Fraud, Waste, and Abuse in Health Care

Educational Objectives

The goal of this program is to improve efforts for prevention of fraud, waste, and abuse in health care. After hearing and assimilating this program, the clinician will be better able to:

1. Use data mining to discover patterns of fraud, waste, and abuse.
2. Encourage self-reporting of inappropriate billing.

Summary

Texas Department of Health and Human Services (HHSC): auditors, investigators, data analysts, attorneys, and policy analysts comprise the staff at the HHSC; Medicaid covers 53% of births and 62% of residents of nursing homes in Texas

Audit: a comprehensive review of provider records; data analytics are used to select which provider to audit, based on risk; information on the provider is obtained by analysis and questionnaires; the site visit involves an interview and review of medical records and compliance requirements (with, eg, existing contracts); compliance with the Texas Medicaid Provider Procedures Manual (TMPPM) is assessed if the contract is directly with the state in the fee for service program; for managed care organizations (MCOs), HHSC works with the MCO to identify the rules in the contract and assess for compliance; if an issue is found, HHSC asks the providers for more evidence, which may change the finding; the end result of an audit is a penalty, an administrative enforcement action, or no action; HHSC releases an audit annual plan every year which lists all the provider types scheduled for auditing

Inspection: a limited audit with a smaller sample; primarily done for risk assessment; records are quickly checked and if they are clean, the provider is passed; an audit may be performed if warranted; evidence of fraud triggers the opening of an investigation

Investigation: focuses on alleged intentional fraud, waste, or abuse (FWA); initial evidence is obtained through audits, inspections, or referrals from MCOs or the public

Review: claims are reviewed to determine if the billing is appropriate; peer review is performed on a small sample of providers; if there is an outlier, a small sample of records are reviewed; no further action is taken if the sample is clean; scrutiny is expanded for samples with issues

Data analysis: detection tools are enhanced with the use of data analytics; providers are selected based on data and evidence; HHSC uses multiple algorithms to identify providers; during fraud detection operations (FDOs), ≈15 algorithms are used, and most providers who are identified are scheduled for a visit by HHSC

Investigation process: investigations of providers are based on data mining; a preliminary investigation is required by statute for every referral received; HHSC has 45 days to determine if there is enough evidence to open a full investigation; referrals that are not in the jurisdiction of HHSC are referred to other agencies; HHSC refers to the Texas Medical Board and the Dental Board; criminal referrals are sent to the Medicaid Fraud Control Unit; civil fraud is referred to the civil Medicaid Fraud Office and the Attorney General's Office; HHSC receives ≈2500 referrals that trigger preliminary investigations/yr; ≈200 actual investigations are opened

Administrative enforcement actions: for cases of providers that make a minor, unintentional mistake, a letter is sent with instructions on how to bill, and the provider must acknowledge compliance; the infraction is considered intentional if it is repeated; prepayment review — HHSC works with the MCO to put the provider on prepayment review in cases of suspicion of incorrect billing; claims are reviewed for infractions before being paid; penalties — assessed for egregious infractions that were not serious enough to warrant expulsion from the program, or were not criminal actions that would be referred to a criminal fraud investigation; recouping funds — recoup of money paid inappropriately is required by the federal government, even if the mistake is HHSC’s; exclusion — used for egregious actions that are not necessarily criminal; criminal investigation and exclusion may occur simultaneously; HHSC always refers for criminal investigation; due process — the provider may respond within 15 days with more evidence; the penalty is cancelled if the evidence is deemed sufficient; providers may also take legal action

Provider screenings: conducted when the federal government considers certain types of providers to be high-risk (eg, durable medical equipment suppliers, home health agencies); the state also may designate providers as high-risk; HHSC is required to perform background screenings on providers identified as high risk, which includes finger printing and background checks of personnel

Priorities of HHSC: fraud prevention is preeminent; collaboration with MCOs to flag and correct incorrect codes; collaboration with program integrity partners and associations to prevent fraud; all parties are educated to understand the process; the third priority is emphasizing data-driven work; HHSC looks for ways to improve operations and efficiency

Fraud detection operations (FDOs): data-driven and designed to review providers that appear as statistical outliers; each provider is bound by contract to document medical services; all records must be kept for audits in programs enrolled in Medicaid; FDOs use data analytic methods to assess issues and determine whether an investigation or audit is warranted; providers are given 24 hr notice before record requests (for 30 people) staff and client interviews commence; most providers are not subject to FDOs

Data initiatives: the TMPPM lists rules on how to bill; HHSC uses algorithms to check claims and determine whether billing is inappropriate; differing rates within institutions — the emergency department has one rate and the observation area has a different rate; the rate is bundled; hospitals may try to bill for injections and infusions separately; HHSC recovered $50 million in the past 2 to 3 yr; referrals from MCOs — HHSC checks if the provider is exhibiting the same behavior in their other MCOs; the data that was generated may be used for future data analysis

Self-reporting: providers admit inappropriate billing; providers enrolled in Medicaid are required to inform HHSC ≦90 day of noticing inappropriate billing; algorithms may be used to identify other providers with similar billing patterns; HHSC performs a 5 or 7 yr lookback depending on the severity of the infraction; providers are asked for confirmation; providers may have made unintentional errors or do not have the correct documentation; money owed to the state as determined by HHSC may differ with what was arrived at by external auditors hired by the hospital; both parties may review a random sample of records in order to settle on a penalty

Fraud prevention protocol: offer incentives for providers to investigate FWA; providers may avoid prolonged investigation, litigation and overall high costs by self-disclosing overpayments; additional violations made by providers that self-report may be considered as mitigating factors while the administrative enforcement action is established, according to the relevant statue; accepting the results of self-reporters is not compulsory, but HHSC and the provider may work together to return funds; providers may be offered payment plans or other arrangements; HHSC has a distribution list which gives regular updates; FWA may be reported by calling HHSC or accessing their website; the relator receives a reward

Readings

Ekin T, Ieva F, Ruggeri F, et al. Statistical medical fraud assessment: exposition to an emerging field. International Statistical Review. 2018; 86(3), 379-402. https://doi.org/10.1111/insr.12269; Herland M, Bauder RA, Khoshgoftaar TM. Approaches for identifying U.S. Medicare fraud in provider claims data. Health Care Manag Sci. 2020;23(1):2-19. doi:10.1007/s10729-018-9460-8; Hill C, Hunter A, Johnson L, Coustasse A. Medicare fraud in the United States: can it ever be stopped?. Health Care Manag (Frederick). 2014;33(3):254-260. doi:10.1097/HCM.0000000000000019; DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services. State Guide to CMS Criteria for Medicaid Managed Care Contract Review and Approval. 2022; Jan 18. Available from: https://www.medicaid.gov/medicaid/downloads/mce-checklist-state-user-guide.pdf. Accessed on 3rd March 2023; Thaifur AYBR, Maidin MA, Sidin AI, et al. How to detect healthcare fraud? "A systematic review". Gac Sanit. 2021;35 Suppl 2:S441-S449. doi:10.1016/j.gaceta.2021.07.022.

Disclosures

For this program, members of the faculty and planning committee reported nothing relevant to disclose.

Acknowledgements

Ms. Kauffman was recorded at the Texas Society of Anesthesiologists 2022 Annual Meeting, held in Round Rock, TX, on September 8-11, 2022, and presented by the Texas Society of Anesthesiologists. For information about upcoming CME activities from this presenter, please visit tsa.org. Audio Digest thanks the speakers and presenters for their cooperation in the production of this program.

CME/CE INFO

Accreditation:

The Audio- Digest Foundation is accredited by the Accreditation Council for Continuing Medical Education to provide continuing medical education for physicians.

The Audio- Digest Foundation designates this enduring material for a maximum of 1.00 AMA PRA Category 1 Credits™. Physicians should claim only the credit commensurate with the extent of their participation in the activity.

Audio Digest Foundation is accredited as a provider of continuing nursing education by the American Nurses Credentialing Center's (ANCC's) Commission on Accreditation. Audio Digest Foundation designates this activity for 1.00 CE contact hours.

Lecture ID:

AN651701

Expiration:

This CME course qualifies for AMA PRA Category 1 Credits™ for 3 years from the date of publication.

Instructions:

To earn CME/CE credit for this course, you must complete all the following components in the order recommended: (1) Review introductory course content, including Educational Objectives and Faculty/Planner Disclosures; (2) Listen to the audio program and review accompanying learning materials; (3) Complete posttest (only after completing Step 2) and earn a passing score of at least 80%. Taking the course Pretest and completing the Evaluation Survey are strongly recommended (but not mandatory) components of completing this CME/CE course.

Estimated time to complete this CME/CE course:

Approximately 2x the length of the recorded lecture to account for time spent studying accompanying learning materials and completing tests.

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