulent billings for procedures such as x-rays, root canals, and resin-based composite restorations he did not perform. • Xxx tried to conceal his false claims by creating false dental records, physically cutting off portions of dental records and taking x-rays from one patient's file and putting it in another. xxx came under investigation because a citizen reported her suspicions that he was committing fraud.

17. What You Can do to Prevent Fraud • Stay smart about your health care • Read your billing statement

18. How to Read • Your MSN

19. What You Can do to Prevent Fraud • Ask: • Are there charges for something you didn’t get? • Are there charges for services that are not medically necessary? • Were you billed for the same thing more than once?

20. What You Can do to Prevent Fraud • Contact the provider—it might be an innocent mistake • Report to authorities—it might not!

21. Tips to Avoid Fraud • Keep your personal medical information from the wrong hands • Only carry your Medicare card when you are going to a doctor’s appointment, a hospital or clinic, or pharmacy • Never sign blank insurance claim forms • Be alert to “free” medical services

22. What Will You Do? • You get an offer for a free three-day trip to Las Vegas if you go to a clinic to get a free diagnostic test. • You will: • Make an appointment • Hang up • Report the fraud

23. What Will You Do? • You get a call from a medical supply company saying that Medicare made a mistake in payment . The company wants your Social Security number and bank account information so they can transfer funds to your account. • You will: • Give your bank account number • Hang up • Report the fraud

24. Where to Report Fraud • Medicare • Call: 1-800-MEDICARE (1-800-633-4227) • Report fraud to the Inspector General • email: HHSTips@oig.hhs.gov • Call: 1-800-HHS-TIPS / (1-800-447-8477) • www.stopmedicarefraud.gov • Senior Medicare Patrol • [enter state number] • Your Insurance Company’s Fraud Division • Phone number on EOB • State Attorney General • [enter state number] • State Insurance Department • [enter state number]

25. Fraud Enforcement • HEAT - Health Care Fraud Prevention and Enforcement Action Team • Double size of Senior Medicare Patrol • More inter-agency cooperation

26. For More Information • On the new health care law • www.aarp.org/getthefacts • www.aarp.org/consigarespuestas • Visit www.healthcare.gov • Visit www.stopmedicarefraud.gov • Call 1-800-MEDICARE

27. AARP endorses Medicare fraud prevention bills: The Medicare Fraud Enforcement and Prevention Act (H.R. 5044) Sponsors: Reps. Ron Klein (D-FL) and Ileana Ros-Lehtinen (R-FL), and Sen. Kirsten Gillibrand (D-NY) What the bill does: Strengthens the penalties for Medicare fraud Makes it illegal to distribute Medicare identification numbers with the intent to defraud the program Gives law enforcement officials real-time access to Medicare claims data, allowing them to act quickly when suspicious activity is spotted. H.R. 5546, sponsored by Rep. Peter Roskam (R-IL), creates a stronger process for Medicare to review claims before paying providers.

28. Thank You!

29. PROGRAM INTEGRITYAcross CMS’ Four Lines of Business SMP Regional Conference Charleston, SC August 24, 2010 Bob Foster, CMS Atlanta INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORIZED BY LAW: This information has not been publicly disclosed and may be privileged and confidential. It is for internal government use only and must not be disseminated, distributed, or copied to persons not authorized to receive the information. Unauthorized disclosure may result in prosecution to the full extent of the law.

31. AGENDA Background Definitions Scope of the Problem Program Integrity Activities Medicare Parts A & B Fee-for-Service (FFS) Medicare Parts C & D Medicaid

32. BACKGROUND • Program Integrity refers to all CMS programs aimed at: • Reducing improper payments – from errors, mistakes or misunderstandings; and • Eliminating outright fraud

33. BACKGROUND The entire agency contributes to Medicare and Medicaid program integrity, but there is a specific funding mechanism that specifically defines the components of program integrity.

34. Medicare Parts A & B Fee-for-Service (FFS) INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORIZED BY LAW: This information has not been publicly disclosed and may be privileged and confidential. It is for internal government use only and must not be disseminated, distributed, or copied to persons not authorized to receive the information. Unauthorized disclosure may result in prosecution to the full extent of the law.

35. SCOPE OF MEDICARE FFS PROGRAM • Medicare pays over 4.4 million claims every working day to more than 1.5 million distinct providers and suppliers valued at $1.1 billion per working day totaling $431.2 billion in annual Medicare payments. • By law, CMS must pay submitted claims within 30 days of receipt. • Due to time and resource limitations, Medicare only conducts medical review on fewer than 3% of all submitted claims before they are paid. • Each month CMS receives 18,000 Part A & B provider enrollment applications and 900 DME supplier applications.

36. KEY COMPONENTS OF FFS PROGRAM INTEGRITY • Provider/Supplier Enrollment • Medical Review • Data Analysis/Benefit Integrity • Provider Education

37. PREVENTING FRAUDULENT ENROLLMENT • Distinguishing between legitimate and sham businesses • Presumption that “any willing” provider who wants to enroll can do so • CMS’ inability to conduct onsite reviews for every provider/supplier application makes it difficult to distinguish between legitimate and fraudulent providers. • Preventing fraud through effective program safeguards to prevent unscrupulous providers from enrolling • Surety bond requirement • Accreditation standards

38. PROVIDER/SUPPLIER ENROLLMENT • Goals: • Ensure that only eligible providers (e.g., hospitals, physicians) and suppliers (chain pharmacies, stand alone wheelchair stores) furnish services to Medicare beneficiaries. • Remove sham providers and suppliers from the program.

39. PROVIDER/SUPPLIER ENROLLMENT • Focus: Before Enrollment • More thorough due diligence on providers and suppliers • Ensuring accurate information on enrollees • Increased initial site visits to verify presence, legitimacy and compliance with standards • Focusing resources on the front end of the process • Will significantly reduce or eliminate many common schemes involving sham provider

40. PROVIDER/SUPPLIER ENROLLMENT • Focus: After Enrollment • More thorough due diligence on providers and suppliers • Increased site visits throughout the year once enrolled to verify presence • Monitor providers and suppliers to ensure they are only paid for items they are properly licensed to provide • Revocations and deactivations to remove “bad” providers and suppliers from the program

41. MEDICAL REVIEW TOOLS • Prepayment review- Medicare Administrative Contractors (MACs) review claims before they’re paid when aberrant billing practices by providers/supplies are identified. MACs closely examine claims for inappropriate billing. • Postpayment review- MACs and Recovery Audit Contractors (RACs) conduct reviews after the claims have been paid. • Probe reviews- Most egregious problems are selected for validation by probe review. These reviews are specific and targeted. • Referrals- During the course of review, if MACs or RACs suspect fraud, the claims are referred to the appropriate Program Safeguard Contractor (PSC)/Zone Program Integrity Contractor (ZPIC)

42. CONTRACTOR TOOLS

43. MEDICAL REVIEW SCENARIOS

44. AC / MAC MEDICAL REVIEW PROCESS Notify providers when initiating review Install a prepayment or postpayment edit Send Additional Documentation Requirements (ADR) requesting medical records or documentation for pre- and post-postpay reviews Apply statutes, regulations, NCDs, LCDs, and Medicare Manuals Referral to PSC / ZPIC Overpayment Recoupment Education Continue Monitoring

45. PSC / ZPICMEDICAL REVIEW PROCESS Open Investigation Notify or Not Notify Providers Request AC/MAC install edit ADR is issued Apply statutes, regulations, NCDs, LCDs, and Medicare Manuals Referral back to AC/MAC Take Admin Action in Consultation with LE Overpayment Determination Payment Suspension Prepay / Postpay Review Case Referral

46. POTENITAL TRIGGERS FOR MEDICAL REVIEW • Aberrant patterns outside the norm • High utilization of services or items • High costs services or items • Insufficient documentation submitted with a claim • High number of claim denials • Complaints • Trigger points for reviews are not limited to these examples NOTE: Typically, desk audits are conducted. However, onsite reviews may be conducted.

47. DATA ANALYSIS Data Analysis to identify potentially fraudulent misconduct Vulnerability Forecasting Primarily conducted by CMS Staff, PSCs, MACs and the RACs

48. PROVIDER EDUCATION Individual provider/supplier education to address root cause of billing errors and prevent errors resulting from lack of understanding -- “one on one” education Broad based education on medical review related policy and coding issues to all providers and suppliers Ensure that only properly licensed individuals furnish services to Medicare beneficiaries and that those individuals understand the Medicare laws & regulations

49. RECOVERY AUDIT CONTRACTOR PROGRAM • Conduct post-payment review of all paid Medicare claims based on data analysis. • Identify and correct improper payments. • The National Recovery Audit Contractor (RAC) program was fully implemented as of October ,2009. • Prior to beginning widespread review of an issue the RAC must receive CMS approval. As of December 9, 2009 CMS has approved 98 new issues. • Through the end of November 2009 $2.8 million in improper payments has been demanded.

50. MEDICARE FFS ERROR RATE Comprehensive Error Rate Testing (CERT) Program • Conducts post-payment review on claims to determine if they were paid appropriately • Randomly selects a sample of approximately 120,000 submitted claims • Requests medical records from providers who submitted the claims