nbeckleyProviders in Florida have gotten used to all the jokes about our fine state, and in particular the one about the city of Miami being the epicenter, or ground zero, of Medicare fraud (cue up “Conga” with Gloria Estefan and the Miami Sound Machine).

The hot Medicare Web site known as Stop Medicare Fraud is geared toward public education about Medicare fraud as well as showcasing Medicare fraud “perps.”  There are nice photos of senior citizens that accompany stories on how to protect oneself from fraud, how to spot fraud and how to report Medicare fraud. There is a map of the United State on the home page, where you are just a click away from seeing the latest fraud releases from your state.

Scam and Slam

Much of the fraud reported recently through the Medicare strike forces is easily recognized as outright fraud of sham operators bilking the Medicare program by billing for services and goods that are never provided, cooking up schemes involving complicit beneficiaries who are paid to “borrow” Medicare numbers, or loaning signatures and certifications for a hundred bucks a pop. The folks involved in these types of scam operations are traveling carnival road shows. The ruse is run for a while in a given city, then the scam artists pick up roots and move from Miami to Houston, Detroit to Los Angeles, Tampa to Baton Rouge.

Many of us in the healthcare industry understand the difference between these types of criminals and legitimate providers who fall prey to the eagle eyes of the Medicare program’s integrity oversight system because of sloppy documentation or incorrect coding and billing techniques. So it’s probably ok to ignore the Stop Medicare Fraud Web site, or check it occasionally to see if the scam artists have moved into your community, right? NOT!

Big Pharma, Big Fines

In a speech carried as a live Webcast this past October, Assistant Attorney General Tony West detailed several huge settlements involving drug companies, including the largest healthcare fraud settlement in history – a $2.3 billion settlement by Pfizer and its subsidiary, Pharmacia & Upjohn Company.

According to West, “that settlement included a record $1.3 billion in criminal fines and forfeiture; $1 billion to resolve serious civil fraud allegations, including over $300 million to struggling state Medicaid programs; and a corporate integrity agreement negotiated by the HHS Inspector General designed to deter future conduct that does harm to taxpayers and public health.”

Additionally, West noted that, “Eli Lilly paid more than $1.4 billion and entered into a corporate integrity agreement to resolve claims of off-label marketing. Quest Diagnostics paid over $300 million, pled guilty to a violation of the Food, Drug and Cosmetic Act and entered into a corporate integrity agreement to resolve claims that it misbranded diagnostic test kits sold to laboratories, and Aventis Pharmaceuticals paid over $95 million and entered into a corporate integrity agreement to resolve claims that it knowingly failed to pay proper rebates to Medicaid.” So these are big drug companies, and they pay these fines and keep on selling drugs, and consumers still continue to fill their prescriptions as if nothing ever happened. The amounts of money are almost too large to comprehend.

How the Legit Get Hit

So now where does this leave hospitals, skilled facilities, physician practices and outpatient providers in the RAC program? Somewhere between the staggering fines of the drug companies and the tales of the sham operators are the legitimate providers who get caught in the traps of the Program Integrity Program, including the RAC program – albeit often by their own devices, but nonetheless caught.

The RAC program contractors have been asked to report suspected fraud to the proper authorities. This likely will be done by the RACs after performing a series of claims reviews – and the incentive of the appeals process comes in the form of the 9-12 percent bounty fees they collect on denied claims.

However, as the RACs post their issues on their respective Web sites and file reports with CMS, the MACs and other Program Integrity Contractors will have the opportunity to peek at the RAC “bounty” and reframe their own probe reviews and investigations.  Throw in a little extrapolation and that begins to add up to serious money, and the MACs and ZPICs also are likely to refer suspected cases of fraud and even abuse to the OIG for further investigation.

Lull Before the Storm

It is more important now than ever to use this little lull before the storm, occurring prior to RAC medical necessity reviews, to establish and check internal compliance systems.

Here is a checklist to get you started:

  • Verify the address where RAC demand and medical records requests go. Even if you verified this in the past, verify it again. Send yourself a “RAC” letter to that address.
  • Establish an internal timeline and route map detailing how a RAC request flows through your system. Test the timeline, and test it again, making sure to account for employee turnover, vacations, construction, mailroom glitches, etc. Think of it as running multiple fire drills, each from a different location. Document and take notes: what went wrong and what went right?
  • As the RACs continue to post issues for outpatient automated reviews, as well as DRG and discharge validation, assemble the RAC CMS reference citations into your RAC Commonplace Book. Identify your internal experts and make arrangements for those clinical areas in which external expertise might be necessary.
  • Verify members of your RAC team and their decision-making authority in the appeals process, and make sure the risk-reward issue is addressed squarely between clinical, operations and finance.
  • Select a known issue and identify a potentially noncompliant medical record. Map out your appeals process. Select the next known issue, and, well, you get the drift, map out that appeals process as well. Continue in this fashion until you have a map of all issues posted by your RAC as your template.
  • Review your clinical policies and procedures to ensure that they are up-to-date and that practice is consistent with the P&P. Then review operational and administrative policies and procedures and ensure compliance, and update policies and procedures as necessary to reflect actual practice.

So tune back in to “Conga” with the Miami Sound Machine, and comfortably swagger into the post office knowing that your picture many never appear on the wall.

About the Author

Nancy Beckley is a co-founder and president of Bloomingdale Consulting Group, Inc., providing consulting services to the rehab professional. Nancy is certified in healthcare compliance by the Healthcare Compliance Board, and serves on the Part A and Part B Provider Outreach Education and Advisory Panel for First Coast Services Options (Florida Medicare). She previously served on the CMS Professional Expert Technical Panel for Comprehensive Outpatient Rehabilitation Facilities.

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