HHS/DOJ Partner With Private Health Plans To Further Ramp Up Health Care Fraud Heat!

Health care providers and payers should ensure that practices for billing private payers can withstand the scrutiny of federal and state health care fraud enforcers after the July 26, 2012 announcement of a ground-breaking new public-private antifraud initiative between federal and state health care fraud fighters and a private insurers under which  private insurers will share an unprecedented amount of private health claims data, fraud detection practices, and other coöperation with federal and state official fraud prevention and prosecution efforts.

Government Health Care Fraud Fighters Partner With Private Insurers

The Federal health care fraud fighting departmental duo of the Departments of Health and Human Services (HHS) Justice (DOJ) last week expanded their network of fraud fighting resources by launching a “ground-breaking” partnership among the federal government, State officials, several leading private health insurance organizations, and other health care anti-fraud groups to prevent health care fraud. HHS and DOJ say the following organizations and government agencies are among the first to join this partnership:

  • America’s Health Insurance Plans
  • Amerigroup Corporation
  • Blue Cross and Blue Shield Association
  • Blue Cross and Blue Shield of Louisiana
  • Centers for Medicare & Medicaid Services
  • Coalition Against Insurance Fraud
  • Federal Bureau of Investigations
  • Health and Human Services Office of Inspector General
  • Humana Inc.
  • Independence Blue Cross
  • National Association of Insurance Commissioners
  • National Association of Medicaid Fraud Control Units
  • National Health Care Anti-Fraud Association
  • National Insurance Crime Bureau 
  • New York Office of Medicaid Inspector General
  • Travelers
  • Tufts Health Plan
  • UnitedHealth Group
  • U.S. Department of Health and Human Services
  • U.S. Department of Justice
  • WellPoint, Inc.

HHS & DOJ Say Partnering With Private Insurers Will Give Ongoing Anti-Fraud Efforts Even More Punch

In announcing the new partnership on July 26, 2012, HHS Secretary Kathleen Sebelius and Attorney General Eric Holder touted this new voluntary, collaborative public-private arrangement as the “next step” in the Obama administration’s efforts to combat health care fraud.

“This partnership is a critical step forward in strengthening our nation’s fight against health care fraud,” said Attorney General Holder.  “This Administration has established a record of success in combating devastating fraud crimes, but there is more we can and must do to protect patients, consumers, essential health care programs, and precious taxpayer dollars.  Bringing additional health care industry leaders and experts into this work will allow us to act more quickly and effectively in identifying and stopping fraud schemes, seeking justice for victims, and safeguarding our health care system.”

 “This partnership puts criminals on notice that we will find them and stop them before they steal health care dollars,” Secretary Sebelius said.  “Thanks to this initiative today and the anti-fraud tools that were made available by the health care law, we are working to stamp out these crimes and abuse in our health care system.”

Partnership Allows Feds To Use Private Payer Claims Data, Knowledge & Other Fraud Detection Resources

According to HHS and DOJ, the new partnership is designed to share information and best practices in order to improve detection and prevent payment of fraudulent health care billings. Its goal is to reveal and halt scams that cut across a number of public and private payers. HHS and DOJ say the partnership will private insurers to share their anti-fraud insights more easily with investigators, prosecutors, policymakers and other stakeholders and law enforcement officials more effectively to identify and prevent suspicious activities, better protect patients’ confidential information and use the full range of tools and authorities provided by the Patient Protection & Affordable Care Act (Affordable Care Act) and other statutes to combat and prosecute illegal actions.

One unprecedented element of this partnership will involve the sharing of information on specific schemes, utilized billing codes and geographical fraud hotspots between the public and private partners.  The partners say the planned sharing of claims data and other information will help partners prevent, detect and respond to potential health care billing fraud by:

  • Helping partners to take action, to prevent losses to both government and private health plans before they occur;
  • Improving their ability to spot and stop payments billed to different insurers for care delivered to the same patient on the same day in two different cities;
  • In the future to use sophisticated technology and analytics on industry-wide healthcare data to predict and detect health care fraud schemes. 

Presumably, this will involve the extension of the use of state-of-the-art technology and data mining practices like those the Centers for Medicare & Medicaid Services (CMS) already uses to review claims, to track suspected fraud trends and flag suspected fraudulent activity.

Partnership Expands Use & Reach of New Affordable Care Act & Other Health Care Fraud Detection & Enforcement Tools & Collaboration

The partnership builds upon and extends the reach and use of expanded legal tools created by the Affordable Care Act and other laws that Federal and state officials are using in their highly publicized war against health care fraud, waste and abuse in Medicare, Medicaid, the Children’s Health Insurance Program (CHIP) and, increasingly, private insurance plans.  Using these and other new tools, convictions under the Health Care Fraud and Abuse Control Program increased by over 27% (583 to 743) between 2009 and 2011, and the number of defendants facing criminal charges filed by federal prosecutors in 2011 increased by 74% compared with 2008 (1,430 vs. 821).

The Affordable Care Act and other legislative changes and related programs have significantly strengthened the powers of HHS, DOJ and other federal and state agencies to investigate and prosecute health care fraud.  Among other things, these amendments and programs included :

  • Qui tam and other whistleblower incentives and programs that encourage employees, patients, competitors and others to report suspicious behavior;
  • Require providers, plans to self-identify, self-report and self-correct false claims and certain other non-compliance;
  • Increase the federal sentencing guidelines for health care fraud offenses by 20-50% for crimes that involve more than $1 million in losses;
  • Create penalties for obstructing a fraud investigation or audit;
  • Make it easier for the government to recapture any funds acquired through fraudulent practices;
  • Make it easier for the Department of Justice (DOJ) to investigate potential fraud or wrongdoing at facilities like nursing homes;
  • Under the risk-based provider enrollment rules, providers and suppliers wishing to take part in Medicare, Medicaid, and CHIP who federal officials view as posing a higher risk of fraud or abuse now must undergo licensure checks, site visits and other heightened scrutiny including ongoing monitoring as part of the new Automated Provider Screening (APS) system CMS implemented in December 2011.  The APS uses existing information from public and private sources to automatically and continuously verify information submitted on a provider’s Medicare enrollment application including licensure status Secretary to impose a temporary moratorium on newly enrolling providers or suppliers of a particular type or in certain geographic areas if necessary to prevent or combat fraud, waste, and abuse. 
  • Increased information sharing and coördination of investigations and enforcement among states, CMS, and its law enforcement partners at the Office of the Inspector General (OIG) and DOJ including the highly publicized activities of the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint effort between HHS and DOJ to fight health care fraud.
  • The power of CMS, in consultation with OIG, to suspend Medicare payments and require States to suspend Medicaid and SCHIP payments to providers or suppliers during the investigation of a credible allegation of fraud;
  • The deployment and use of the sophisticated data collection and mining technologies of CMS’ new Fraud Prevention System, which since June 30, 2011 has used advanced predictive modeling technology to screen all Medicare fee-for-service claims before payment and target investigative resources on areas that this profile identifies as reflecting heightened risks of health care fraud vulnerability to allow regulators and prosecutors to more efficiently identify and respond to suspected fraudulent claims and emerging trends;
  • Focused fraud prevention, detection and enforcement activities on Home Health agencies, Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) suppliers and certain other categories of providers and suppliers that federal officials view as historically presenting heightened concerns;
  • Expansion of the overpayment detection and recovery activities ofthe Recovery Audit Contractor (RAC) program to Medicaid, Medicare Advantage, and Medicare Part D programs; and
  • Various other tools.

Health Plan Partnership Latest Wrinkle In Fed’s Efforts To Use Private Whistleblower & Other Resources To Find Fraud

The partnership with the health plans is the latest wrinkle in a growing network of private relationships and outreach that HHS and DOJ use to discover health care fraud.  By partnering with health plans, HHS and DOJ have recruited the health plans to help federal officials find and redress potential fraud in public and private health plans. 

HHS and DOJ already know the value of getting private citizens to watch for and report suspected illegal behavior.  Indeed, expended qui tam and other whistleblower activities already are paying off big for federal officials.  For example, a former executive’s qui tam claim helped bring about the settlement announced in June, 2012 under which Christus Spohn Health System Corporation recently  paid more than $5 million to settle Justice Departmentclaims that it profited from violations of the False Claims Act by inappropriately admitted patients to inpatient status for outpatient procedures.  The investigation leading to the settlement began in March 2008 after Christus – Shoreline’s former director of case management filed a lawsuit under seal under the qui tam provisions of the False Claims Act alleging the six hospitals were submitting false claims to the Medicare program by billing for services that should have been performed on an outpatient basis as if they were more expensive inpatient services. The allegations stated that these hospitals were routinely billing outpatient surgical procedures as if they required an inpatient level of care even though the patients often were discharged from the hospital in less than 24 hours.   The federal False Claims Act empowers private citizens with knowledge of fraud against the United States to present those allegations to the United States by bringing a lawsuit on behalf of the United States under seal. If the government’s investigation substantiates those allegations, then the private citizen is entitled to share in any recovery. In this case, that person will receive 20% of the $5,100,481.74 recovery.   

With qui tam and other reports of suspected fraud an increasingly frequent and valuable tool in the federal and state wars on health care fraud, officials have added a wide range of programs encouraging and in some cases financially rewarding individuals and businesses that report circumstances leading to fraud convictions.  The partnership with health plans reflects the latest wrinkle in these efforts.

Health Care Providers & Health Plans Must Act To Manage Risks

In response to the growing emphasis and effectiveness of Federal officials in investigating and taking action against health care providers and organizations, health care providers covered by federal false claims, referral, kickback and other health care fraud laws should consider auditing the adequacy of existing practices, tightening training, oversight and controls on billing and other regulated conduct, reaffirming their commitment to compliance to workforce members and constituents and taking other appropriate steps to help prevent, detect and timely redress health care fraud exposures within their organization and to position their organization to respond and defend against potential investigations or charges.  In light of the growing qui tam risks, health care providers also should tighten internal investigation, exit interview and other human resources and business partner oversight, reporting and investigation policies and practices to help find and redress potential fraud or other qui tam, retaliation and similar  exposures early and more effectively.  

For More Information Or Assistance

If you need help reviewing or responding to these or other health care related risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer, may be able to help. Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 24 years experience advising health industry clients about these and other matters. Her experience includes advising hospitals, nursing home, home health, rehabilitation and other health care providers and health industry clients to establish and administer compliance and risk management policies; prevent, conduct and investigate, and respond to peer review and other quality concerns; and to respond to Board of Medicine, Department of Aging & Disability, Drug Enforcement Agency, OCR Privacy and Civil Rights, HHS, DOD and other health care industry investigation, enforcement and other compliance, public policy, regulatory, staffing, and other operations and risk management concerns.

A popular lecturer and widely published author on health industry concerns, Ms. Stamer continuously advises health industry clients about compliance and internal controls, workforce and medical staff performance, quality, governance, reimbursement, and other risk management and operational matters. Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, technology, public policy, reimbursement and other operations and risk management concerns. Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.  You can get more information about her health industry experience here. If you need help responding to concerns about the matters discussed in this publication or other health care concerns, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or update, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

If you or someone else you know would like to receive future updates about developments on these and other concerns from Ms. Stamer, see here.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, compensation, data security and privacy, health care, insurance, and other key compliance, risk management, internal controls and other key operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources including:

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THE FOLLOWING DISCLAIMER IS INCLUDED TO COMPLY WITH AND IN RESPONSE TO U.S. TREASURY DEPARTMENT CIRCULAR 230 REGULATIONS.  ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, OR (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2012 Cynthia Marcotte Stamer, P.C. Non-exclusive license to republish granted to Solutions Law Press.  All other rights reserved.

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