Healthcare Fraud: An Overview HHS OIG / HIPAA / Healthcare Fraud
For CY 2004, total Medicare benefits paid were $303 billion. - Center for Medicare and Medicaid Services
Total Medicaid expenditures will reach a projected $338 billion in CY 2006. - Whitehouse.gov
Topics Reviewed: • HHS OIG • HIPAA • Financial-Type Frauds • - Altered or Fabricated Medical Bills/Other Documents • - Excessive or Unnecessary Treatments • - Billing Schemes • - Charging for Services Not Provided • - Upcoding • - Exaggerated Medical Disability • - Collecting on Multiple Policies for the Same Illness
Topics Reviewed (cont.): • Quackery • - Spotting Quacks • - Common Misconceptions • - How it Sells • - Why People are Vulnerable • - Science vs. Pseudoscience • - Identifying Quack Cures
Doctor, is it serious? Healthcare fraud costs consumers $85 billion,or five percent of the annual $1.7 trillion spent on healthcare in America. Every day about $250 million is wasted on healthcare fraud. – Blue Cross and Blue Shield Association
Created by theIG Actin 1978 • 58 OIG Offices in Fed Gov • Billions Recovered Annually • Helps Protect Integrity of Government • IG Reports to Congress • Promotes Changes to Public Policy • Good Government and Accountability
IG Mission • Detect and Prevent Fraud, Waste and • Abuse in Government
The IG: Big Goals, Small Agency
Health and Human Services Agencies • Medicare & Medicaid; CMS • CDC • FDA • NIH, Many Other Entities
HHS OIG Mission • As mandated by Public Law 95-452, to protect the integrity of HHS programs and the health and welfare of the beneficiaries of those programs.
OEI Mission The OEI's mission is to improve HHS programs by conducting evaluations that provide timely, useful, and reliable information and advice to decision makers. OMP Mission The Office of Management and Policy (OMP) is the staff organization within the Office of Inspector General (OIG) established to help the Inspector General and OIG components pursue the OIG mission through OIG budget formulation and execution; OIG-wide policy development; coordination, integration, and dissemination of OIG information; liaison with the Department and external organizations; information resources management and administrative support services.
OIG Work • Financial Audits • Operational Audits • Government Reporting Audits • IT Audits • Security Reviews
HHS OIG Current Projects Highlights • http://oig.hhs.gov/publications/docs/workplan/2004/2-CMS%20FY04.pdfnancial • Medicare Hospitals • Medicare Home Health • Medicare Nursing Homes • Medicare Health Professionals • Medicare Medical Equipment • Medicare Drug Reimbursement • Medicare Contractors
HHS OIG Current Projects Highlights • http://oig.hhs.gov/publications/docs/workplan/2004/2-CMS%20FY04.pdfnancial • Medicaid - Various • General Administration • Investigations • Legal Counsel
OAS Mission We, the independent auditors for the Department of Health and Human Services, identify and report ways to improve, through a shared commitment with management, the economy, efficiency and effectiveness of operations and services to recipients of HHS programs.
OIG/OAS Audit Process • Audit Assignment • Entrance Conference • On Site Information Gathering • Teammate Processing • Final Report Draft • Approvals • Final Report On Line
HIPAA aka the Kassebaum-Kennedy Act
HIPAA Intro and Highlights • HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996 • Deadline for implementation of standard HIPAA format was October 16, 2003. This is the date that entities must have been ready to conduct transactions electronically in the standard HIPAA format with any health plans/payers.
HIPAA • This law impacts all areas of the health care industry. It is probably best known as a national standard to protect the privacy of personal health information. • Check out: • http://www.hhs.gov/ocr/hipaa/
HIPAA: An Act: To amend the Internal Revenue Code of 1986 to improve portability and continuity of health insurance coverage in the group and individual markets, to combat waste, fraud, and abuse in health insurance and health care delivery, to promote the use of medical savings accounts, to improve access to long-term care services and coverage, to simplify the administration of health insurance, and for other purposes.
HIPAA Major Elements To improve portability and continuity of health insurance coverage in the group and individual markets. WHAT THIS MEANS: This law was designed to ease a problem known as "job lock" — the reluctance to move from one company to another for fear of losing health coverage. Another federal law called COBRA helps you buy benefits when you're between jobs. The U.S. Centers for Medicare and Medicaid Services warns it’s crucial to maintain health coverage when you leave a job, if you want to avoid exclusions for pre-existing conditions in your new employer’s health plan: “If you had group health plan coverage at your last job, you probably will be offered COBRA continuation coverage. If you are eligible for such continuation coverage, it counts as creditable coverage. In addition, you must accept and exhaust COBRA benefits before you can obtain coverage in the individual market as a HIPAA eligible individual.”
HIPAA Major Elements Tocombat waste, fraud, and abuse in health insurance and health care delivery. WHAT THIS MEANS:The federal government is gearing up to enforce health care fraud and abuse laws through appropriations from the Health Insurance Portability and Accountability Act (HIPAA). The FBI has appropriated $434 million over five years for this program. DHHS and the Attorney General have also appropriated funds. Approximately 60-70% of the DHHS appropriations go directly to the Office of the Inspector General. Title II of HIPAA establishes the HCFAC Program to combat health care fraud, waste, and abuse. Included within this overarching program is the Medicare Integrity Program (MIP) and the HCFAC Account. Through the efforts of CMS and its partners, these programs return multiple dollars to the Medicare Trust Funds for each dollar spent fighting fraud, waste, and abuse.
HIPAA Major Elements To promote the use of medical savings accounts. WHAT THIS MEANS: Medical savings accounts (MSAs) have shown that they can help health care consumers control costs, exercise greater choice in and control of their own health care, improve access to medical care, and increase personal savings. HIPAA established a five-year MSA demonstration project for a select group of individuals—employees of small firms with 50 or fewer workers and self-employed individuals. MSAs under HIPAA provided federal tax deductions for contributions to multiyear savings accounts established for medical purposes. The MSA concept is still being developed. Further information about MSAs is available from the Internal Revenue Service's Website, www. irs. gov, in Publication 969.
HIPAA Major Elements To improve access to long-term care services and coverage. WHAT THIS MEANS:HIPAA legislation was designed partly to provide favorable tax treatment to "federally qualified" long-term care insurance policies. Policies sold before Jan. 1, 1997, are generally considered to be tax-qualified. Policies sold after Dec. 31, 1996, must meet new standards to be considered qualified. While these standards include a number of consumer protections, they also specify the criteria that a covered individual must meet before any benefits can be paid. In some instances, tax-qualified policies may require an individual to meet disability criteria that are more restrictive than many non-tax-qualified policies. Individuals who are covered by tax-qualified policies are allowed to deduct their premiums, up to a maximum limit (provided the taxpayer itemizes deductions and has medical costs in excess of 7.5 percent of "adjusted gross income").
HIPAA Major Elements To simplify the administration of health insurance. WHAT THIS MEANS:The intent is to simplify administrative and financial data transactions by defining new codes and unique identifiers and by standardizing transactions and EDI formats. Hospitals, physician offices, home health agencies, nursing homes, affiliated providers, payers, employers, data services, and regulatory agencies are impacted by HIPAA.
HIPAA Major Elements To simplify the administration of health insurance (cont.) Transaction Sets impacted: - Health Care claim or encounter information;- Enrollment and disenrollment in a health plan;- Eligibility for a health plan;- Claim payment and remittance advice;- Premium payments;- Health Care claim status;- Referral certification and authorization;- Health Care claim attachment;- First report of injury.
HIPAA Major Elements To simplify the administration of health insurance (cont.) Security Reasonable and appropriate administrative, technical and physical safeguards are to guard the integrity and confidentiality of information, protect against reasonably anticipated threats or hazards to security and integrity of the information and unauthorized uses or disclosures of the information, and to maintain standards of compliance by officers and employees of applicable entities. For more information on security, see http://aspe.hhs.gov/admnsimp .
The Penalties for Violating HIPAA Privacy Standards • 42 USC 1320d-6 (HIPAA Sec. 1177) contains the criminal penalties for violating the HIPAA privacy standards. It states: • "a. Offense.— • A person who knowingly and in violation of this part— • uses or causes to be used a unique health identifier; • obtains individually identifiable health information relating to an individual; or • discloses individually identifiable health information to another person, shall be punished as provided in subsection (b). • b. Penalties.— • A person described in subsection (a) shall— • be fined not more than $50,000, imprisoned not more than 1 year, or both; • if the offense is committed under false pretenses, be fined not more than $100,000, imprisoned not more than 5 years, or both; and • if the offense is committed with intent to sell, transfer, or use individually identifiable health information for commercial advantage, personal gain, or malicious harm, be fined not more than $250,000, imprisoned not more than 10 years, or both."
Altered or Fabricated Medical Bills/Other Documents - CMS-1500: These claim forms (formerly HCFA-1500) are used to submit health insurance claims for services provided by health care professionals to Medicare and Medicaid, insurance companies or clearinghouses for processing. - UB-92: These hospital claim forms are used to bill health insurance claims for services provided by hospitals to Medicare and Medicaid, insurance companies or clearinghouses for processing.
Altered or Fabricated Medical Bills/Other Documents (cont.) - ADA Dental Claim Form: Authorized by the American Dental Association, this form is used by dentists to file claims with insurance companies on behalf of their patients.
Altered or Fabricated Medical Bills/Other Documents (cont.) Example 1: In a scheme that has become popular in South Florida and some other locations, false medical providers/corporations are set up using the identities of people who are transient or on Medicaid. Names of people who have insurance are obtained illegally, then phony bills are generated and submitted to insurers. Another twist to this scam is to use the name and tax identification number of a legitimate medical provider, but change the billing address to a post office box or mail drop. Benefit checks are sent to the "new address" without the provider's knowledge.
Altered or Fabricated Medical Bills/Other Documents (cont.) Example 2: Defendant solicited personal injury claimants to stage slip-and-fall accidents and file insurance claims falsely representing that they had sustained physical injuries in staged accidents, so as to recover settlements from insurance companies. Defendant received referral fees of up to $800 per claimant from personal injury attorneys to whom he referred the personal injury claimants and from chiropractors and other health care professionals who purportedly treated the personal injury claimants.
Altered or Fabricated Medical Bills/Other Documents (cont.) Example 2 (cont.): Chiropractors and other health care professionals then in turn fabricated medical bills and reports describing treatment of personal injury claimants that did not occur to make it appear as though the claimants were seriously injured in the staged accidents,and thereby increase the value of the personal injury claims.
From the Battle Creek Sanitarium and Dr. John Harvey Kellogg. Their diet program provided Kellogg's Corn Flakes; from their Mechanotherapy Department came the Vibratory Chair. The chair shakes violently and is painful to sit on, but after a few minutes of treatment it would supposedly stimulate intestinal peristalsis. A longer treatment was used to “cure” back pain. Also see: “The Road to Wellville” (movie).