Combating Healthcare Fraud
Martha A. Stearns, RN, BSN, CPC
Clinical Investigator, MVP Healthcare
Special Investigations Unit
Agenda
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Definition of Fraud vs. Abuse
Types of Provider and Member
Fraud
Fraud at the National Level
Fraud at the Local Level
Examples of SIU Investigations
Fraud and Abuse Definitions
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Fraud – Any type of intentional deception
or misrepresentation made by a person
with the knowledge that the deception
could result in some unauthorized benefit
to himself or some other person.
Abuse – Provider practices that are
inconsistent with sound fiscal, business,
or medical practices, and which result in
unnecessary expenses or costs to an
insurer, or reimbursement for services
that are not medically necessary and/or
fail to meet professionally recognized
standards for health care.
Types of Suspect Provider Activity
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Services or supplies billed but not
provided
Diagnosis or service that is
misrepresented
Duplicate claim submissions
Up coding
Improper use of modifiers
Unbundling
Suspect Member Activity
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Forged or altered documentation
Multiple pharmacies/doctor
shopping
Eligibility Issues
Identity Theft
So How Big is the Problem??
Your Wasted Health Care Dollars
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The United States spends more
than $2 trillion on health care every
year. Of that amount, the National
Healthcare Anti-Fraud Assoc.
(NHCAA) estimates conservatively
that at least 3%-or more than $60
billion each year-is lost to fraud.
A few NHCAA Headlines for April
In the
News
04.30.15
Miami: Physician sentenced for role in $5.5
million Medicare fraud scheme....
04.30.15
Los Angeles: Hawthorne Woman Sentenced to
More Than Six Years in Federal Prison for...
04.30.15
Boston: Maine Nursing Home Operator to Pay
$300,000 to Resolve Allegations...
04.29.15
Newark: New Jersey Doctor Sentenced to One
Year and One Day in Prison for Taking Bribes...
04.27.15
Houston: Husband and wife sentenced for roles
in $9 million health care fraud scam....
And the Lead Story on the FBI
Website in April……..
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Rochester Man Sentenced for
Drug and Health Care Fraud
Offenses
U.S. Attorney’s Office April 17, 2015
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ROCHESTER, NY—U.S. Attorney William J.
Hochul, Jr. announced today that Michael
Marcera, Sr., 57, of Rochester, NY, who
was convicted of conspiracy to possess
oxycodone with the intent to distribute
and health care fraud, was sentenced to
time served (97 months in prison) by U.S.
District Judge Charles J. Siragusa..
Assistant U.S. Attorney Frank H.
Sherman, who handled the case,
stated that between January 2003 and
February 2007, the defendant
participated in a criminal scheme with
others to obtain from a medical doctor
prescriptions for oxycodone, a
controlled substance, by representing
to the medical doctor that the
medication was medically necessary,
while knowing that the medication, in
fact, was not medically necessary.
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After obtaining the prescriptions from the
medical doctor, Marcera and others had
each prescription filled at a pharmacy and
then sold the medications for profit. The
victim health care insurance programs
(Excellus BlueCross BlueShield, Preferred
Care, New York State Workers
Compensation [ACE ESIS Inc.], and
Allstate Insurance Company) reimbursed
the pharmacies for the costs associated
with the filling of the fraudulent
prescriptions.
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Aside from time served, the defendant
was also ordered to pay restitution
totaling $216,000 to Excellus BlueCross
BlueShield, Preferred Care,New York
State Workers Compensation [ACE ESIS
Inc.], and Allstate Insurance Company
The Fraud Busters
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What agencies are empowered to
investigate and/or prosecute
fraudulent or abusive Healthcare
schemes?
Fighting Fraud at the National Level
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The FBI, U.S. Postal Service,
Medicare, Medicaid and other
federal agencies are heavily
involved in combating insurance
fraud.
Pt. Protection and Affordable Care
Act of 2010 (ACA)
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Provides for a $350 million dollar
commitment to prevent fraud
through instituting more advanced
screening and prevention techniques.
Made obstructing a fraud
investigation a crime;
Increased the federal sentencing
guidelines for offenses by 20 to 50%
for crimes involving more than $1
million in losses.
Provisions of the Health Care Bill
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More detailed screening of new providers.
New software to allow CMS and the states to
identify potential fraudulent trends.
 This process works much like the one in use
by your credit card company. Ever get a call
from them inquiring about a recent
purchase?
It’s because a computer program identified
something unusual or that was inconsistent
with previous purchases.
The government will be able to temporarily
suspend payment to any provider thought to
be engaging in fraudulent activity.
 Medicare
will analyze variables such as
beneficiary, provider and services, and
start an investigation of questionable
billing before more claims get paid.
 This is an attempt to limit potentially
fraudulent payments at the front end,
and eliminate the need to chase after
payments (only to find the scammers
have either moved to a new location or
fled the country).
Pay and Chase is Ineffective and
time Consuming
Additional ACA Provisions
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Mandatory anti-fraud compliance
plans for providers and suppliers.
Increased funding for staffing for
legal enforcement.
Broader authority for Recovery Audit
Contractors (RAC) to correct over
and under payments.
Greater penalties for those engaging
in fraud activities.
HHS and the Justice Dept.
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Joint actions by these 2 agencies
include:
the Health Care Fraud Preventions
and Enforcement Action Team
(HEAT), and;
the Medicare Fraud Strike Force.
HEAT in ACTION
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Since their inception in March 2007, Strike
Force operations in nine locations have
charged almost 1,900 defendants who
collectively have falsely billed the Medicare
program for almost $6 billion.
In addition, CMS, working in conjunction
with HHS-OIG, has suspended enrollments
of high-risk providers in five Strike force
locations and has removed over 17,000
providers from the Medicare program since
2011.
27 Medical Professionals, Including 16
Doctors, Charged with Health Care Fraud
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May 13, 2014
A nationwide takedown by the
Medicare Fraud Strike Force
operations in six cities has resulted
in charges against 90 individuals for
approximately $260 million in false
billing
This coordinated takedown was the
seventh national Medicare fraud
takedown in Strike Force history.
The Charges
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The defendants charged are accused of various
health care fraud-related crimes, including
conspiracy to commit health care fraud,
violations of the anti-kickback statutes and
money laundering.
In many cases, court documents allege that
patient recruiters, Medicare beneficiaries and
other co-conspirators were paid cash kickbacks
in return for supplying beneficiary information
to providers, so that the providers could then
submit fraudulent bills to Medicare for services
that were medically unnecessary or never
performed.
More Specifics - Miami
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Two defendants were charged in connection
with a $23 million pharmacy kickback and
laundering scheme. Court documents allege
that the defendants solicited kickbacks from a
pharmacy owner for Medicare beneficiary
information, which was used to bill for drugs
that were never dispensed. The kickbacks
were concealed as bi-weekly payments under
a sham services contract and were laundered
through shell entities owned by the
defendants.
Los Angeles
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Eight defendants were charged in Los Angeles
for their roles in schemes to defraud Medicare
of approximately $32 million.
In one case, a doctor was charged for causing
almost $24 million in losses to Medicare
through his own fraudulent billing and
referrals for durable medical equipment,
including over 1,000 expensive power
wheelchairs, and home health services that
were not medically necessary and frequently
not provided.
Detroit
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Seven defendants were charged for their roles
in fraud schemes involving approximately $30
million in false claims.
In one case, four individuals, including a doctor,
were charged in a sophisticated $28 million
fraud scheme, where the physician billed for
expensive tests, physical therapy and injections
that were not necessary and not provided..
And let’s not forget N.Y.S.
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In Brooklyn, New York, the Strike Force
announced an indictment against Syed
Imran Ahmed, M.D., in connection with
his alleged $85 million scheme involving
billings for surgeries that never occurred;
Dr. Ahmed was arrested and charged
with health care fraud and making false
statements.
Healthcare Fraud’s “Most Wanted List”
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The Dept. of Health and Human Services
of the OIG has created a list of the top 10
suspects being actively sought on charges
of submitting $124 million worth of
fraudulent claims to CMS and Medicaid.
In all, they are currently seeking more
than 170 fugitives.
You can access this site at
http://oig.hhs.gov/fugitives/
Statutes Used to Indict and
Prosecute for Fraud
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Health care fraud
Embezzlement of
theft in connection
with health care
False statements
relating to health
care
Obstruction of a
Federal health care
fraud investigation
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Conspiracy to
commit fraud
False Claims
Bribery
Kickbacks
Money laundering
Wire Fraud
Mail Fraud
Anti-kickback Statute
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Prohibits:
Knowingly and willfully
soliciting, receiving,
offering or paying
remuneration (including
any kickback, bribe or
rebate) for referrals for
services that are paid in
whole or in part under a
federal health care
program (which includes
the Medicare program).
Penalties:
Fines up to $25,000
and/or imprisonment up
to five years
Stark Law
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Prohibits:
Physicians from referring
patients to an entity with which
the physician or a physician’s
immediate family member has a
financial relationship .
Penalties:
Up to $15,000 for each service
provided
Up to $100,000 for entering into
an arrangement or scheme
False Claims Act
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One of the most powerful
tools in this effort is the
False Claims Act.
Since January 2009, the
Justice Department has
recovered a total of more
than $14.8 billion through
False Claims Act cases, with
more than $10.8 billion of
that amount recovered in
cases involving fraud
against federal health care
programs.
One Recent Example in NYS
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On Tuesday, August 27, 2013, the
Justice Dept. released the following
statement:
“MRI Diagnostic Testing Company,
Imagimed LLC, and Its Former
Owners and Chief Radiologist to Pay
$3.57 Million to Resolve False
Claims Act Allegations”
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New York-based Imagimed LLC, the
company’s former owners, William B. Wolf
III and Dr. Timothy J. Greenan, and the
company’s former chief radiologist, Dr.
Steven Winter, will pay $3.57 million to
resolve allegations that they submitted to
federal healthcare programs false claims for
magnetic resonance imaging (MRI)
services, the Justice Department
announced today. Imagimed owns and
operates fifteen MRI facilities, located
primarily in New York state, under the
name “Open MRI.”
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Allegedly, from July 1, 2001, through
April 23, 2008, Imagimed, Greenan, Wolf
and Winter submitted claims to Medicare,
Medicaid and TRICARE for MRI scans
performed with a contrast dye without the
direct supervision of a qualified physician.
Since a potential adverse side effect of
contrast dye is anaphylactic shock,
federal regulations require that a
physician supervise the administration of
contrast dye when it is used for an MRI.
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It was also alleged that from July 1, 2005,
to April 23, 2008, Imagimed, Greenan, Wolf
and Winter submitted claims for services
referred by physicians with whom
Imagimed had improper financial
relationships.
In exchange for these referrals, Imagimed
entered into sham on-call arrangements,
provided pre-authorization services without
charge and provided various gifts to certain
referring physicians, in violation of the
Stark Law and the Anti-Kickback Statute.
The Local Connection
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Dr. Greenan applied for participation
with Preferred Care about 10 years
ago.
He was denied as his facility, Open
MRI, didn't have any physicians on
site or plan for patients in need of
emergency care.
MVP Mission Statement
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“The Mission of the SIU is to
objectively detect and properly
resolve situations where a provider,
member or other person may have
defrauded or inappropriately
obtained payment(s).”
Staffing and Credentials
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Work within and alongside the Legal
Dept.
Our Director has the Accredited
Healthcare Fraud Investigators
(AHFI) certification.
We have 3 Clinical Analysts, all of
whom are RN’s with one or more
CPC designations in addition to their
nursing and professional degrees.
Staffing and Credentials (cont’d)
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There are 2 non clinical investigators:
a former undercover police officer
and a Medicaid Fraud investigator.
And 2 analysts with extensive claims
and billing experience, who utilize a
computer driven investigative tool to
help identify duplicate payments and
unusual billing patterns.
Activities and Results
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The clinical analysts/investigators
investigate ~ 350 – 400 referrals a
year.
Approximately $3-$5 million dollars
is brought back into the company
on an annual basis.
Case Examples
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Let’s look at several cases of local
Fraud/Abuse activity during the past
year.
A Devious Dermatologist
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Dr. D., a Dermatologist/Plastic surgeon in
the Albany area, was found to be billing a
high number of complex repairs following
lesion excisions.
A Plastic Surgery coding expert reviewed
numerous submitted claims from Dr. D.
against the actual medical record
documentation and found a pattern of up
coding.
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To report complex repair codes, the
medical record must document that
extensive undermining was done and
should provide justification for its
need.
If the undermining was minimal, and
a layered repair was done, it falls
into the intermediate repair category.
What is Undermining?
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Undermining means cutting the
fibrous septae that connect the skin
to the underlying fascia to facilitate
wound closure.
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Per Dr. Alex Miller, who represents the
American Academy of Dermatology on the
AMA-CPT Advisory Committee, it is up to the
surgeon to ethically decide when undermining
has reached the “extensive” category.
The billing of complex repair codes has
steadily increased over the past several years.
For example, according to Medicare data for
2011, utilization of CPT code 13101 (Repair,
complex, trunk; 2.6 cm to 7.5 cm) increased
by almost 9 percent from 2010.
Findings of Dr. D’s MR audit
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The procedure notes were found to be a
template with little to no variation from
one pt. to the next.
All lesions were “elliptically excised down
to the subcutaneous tissue”. Then, “in
order to facilitate closure and to minimize
scarring, wound margins were sharply
undermined, the tissue was mobilized and
advanced. It was closed in a meticulous
complex fashion with buried retention
sutures.”
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Our specialist determined that undermining
the wound margins was not supported by
the documentation, nor was it medically
necessary based on the lesion type and
size. Restitution was ordered.
But that’s not all….In the course of the
investigation, another interesting finding
was uncovered.
OPMC Investigation
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On 2/9/10, Dr. D was convicted of
misbranding a drug held for resale after
shipment in interstate commerce.
Dr. D represented to his patients (and
documented in their medical records) that
he was treating them with Botulinum Toxin
Type A, which is approved for use on
humans.
Switcheroo
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In fact, Dr. D injected patients with a
solution of Botulinum Toxic Type A (TriToxin) that had not been approved for use
on human beings by the FDA.
In the signed consent forms he
misrepresented the injections as “Botox”.
Investigative Findings
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Dr D was found guilty of professional
misconduct by committing a crime under
federal law, negligence on more than 1
occasion, failure to maintain accurate
records and performing services not duly
authorized.
Sentence
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OPMC sentenced Dr. D to 3 years
probation, required him to serve 300 hours
of community service, and fined him
$5,000.00.
2nd Case Study
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Dr. MI is a Pediatrician with a large
Medicaid population, who was found to
have an unusually high number of
patients complaining of hearing and vision
problems, and who then required
additional testing.
Our audit found a high incidence of
otoacoustic emission testing (OAE), visual
field testing and visual evoked potential
testing (VEP) billed by this office.
What Are These Tests????
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2 of the tests fall under the CPT heading of
Special Opthalmological Services:
“Services in which a special evaluation of
part of the visual system is made, which
goes beyond the services included under
general opthalmological services, or in
which special treatment is given.”
Investigation and Findings
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We requested MR’s from 50 dates of service
during the period of 1/1/11 – 5/13/13.
The office notes appeared to be
computerized templates modeled after the
CMS Documentation Guidelines, but with
little unique, member specific
documentation.
Unneccessary E&M/Testing
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Most of the
patients had
typically been
seen recently
for a well child,
preventative
visit, then
brought back
for additional
vision and
hearing
testing.
The SureSight Vision Screener
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This office was found to have been using
the SureSight vision screener and billing
CPT 92081 (visual field exam). This
screener is actually used to test for
refractive error, not visual field.
The Academy of Pediatrics Pediatric Coding
Newsletter June 2012 recommended using
CPT 99173 (screening for visual acuity) for
this test.
CPT 99173 is normally bundled into the E/M
code and not paid separately.
All submitted 92081 claims were changed to
99173 and denied as global to the E/M.
Additional Indications of Problems
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Upon commencing our investigation of
this provider, we uncovered an OPMC
action from June of 2012.
In addition to his Pediatric practice, he
operated a laser treatment clinic from
approx. 2008 – 2012.
In June of 2012 he was placed on
probation for 3 years by the OPMC for
negligence (on more than 1 occasion),
incompetence (on more than 1 occasion),
and failure to maintain MR’s.
OPMC Actions
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“The physician shall immediately terminate
all medical practice in the area of intense
pulsed light treatments and laser surgery,
and is prohibited from ever restarting this
area of practice. While on probation, the
physician may only practice medicine when
monitored by a licensed physician; certified
in an appropriate specialty.”
Criminal Prosecutions
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SIU investigations
occasionally result in
criminal convictions.
In 2014, three cases
ended with
convictions and
made the news.
Judgment Day for Surgeon
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Following a 3 year
investigation that
included Federal
investigators and
insurance carriers,
a convicted former
orthopedic surgeon
was sentenced to 4
1/2 years in federal
prison after
surrendering to the
US Marshals.
2014 FWA Awareness Training
Phantom Surgeries
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The surgeon was found guilty of operating a
multi-million dollar scheme to defraud heath
insurance carriers, by lying about the "nature
and scope" of surgeries while working as an
orthopedist for a large multi-specialty medical
group.
He performed “phantom surgery”. He put pt’s
under anesthesia, put a scope in, but didn't
repair anything.
In addition to the criminal conviction, since
2008, more than 250 civil lawsuits have been
filed against the surgeon alleging medical
malpractice.
Optical Shop Owner Sentenced
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The NYS Attorney
General’s Office (NYS
AG) prosecuted an
individual on charges
related to fraudulently
operating as an
optometrist and
providing ophthalmic
dispensing services
without a license for
either profession.
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The individual, who ran the optical practice,
reportedly attended optometry school but
had not passed the state exams.
He pled guilty and admitted to engaging in
a fraudulent scheme, and billing Medicaid
and other payers for services.
He received a three-year conditional
discharge on the condition he make
$116,000 in restitution to the state of New
York and several health insurers, including
MVP. He was also sentenced to 150 hours
of community service.
Insurance Broker Convicted of
Fraud
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An insurance agent
linked to a large
insurance fraud scheme
through a local Chamber
of Commerce, was
sentenced to 6 months in
a county correctional
facility, 500 hours of
community service, and
5 years probation. He
will also be paying a
$5,000 fine and lost his
insurance license.
Location, Location, Location
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The scheme included enticing people in
New York City, Long Island and New Jersey
to buy coverage through an upstate
Chamber of Commerce, because the
coverage was less expensive than what was
being offered in their local areas
Had this scheme not been detected early
on, it could have been financially disastrous
for MVP resulting in estimated annual
losses of over $500,000 to $1,000,000.
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The former agent was convicted of one
count of scheming to defraud in the first
degree, and one count of third-degree grand
larceny.
The scheme’s co-conspirator and former
chamber President, who was fired by the
chamber several days after his arrest, pled
guilty to avoid going to trial and was
sentenced to a 2 year conditional discharge
and fined $2,000.
How Do YOU Make the Difference?
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Attentive
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Alert
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Educated
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Conscientious