Justice Department False Claims Act – Are You at Risk?

Justice Department False Claims Act – Are You at Risk?

As part of the False Claims Act lawsuit filed against a major insurance company, UnitedHealth Group, in 2011, the federal government is now also investigating other companies. Cigna, Bravo Health, Health net, Humana, and Aetna are also being investigated.

 

The Justice Department announced that it would join the suit against UnitedHealth, which was initiated by Benjamin Poehling, a former finance manager for UnitedHealth Medicare and Retirement. Poehling claims that the insurance company misrepresented the health status of many beneficiaries who had Medicare Advantage. This was done to receive higher reimbursement rates.

 

The Scheme and Money Recovered

 

There are many accusations that suggest payers knowingly overbill the Center for Medicare & Medicaid Services (CMS) by millions if not billions over the course of several years. This was done by using a scheme to manipulate claims data, which allowed higher payments from CMS through risk adjustment. CMS had a risk adjustment factor in many reimbursement plans. This allowed for $3,000 per year to the companies for each qualifying medical condition. Payers had only received a flat rate per beneficiary in previous years, regardless of health status. Payers supposedly submitted claims for conditions that patients did not have in order to receive the money.

 

The majority of money recovered via the False Claims Act is from the healthcare industry. In 2016 alone, $4.3 billion was recovered, and $2.5 billion came from healthcare. Pharmaceutical companies, provider organizations, and medical device manufacturers, rather than payers, were responsible for the majority of these recoveries. A 2013 Government Accountability Office report found that Medicare Advantage risk scores were 4.2% higher in 2010 than they should have been. This difference was due to the traditional fee-for-service Medicare offering no financial incentive regarding the beneficiary’s diagnoses.

 

Fraud and Abuse

 

The terms “abuse” and “fraud” are two distinct terms that have separate meanings relating to healthcare. Fraud is the intentional deception and/or misrepresentation of facts that results in unauthorized payment/benefit. Examples of fraud include falsifying medical records, misrepresenting dates, lying about frequency and duration of services rendered, and submitting claims for services not provided. Abuse is the actions that are improper, outside of acceptable standards, and inappropriate regarding standards of medical necessity.

 

With increased focus on healthcare expenses and costs, Medicare and Medicaid investigators are pursuing and prosecuting fraudulent and abusive activity more aggressively. Entities subject to investigation include private providers, hospitals, clinics, laboratories, durable medical equipment suppliers, and home health agencies. Private healthcare payers also use much money and resources to battle medical billing fraud. Because of the high alert and awareness, it is best to safeguard your medical facility.

 

Types of Medical Billing Fraud and Abuse

 

The types of medical billing abuse and fraud that affect the U.S. healthcare system include:

 

  • Upcoding – Submitting a claim for a service more severe than the one actually provided by the facility/doctor.
  • Cloning – Using the electronic health records system to generate a more detailed patient observation profile by using/copying one from another person’s file.
  • Phantom billing – Billing for services never provided.
  • Inflated hospital bills – Overcharges for procedures and/or equipment.
  • Service unbundling – Also called fragmentation, this involves billing for many procedures separately when they should be bundled together.
  • Repeat billing – Billing twice for the same supplies, medications, or procedures.
  • Self-referrals – When a provider refers a partner or themselves to perform a service.
  • Length of stay – Charging for days not in the provider facility.
  • Keystroke mistake – Entering incorrect codes that cause significant overcharges.
  • Cancelled service – Billing for a service that was cancelled.
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