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Healthcare Fraud, Waste and Abuse

 

Unfortunately, today the U.S. government struggles to maintain control on healthcare fraud, waste, and abuse. As it stands, it is estimated billions of dollars are lost yearly due to healthcare related fraudulent schemes and kickback or bribe violations. Sadly, government enforcement efforts against fraud, waste, and abuse currently target all healthcare professions, including nurses, pharmacists, dentists, physicians, pharmacy and clinic owners, hospitals, their contractors, subcontractors, mental health care facilities and the list goes on.

Perhaps one of the most important ways a healthcare professional can assist in alleviating this crisis is by firmly committing to abide by the code of ethical conduct. Additionally, by maintaining knowledge of relevant rules and regulations through required regular training. Lastly, by realizing that the consequences of deviating from honorable behavior are serious and can be life altering.

Nevertheless, despite having clearly defined what is deemed illegal, in the form of legislation, government agencies continue to find themselves actively combatting fraud, waste, and abuse.  In their relentless battle, one of the most effective tools included in their arsenal is asking for your help in preventing, detecting, and reporting fraud, waste, and abuse. In the upcoming slides, we will discuss the extent of the problem and what you can do in support of this plight.

Centers for Medicare & Medicaid Services (CMS)

Directly within the U.S Department of Health and Human Services, the Centers for Medicare and Medicaid services (CMS) is the administrative agency for the government funded insurers, Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). In the past eight years, it has expanded to also include the ACA marketplace for state and federal healthcare insurers. As a healthcare provider, it is essential to be familiar with each insurance and their eligible enrollees.

Enrollment eligibility and plan specifics

Medicare: a taxpayer funded insurance offered to those 65 and older, people with disabilities and those with diagnosed end-stage diseases. Participants must have contributed through the payroll tax fund.      

  • Medicare Part A covers skilled nursing, inpatient hospital, home health care and hospice care.
  • Medicare Part B covers preventive care, physicians, outpatient services, laboratory charges, and miscellaneous fees.
  • Medicare Part C also known as Medicare Advantage (MA) covers a combination of both A and B fees. 
  • Medicare Part D includes benefits for drugs and prescriptions.

Medicaid: is a jointly state and federal administrated insurance program for those of any age designated with an indigent and/or low-income status. Other eligible groups include children, qualified pregnant women and anyone that is receiving supplemental security income. Determination of additional eligibility requirements is reserved to each individual state. The benefits include coverage for both inpatient and outpatient services, physician care, home health, laboratory and x-rays, and prescriptions drugs, along with other covered categories.

Children’s Health Insurance Program (CHIP): enrollment is granted to children that are less than 19 years of age, those who do not qualify for Medicaid and those whose parents are not able to afford regular insurance. Benefit coverage can vary from state to state. Certain states charge a co-pay for some services, a monthly premium may be required, or covered services can be free of charge. Among the benefits included are preventive care like vaccinations and annual physicals, physician visits, hospital, vision, dental, laboratory and x-ray fees, emergency services and prescription drugs. 

Programs under the Affordable Healthcare Plan: enrollment is open to anyone that finds themselves without insurance due to a job disruption, no coverage through employer, or is seeking new coverage. Benefits vary depending on the plan selected. Several plans consist of low premiums, high deductibles, with minimum allowable coverage. Other plans demand high premiums with decent deductibles for standard benefits.

As of September 2020, there were approximately 50 million enrollees in the Medicare program and over 77 million people enrolled under the Medicaid/CHIP insurance. Clearly, a substantial number of individuals are covered under CMS sponsored plans and collectively constitute a large section of the national population.

For any healthcare provider to be competitive and successful, it must register to provide services to CMS program members. To participate in these plans, a health service provider must abide by laws and regulations designed to encourage proper billing practices and reduce fraud, waste, and abuse.

What is Fraud, Waste and Abuse

The dictionary meaning of fraud is “- deceit, trickery. Intentional perversion of truth in order to induce another to part with something of value…An act of deceiving or misrepresenting” more explicitly, making false claims. 

Under CMS guidelines, Medicare fraud, waste and abuse are considered legal terminology which are applicable to law. The meaning of these specific terms includes but is not limited to the following:

Fraud – Intent, knowledge and misrepresentation are the main elements in the CMS definition of fraud. Below are actual examples.

  • To knowingly and intentionally deceive or misrepresent by submitting false claims for the purpose of receiving an unearned, unauthorized payment where entitlement does not exist. 
  • To knowingly offer, pay, solicit, or receive bribes, kickbacks, or rebates in order to promote or reward the referral of services or products normally covered by a federal healthcare plan.
  • To knowingly falsify records to charge for supplies or services not provided.
  • To knowingly bill for medically unnecessary services, equipment, or drugs.
  • To pay for or receive payments for referrals of patients covered under federal healthcare plans.

Waste: is the excessive use of services that lead to needless cost while improperly using plan benefits and resources. It is usually not considered as having been caused by criminally negligent actions. Although like with fraud and abuse, losses to the program can be significant.

Abuse: Are actions that may either directly or indirectly end in needless cost to the Medicare Plan. It can include any practices that fail to provide patients specific medically necessary services or activities that reduce the quality of the standard of care.

Examples include:

  • Charging for services or drugs that were not needed.
  • Billing excessive fees for supplies, drugs, equipment, or services.
  • Mislabeling services, drugs, supplies, or equipment to collect a higher fee.
  • To differentiate between fraud and abuse, investigators consider intent, knowledge, and the details of each specific instance to prosecute their case. Willful intent and knowledge are required to consider a charge of fraud.

Pharmacy Specific Examples of Fraud, Waste and Abuse

 

Below are some of the instances considered fraud, waste, and abuse in a pharmacy setting.

 

  • Dispensing of returned, expired, or damaged drugs.
  • Dispensing a lesser quantity and billing for a full quantity.
  • Filling prescriptions that have been forged.
  • Filling prescriptions that were altered without verifying with the prescriber.
  • Submitting a claim to government funded plans for non-covered items.
  • Submitting a duplicate claim to government funded plans for the exact same charges.
  • Submitting a claim to government funded plans for medically unnecessary services such as non-recommended, age-inappropriate vaccinations.
  • Charging an excessive fee for services, drugs, or equipment.
  • Mislabeling or misrepresenting on forms or receipts to obtain a greater amount of payment.
  • Billing for products, services, or drugs that the patient did not receive.
  • Billing dual payer (government plan & secondary) accounts incorrectly.
  • Dispensing a generic but charging for a brand.
  • Charging for a prescription that was never picked up (not reversed from “ready” bin).
  • Using the dispense as written (DAW) code improperly.
  • Splitting a prescription to collect two dispensing fees.
  • Employing a “bait and switch” tactic (when a Medicare patient is told one drug price at drop off but is asked to pay a higher cost at pick up).
  • Causing TrOOP manipulation, which is when a pharmacy modifies the true out of pocket amount to help a member over the coverage gap in order to receive the catastrophic coverage before true eligibility. 

Fraud, waste, and abuse violations can lead to civil and criminal accountability, which may include negative consequences for the program beneficiaries, health organizations and individuals.   

Check your knowledge Question & Scenario 1 

Check your knowledge Question & Scenario 1 – Answers

Government Agencies that Combat Fraud, Waste and Abuse

 

These interconnected government organizations are the primary agencies responsible for creating and enforcing rules and regulations to prevent the defrauding of governmental and private insurance programs. Separate and joint efforts by agents within these agencies like analysts, auditors, traditional investigators and evaluators are continuously carried out to ensure compliance by all providers.

  • The U.S. Department of Health and Human Services (HHS)
  • The Centers for Medicare and Medicaid Services (CMS)
  • The U.S. Department of Justice (DOJ)
  • The Office of Inspector General (OIG)
  • Offices of the State Attorney General
  • Federal Bureau of Investigations (FBI)
  • Local Law enforcement agencies

 

Combined Efforts to Combat Fraud, Waste and Abuse

The agencies listed in the previous slide, work individually to fight fraud, waste, and abuse. They also participate in coordinated efforts to stop, apprehend, and prosecute those defrauding the government and private insurers, often recovering millions. Their special task force teams are listed below. Together with the support of local law enforcement agencies they are able to maximize use of their resources to successfully complete investigations.

Health Care Fraud Prevention and Enforcement Action Team (HEAT) – is a collaborative effort by the Department of Health and Human Services, the Department of Justice and the Office of Inspector General to fight health care fraud. This resourceful tool came about following legislation originated from the national​Health Care Fraud and Abuse Control Program (HCFAC), which passed under the Health Insurance Portability and Accountability ACT (HIPAA) of 1996. This is the law which extended fraud protections to include the private insurance sector in addition to the public programs. 

Additional Support

Medicare Fraud Strike Force –

is a group assembled from representatives of some of the previously listed agencies working as a team to coordinate resources for the purpose of identifying and prosecuting fraud, waste, and abuse. There are approximately fourteen strike teams currently stationed in certain major cities around the United States which include Miami, Florida; Los Angeles, California; Houston, Texas; New York City, New York, and Washington DC.

Medicaid Fraud Control Unit –

is a team from different agencies formed for the purpose of detecting and prosecuting Medicaid fraud, waste, and abuse. There are currently 53 in the nation, one for each state, plus one for the U.S. Virgin Islands, Puerto Rico, and Washington DC.

All of these special teams play a crucial part in defending the integrity of both the public and private sectors of insurers and in confronting the challenges against healthcare fraud. They need everybody’s commitment to prevent, identify and help correct fraud.

Established Laws and Regulations against FWA

Besides joining forces and working together to confront fraudulent scams, the previously mentioned agencies have the authority to enact laws and regulations to help prevent potential dishonest practices. Listed below are some of the anti-fraud legislations in effect today. Each clearly specifies what would be considered an infraction. Every health care professional should be familiar with these laws.

Laws and Regulations

  • The Federal False Claims Act
  • Health Insurance Portability and Accountability Act (HIPAA)
  • The Anti-Kickback Statue
  • Physician Self-Referral Prohibition (Stark Law)
  • Civil Monetary Penalties Law
  • Whistleblower Protection Act 
  • Exclusion Statue

 

The Federal False Claims Act (FCA)

The federal False Claims Act, also known as Lincoln’s law, was enacted in 1863. It was in response to attempts by wrongdoers to defraud the government by collecting payment for flawed merchandise during the Civil War. Generally, for the purpose of this discussion, it applies to false claims submitted to federally funded government programs. Since it first came out, this law has been modified to include several amendments. The relevant sections to this lesson have been highlighted below.

Violations Under the False Claims Act Include

  • When a provider or individual knowingly (or should have known) submits a false claim for reimbursement from a federal plan.
  • If this provider or individual knowingly (or should have known) creates false records or makes fake statements to help get a false claim approved or paid by the federal government.
  • If this organization or individual keeps payments from the government to which they were not entitled to by making false records or statements.

 

Consequences and Penalties under the False Claims Law

  • For each false claim submitted, an individual or organization may be liable to three times the damages and penalties (between $5500 and $11000) for each claim.
  • Violators are also subject to be listed on the Exclusion list preventing them from participation as providers in any federal funded programs.

 

Note: States have their own laws modeled after the federal False Claims Act.

Check Your Knowledge Question & Scenario 2

Check Your Knowledge Question & Scenario 2 – Answers

Examples of Violations Under the False Claims Act (FCA)

 

Reminder: The requirement under the law is that the offender “knew” that this was an offense or “should have known”.

  • A healthcare provider, such as a physician or pharmacist, that bills Medicare for products or services that were not rendered.
  • A pharmacist mislabeling billing charges of excluded, normally noncovered items to collect insurance payment.
  • A pharmacy technician that does not confirm the identity of the Medicare cardholder and bills Medicare for wrongful charges due to medical identity theft.
  • A contractor that falsifies records to cover up non-compliance of regulations to pass an audit.
  • A pharmacist inserting when prompted, an invalid, unauthorized diagnosis code to receive payment for diabetic supplies or respiratory treatment equipment.
  • A pharmacist files for reimbursement from Medicare for a prescription written by a physician which has been excluded from participating in the federally funded insurance program.

 

The Health Insurance Portability and Accountability Act (HIPAA)

Besides providing protections for the security and the privacy of protected health information, this law includes specific provisions to help combat fraud, waste, and abuse. HIPAA also formed the Health Care Fraud and Abuse Control (HCFAC) program which allowed for the collaboration of multiple agencies in joint anti-fraud efforts and addressed the need for protecting private plans against insurance fraud.

Main Allowances under Health Care Fraud and Abuse Control (HCFAC)

  • Expanded the scope of covered entities to include private insurances in addition to the already existing protections for public government funded programs.
  • Created a new designation of crimes, “health care fraud”. Making it illegal for anyone to defraud any health care benefit plan.
  • Extended the exclusion authority to mandate that a fraud conviction under any plan (public or private) would result in automatic addition to the Exclusion List.
  • Allowed for the collaborative anti-fraud efforts of the Attorney General and Office of the Inspector General to combine resources to combat all types of fraud against health care programs.

The Anti-Kickback Statue

 

This law, the federal Anti-Kickback Statue, was intended to address the referral for profit scheme. At the time, a law was needed to prevent individuals or groups from profiting for referring a patient with the purpose of gain instead of for true medical need. According to the Centers for Medicare & Medicaid Services (CMS), if unchecked, these unlawful kickbacks lead to the higher cost and overuse of health care services, improper medical decisions, and the delivery of unfair, uncompetitive medical treatment.

Violations Under the Anti-Kickback Statue (AKS) Include:

  • Prohibits anyone from “knowingly or willingly” soliciting, receiving, paying, or offering any form of direct or indirect payment for the referrals of patients to a provider for services covered under a government funded program.
  • Explains that compensation also refers to any form of payment other than monetary, such as, free rent, free restaurant meals or hotel stays, and even receiving excessive consulting fees.
  • Forbids the exchange of bribes or any other form of valuables for recommending products such as drugs or supplies considered formulary (covered) under the Medicare or Medicaid programs.

Consequences and Penalties Under the Anti-Kickback Law

The Anti-Kickback Law and the Physician Self-Referral Prohibition (Stark Law) are similar in that they both involve violations due to some type of referral. One of the main differences between these two laws is that the Physician Self-Referral Prohibition (Stark Law) is considered a civil offense punishable by civil penalties. On the other hand, the Anti-Kickback Statue is both a criminal and civil offense and includes fines and possible jail time.

Criminal

  • There are monetary fines up to $25,000. per violation.
  • A possible five-year prison term following a conviction.

Civil

  • A possible $50,000 per violation.
  • Civil assessment of three times the kickback amount.
  • Exclusion from the federal healthcare programs which include Medicare/Medicaid.
  • Possibility of cumulative punishment under the False Claims Act if offenses overlap.

 As with the other laws, violations result in serious consequences. It is imperative to remain informed and be aware of exactly what may constitute a breach of each law.  

Check Your Knowledge Question & Scenario 3

 

Check Your Knowledge Question & Scenario 3 – Answers​

 

Examples of Violations Under the Anti-Kickback Law

  

  • An independent pharmacist that does not charge Medicare co-pays to entice the Medicare beneficiaries to fill prescriptions at her pharmacy.
  • A pharmacy that recommends a certain Medicare Part D plan because of a more favorable contractual agreement with them.
  • A pharmacy receiving “special payments” from a supplier to increase the order of Medicare Part B supplies.
  • A pharmacist receiving free frequent mile credits from a drug manufacturer for recommending their brand name.
  • A pharmacy that pays a physician a fee for referring patients to their pharmacy.
  • A drug company that compensates a physician for prescribing their brand or generic version of a drug.
  • A pharmacy that rents office space from a physician at above fair market price.

The Anti-kickback Statue does contain a safe harbor clause. Meaning, in certain instances, financial relationships between health care providers may exist. Due to the complexity of this part of the law, interpretation is best left to the legal specialists. When in doubt, it is always best to consult a practicing attorney within this area of expertise.

The Physician Self-Referral Prohibition (Stark Law)

The Stark Law prohibits the referral of Medicare/Medicaid recipients to a health care provider or health care entity that the physician (or the physician’s family member) has a financial relationship with unless the circumstances fall under the safe harbor exceptions. Basically, it forbids doctors from using patients for their own financial gain. Although both sides will be equally prosecuted for violating this law, it does require that one of the involved parties be a physician or relation. In addition, it prohibits the second entity from requesting payment from Medicare or Medicaid for services that had resulted from the prohibited referral. As stated before, violations under the Stark Law constitute a civil offense and are therefore punishable under civil penalties.

Consequences and Penalties under the Stark Law

  • The convicted offenders will be obligated to return any payments/overpayments resulting from the prohibited referral.
  • Penalties under the False Claim Act if the offenses meet criteria.
  • Possible $15,000 fine for each violation
  • A civil assessment of three times the amount in question.
  • Convicted providers to be listed under the Exclusion List.

 

Other Fraud Related Legislature

 

Civil Monetary Penalties Law – this law covers against a wide range of fraudulent claims or violations involving abuse in claims and billing. As in the False Claims Act, it prohibits improperly filed claims containing invalid or misrepresentations to seek reimbursement from government funded plans. This law also covers instances where valid licensing is in question. As in services rendered by a professional whose license was obtained through fraudulent means. As well as anything ordered by a physician whose name is found on the Exclusion List whose prescribed products or services are therefore not entitled to reimbursement from the program. Includes monetary penalties for violations and results in being listed on the Exclusion List.

Criminal Health Care Fraud Statue – this statue prohibits knowingly or willfully devising an artifice or scheme designed to defraud any health care insurance plan. Furthermore, it prohibits the acquisition, through false claims and misrepresentations, of money or property owned or in the custody of a health care insurance plan. Language against any and all fake or fabricated claims related to the delivery of or payment for health care benefits of products or services is also included. Consequences of offenses include both monetary penalties and prison time.

Ways Consumers May Knowingly/Unknowingly Contribute to Fraud

 

Multiple Doctors – Patients visit multiple physicians for the same ailments resulting in overlapping of similar treatments including polypharmacy. The intentional act of doctor shopping involves individuals dedicated to collecting multiple prescriptions for narcotic pain killers and other controlled substances for the purpose of abuse or resale in the illegal market.

Unauthorized use of an insurance card – Can happen when either a family or friend allows an individual to use their insurance card to claim payment from the insurance even though they are not listed as a covered person. Unauthorized use can also occur when the insurance card was obtained by theft. In either instance, the insurance company has not authorized its use and it therefore constitutes fraud.

Inappropriate Use and/or Diversion of Drugs – Patients visit a doctor for an ailment from which they really do not have. They purchase the prescribed medication and sell or give it to somebody else. Additionally, failing to properly secure medications to avoid use or theft from someone within their household, also falls into this category.

Altered or Forged Prescription – Patients handwrite in more refills or double the dose of the drug on their prescription to get a stronger medication. In some instances, they take the doctor’s prescription pad and write their own prescriptions.

False Report of Loss – A person reports their medication lost or stolen in order to obtain a second supply for the purpose of selling the drug in the black market. Even if the intent is just to obtain a greater quantity to stockpile when the physician did not allow refills.

In each instance, the consumer intentionally or unintentionally caused some form of fraud, waste, or abuse. This is why the ‘facts against fraud’ campaigns must include specific information directed at the public, or insurance members. As well as why extra efforts by the providers are needed to detect potential irregularities. Always use professional judgement if this type of activity is suspected and consult with your supervisor.

Check Your Knowledge Question & Scenario 4

Check Your Knowledge Question & Scenario 4 – Answers ​

The Centers for Medicare and Medicaid Services (CMS) Role

As established earlier, the Centers for Medicare and Medicaid Services (CMS), under the direction of the Department of Health and Human Services (HHS) is responsible for the administration of Medicare, Medicaid, the Children’s Health Insurance Program plus the state and federal health care marketplace insurers. The main functions of the agency include, to gather facts and statistics, publish its research results in healthcare, along with setting forth strong efforts against fraud and abuse within the health care system.

Part of its administrative duties is to provide guidelines and set forth requirements for providers that wish to participate in the federally funded programs. Besides the standard qualifications and application process, all providers must abide by rules that assist the agency in combatting fraud, waste, and abuse.

As established earlier, the Centers for Medicare and Medicaid Services (CMS), under the direction of the Department of Health and Human Services (HHS) is responsible for the administration of Medicare, Medicaid, the Children’s Health Insurance Program plus the state and federal health care marketplace insurers. The main functions of the agency include, to gather facts and statistics, publish its research results in healthcare, along with setting forth strong efforts against fraud and abuse within the health care system.

Part of its administrative duties is to provide guidelines and set forth requirements for providers that wish to participate in the federally funded programs. Besides the standard qualifications and application process, all providers must abide by rules that assist the agency in combatting fraud, waste, and abuse.

Requirement for Participation in Government funded Programs

In order for a provider to remain eligible to participate in the government funded plans, the provider must have a compliance program to help fight fraud that follows the guidelines set by CMS. The compliance program must include a training course to be presented to all employees that work within the organization. Each individual is required to demonstrate comprehension of the facts presented and confirm acknowledgement of having received the information given. The key requirement is to have the compliance course completed within 90 days of hire, and annually thereafter. This will ensure employees have continuous education on what is necessary to prevent fraud, waste, and abuse.

The CMS guidelines state that the compliance program must be comprised of 7 central elements. These core requirements encompass prevention of deceitful practices and cover methods to identify and rectify them within the company. All seven components are essential in the constant battle against fraud and abuse. The ultimate goal of CMS is to lay the foundation for providers to educate their employees by preparing them to recognize and report fraud.

Definitions for Contracted Entities

The requirement of routine compliance program training extends to provider’s employees, governing agents, and affiliated partners. CMS further defines the potential relationships that can exist between providers and other third parties included in the training program mandate.

First Tier – any organization under a CMS approved contractual agreement with a Medicare Advantage organization or Medicare Part D sponsor that provides administrative or health services for a Medicare eligible person.

Downstream – a party, under a CMS approved contractual agreement, that enters the chain below the Medicare Advantage/Medicare Part D plan sponsor – first tier relation to furnish health or administrative services to an individual covered under the Medicare program.

Related Entity – this is the entity that falls under the same ownership or governing body as a Medicare Advantage/Medicare Part D plan sponsor. Usually, it is contracted to perform the managing duties of the plan sponsor, as well as provide other services for plan members. Additionally, it identifies the entity that would lease or sell real estate property at a higher cost than $2500 within a contract term to a Medicare Advantage Organization or Part D plan sponsor.

 Note: Collectively, CMS refers to these three groups as FDR.

Creating an Effective Compliance Program

The message should be clear. The company must state their unequivocal commitment to maintain legal and ethical practices. They must give direction on how to manage questions and concerns regarding fraud within their institution. Moreover, they must give guidance as to how to detect violations, while having rules in place to help prevent, identify, and correct fraud, waste, and abuse. The compliance program must be customized to fit the individual company’s own operating practices and encourage its high standards of ethical conduct. Most importantly, it must provide a reasonable reporting system that can facilitate disclosing compliance program violations.

The 7 elements for an approved compliance program are the minimum requirements to help prevent violations in both fraud and abuse and non-compliance of program rules and regulations. The reporting system allows for both types of offenses to be communicated. Reporting non-compliance of program rules is equally as important as reporting fraudulent practices since both lead to a high risk of revenue loss for the program.

List of Seven Core Elements for a Compliance Program

For a provider compliance program to meet expectations, it must contain the seven key requirements established by the Centers for Medicare and Medicaid Services (CMS). Below is the list of these requirements. Each will be discussed individually in the upcoming slides.

Seven Core Elements for a Compliance Program Explained

Written policies and procedures – The company (provider) must develop and distribute to entire workforce, the expected standards of conduct. These guidelines should include the organization’s commitment to follow the law, state conduct expectations, and communicate the potential consequences for disregarding the rules. The written procedures must include the requirements from both federal and state sources.

Senior management level oversight – The company is to form a committee to manage and monitor the compliance program. Additionally, they must appoint a compliance officer with the authority to oversee the program and share with the committee, the responsibility and accountability of its activities.

Appropriate compliance program – The organization is required to design an appropriate compliance training program for all employees. The basic message would be to help prevent, detect, and correct fraud, waste, and abuse. Procedures for reporting offences should be included. Tailoring the education activity to match the employee’s job functions is encouraged.

System of communication – The organization must have clear lines of communication. There should be a definite path for employees to report incidents of non-compliance anonymously, if preferred. All contact information for internal and external reporting systems must be provided to employees.

Publish potential disciplinary actions for violations – The provider must state its commitment to enforce the compliance program and express in writing the possible outcome for any violations. All employees must be made aware of the potential consequences and be held accountable for any offenses.

Efficient oversight system – The organization must maintain an efficient approach to regular monitoring, auditing, and detecting compliance threats. By performing continuous evaluations of active mitigating plans it can quickly identify problem areas.

Response and corrective action planning – The company must have a response plan to address any identified violations. The elements recommended to be addressed would be how to prevent, report and rectify any issues found.

Other Recommendations

Recommendations for maintaining an approved compliance program include:

  • Always keep compliance planning in high priority. This could help avoid millions of dollars in preventable losses.
  • Evaluate fraud vulnerable areas of the organization to reduce risk.
  • Do not assume a practice is legal just because a competitor is doing it.
  • Regularly review financial relationships with other healthcare providers to ensure consistent compliance.
  • When there is a doubt, contact the proper agencies for assistance.
  •  

The Centers for Medicare and Medicaid Services (CMS) has written and video sources available to help providers create their own compliance program. They also specify exactly which personnel is required to complete the compliance course. This and other valuable information can be found on their website, CMS.gov. Additional resources will be listed in an upcoming slide.

Check Your Knowledge Question & Scenario 5

Check Your Knowledge Question & Scenario 5 – Answers ​

 Published Consequences for Non-compliance 

CMS expects all program contractors to maintain a detailed and readily available list of the employee disciplinary standards for non-compliance offenses. The list should include but is not limited to:

  • Compulsory training or re-training of compliance rules and regulations
  • Any mandatory corrective actions for non-compliant behavior
  • Termination of employment for excessive or critical non-compliance

 

 As far as CMS consequences for an organization that is found to be out of compliance with the requirements, the following sanctions apply:

  • Civil monetary penalties
  • Criminal penalties
  • Suspension of contract with the sponsor
  • Expulsion from participation in the program
  • Registration on the Exclusion List

Reporting Fraud, Waste and Abuse

 

All reports made in good faith are encouraged. Employees can start the reporting process within their own company and can escalate to the Medicare sponsor if necessary. CMS mandates that reporting communication avenues should allow for anonymity, confidentiality, and be non-retaliatory.

First-Tier, Downstream and Related Entity (FDR) employees of an approved provider should have the reporting option to:

  • Speak to a supervisor or someone in upper management.
  • Be able to contact the Medicare compliance officer within their own company directly either by phone or email.
  • Make an on-line report through the company’s website.
  • Contact the company’s ethics/compliance Hotline.
  • Contact the sponsor’s compliance Hotline or customer support.
  • Contact the sponsor through their website.
  • Contact Medicare through their 1-800-Medicare line. 

 Reporting Fraud, Waste and Abuse – cont.  

The Whistleblower Protection Act

 

An individual that uncovers fraud or violations of the compliance program, and reports it to the proper authorities, is known as a whistleblower. At times, these people are risking their jobs, their income, and possibly the future of their careers. This is why the legislature introduced the Whistleblower Protection Act, to support the decision of federal employees to expose acts that defraud the government. Besides protections against retaliation, it contains incentives for individuals to come forward to report instances of fraud, waste, or abuse.

Provisions under the Whistleblower Act

  • Protects federal employees from any loss of job, position, or wages, arising from retaliatory action for disclosing fraudulent acts against employer.
  • Shields against discrimination, harassment, demotion, or termination of any federal employee working with federal agents on a False Claim case.
  • Clarifies policies and procedures to disclose misconduct.
  • Provides a pathway for reporting retaliation instances.

Note: Strong whistleblower protections for non-government employees are found in the False Claim Act.

Whistleblower Protections Under the False Claim Act

Whistleblowers play a vital role in recovering losses due to fraud for the U.S. government. Some of the strongest whistleblower protections are found in the False Claims Act. This law protects any individual or non-government entity when reporting and filing a case against fraud or abuse on behalf of the U.S government. The whistleblower provisions are found in the qui tam section of the law and state as follows:

  • Anyone can file a false claim case, including non-citizens.
  • Protects against discrimination, harassment, termination of employment for filing a claim.
  • Protections are applicable to both criminal and civil False Claim cases.
  • Whistleblowers are entitled to a reward for exposing the fraud, typically 15% to 30% of the recovered amount.
  • Whistleblowers are allowed reimbursement for attorney’s fees and other filing charges.
  • Whistleblowers are entitled to recover, if lost through retaliation, their job, lost wages, plus any other loss related to their false claim case.

Note: If anyone files a case for unfounded charges, and the court later determines it to be frivolous, the individual will be subject to fines and penalties, paying attorney’s fees and covering other court expenses.  

Comparison: Disciplinary Actions and Penalties for FWA violations

 

Note: All professional license holders face potential license suspension or revocation from their respective State Boards. 

The Exclusion Statue

 

The Exclusion Statue is a law that prohibits an individual provider or organization from providing services, supplies, or drugs to federally funded healthcare program participants for reimbursement. To be listed on the exclusion list, an entity or person may have been convicted of the following:

To be listed on the Exclusion List is a serious penalty for a healthcare professional. Most healthcare employers participate in government funded plans and perform Exclusion List screenings prior to hiring. For the most part, an employer would not be able to hire someone listed on the Exclusion List. This is why it is so crucial to remain focused to avoid unintentional as well as intentional acts that may result in being recorded on the list.

Registration on the Exclusion List could be a temporary penalty levied by the Office of Inspector General. At the conclusion of the term imposed, a listee has the right to request to be removed from the Exclusion List. This is not an automatic process and must be initiated by the excluded provider. Future reinstatement for participation in federally funded programs for previously excluded providers, will be subject to approval.

As intended, the Exclusion List is another effective tool the government uses to prevent fraud, waste, and abuse. It is managed by the Office of Inspector General and is called the List of Excluded Individuals/Entities (LEIE). Currently there are thousands of providers listed on the Exclusion List, preventing them from becoming repeat offenders. 

  

  • Felony or misdemeanor sentences for Medicare/Medicaid fraud
  • Crimes against patients such as lack of care or abuse
  • Other healthcare associated felony theft or fraud
  • Control substance related felony due to illegal production, delivery or dispensing of drugs
  • Providing needless or inadequate services
  • License revocation due to professional incompetence or lack of financial integrity
  • Presenting fraudulent charges to a government funded program
  • Accepting bribes or illegal payments in kickback agreements
  • Failure to pay a health education loan or comply with scholarship commitments

Check Your Knowledge Question & Scenario 6

 

Check Your Knowledge Question & Scenario 6 – Answers  

 

Record Retention and Attestation

Records

The Centers for Medicare and Medicaid Services (CMS) reserve the right to perform random and targeted audits to ensure all requirements are being met. All records pertaining to billing of products and services and any records relating to program compliance requirements must be easily accessible and maintained for a minimum of ten years. From time to time, records can be placed on a freeze. When providers are advised that a freeze of records is in place, records must be stored indefinitely until further notice.

 Attestation

Upon gaining employment by a provider that participates in government funded programs, all employees are responsible for completing, within 90 days of hire, the compliance training on Fraud, Waste and Abuse. An annual repeat of the course along with proof of completion is required to remain compliant.

Other Examples of Healthcare FWA

Acts of fraud can occur from any healthcare service providers. Some of the providers can be hospitals, physicians, pharmacies, pharmacists, prescription benefit managers (PBM) etc. Below are more examples of instances that constitute defrauding the government. All of which occurred as a result of sending a claim to Medicare or Medicaid or another insurer managed by CMS.

  

  • Hospitals grossly overcharging for medication, on a per pill basis.
  • Charging Medicare for an appointment that the patient did not attend.
  • Billing for a prescription that does not exist or was never ordered.
  • Modifying or doctoring claim forms, medical records, or transaction receipts to increase Medicare compensation.
  • Physicians ordering excessive laboratory or diagnostic testing.
  • Physicians requesting patients to come in for an excessive number of appointments.
  • Physicians writing for multiple prescriptions without it being medically necessary.
  • Billing for unnecessary medical services.
  • Excessive charging for drugs, services, or supplies.
  • Hospital, doctor, or pharmacy using the wrong diagnosis code.
  • A Pharmacy Benefit Manager (PBM) failing to offer the negotiated price to a plan member.
  • A PBM receiving kickbacks for manipulating a plan member to choose one drug or benefit plan over another.
  • Physicians billing Medicare for free samples they gave to their patients.
  • Manufacturers marketing inappropriately and offering Medicare plan recipients incentives to buy their drugs.
  • A pharmacist erroneously filling the prescription for more refills than doctor allowed due to a typing error.

Whether intentional or not, these incidents ultimately cause Medicare billions of dollars in loss. The amount of waste is great and affects all of us as taxpayers. Attempting to resolve suspicious activity is paramount, and something all should be committed to do.

  

Resources for More Information

These are websites that contain additional information about FWA and how to prevent, report and correct it.

Centers for Medicare and Medicaid Services (CMS) – Prescription Drug Benefit Manual ch.9 (FWA) – https://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovContra/Downloads/Chapter9.pdf

CMS/MLN Medicare Fraud and Abuse: Prevent, Detect and Report – https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/Fraud-Abuse-MLN4649244-Print-Friendly.pdf

CMS Medicaid Integrity Program – https://www.cms.gov/Medicare-Medicaid-Coordination/Fraud-Prevention/Medicaid-Integrity-Program

CMS – https://www.cms.gov

HHS/OIG – https://www.oig.hhs.gov

Note: Visit these sites for more details about FWA and how to help beat it.

Specific Actions A Pharmacist Can Take To Prevent FWA

 

Monitor Employee Activities

  • Confirm pharmacy staff has been properly trained to help fight Fraud, Waste and Abuse.
  • Make sure the entire pharmacy team is abiding by the rules and regulations under the compliance program.
  • Ensure all employees are asking for government issued identification when accepting a prescription and an insurance card.
  • Verify that Medicare reversals at pickup are being handled properly. If a customer with two prescriptions, refuses the first more expensive prescription, because it was applied to deductible, then the second prescription must be re-run on insurance following reversal of the first one.

Inform Patients

  • Warn patients against seeing several doctors. This could turn out to be dangerous. It is best to build a good rapport with one physician to facilitate communication and encourage a closer connection.
  • Advise patients that having various doctors leads to polypharmacy. Taking multiple drugs can result in therapeutic duplication. This can be considered wasteful because the insurance company may end up paying for two therapeutically equivalent drugs. Besides, it is considered unsafe because it can also increase the risk of harming the patient.

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Conclusion

 

Health care fraud is a serious problem. Billions of dollars in loss are attributed to fraud, waste and abuse each year. The Centers for Medicare and Medicaid Services, the Office of the Inspector General, the Department of Justice, and other regulating government agencies need your help to recognize, identify and report FWA.

Perhaps the best place to start is to always follow your institution’s code of conduct. This crucial step will ensure your commitment to adhere to the standards of ethics and professional behavior the company expects and has in place. You should pledge full compliance with not only the rules and regulations related to preventing fraud but also the regulations and laws that govern the healthcare professions, including those designed to protect the consumers, our patients.

The knowledge that reporting something questionable or unusual is mandatory, and that you are protected from retaliation, should facilitate the decision to come forward. If appropriate, it is best to report any suspicious activity to your supervisor first. If it does not result in the desired outcome, then you should pursue the other reporting options available. Together we can help the healthcare system overcome this overwhelming surge of fraudulent practices and help save money for the government and the taxpayers.

Cases #1, #2, and #3 from the DOJ – Justice News – For Peer Discussion
All defendants are innocent until proven guilty in a court of law.

There is no better way to learn than through application, in this instance, applying the knowledge learned to real events. The following three cases illustrate everything discussed in this course. Beginning with the actions to be avoided because they will be interpreted as fraud. Then in each case, you can see the agencies that collaborated to investigate and help bring those that violated the law to justice. Followed by the charges that were entered based on the laws broken. But most importantly, the stiff penalties faced for violating these laws.

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Possibly all this information may sound a little alarming. However, being completely aware of the potential negative consequences of our actions is sometimes the best deterrent. Subsequently, since there are several laws related to fraud, waste, and abuse, it is imperative to become familiar with all of them. Therefore, yearly training on this subject is both recommended and required. It should be mentioned that all  the information regarding the law included in this course was a condensed summary, you are encouraged to read them individually to gain a greater comprehension of each law.

 Case #1 from the DOJ – Justice News

Case #2 from the DOJ – Justice News​

Case #3 from the DOJ – Justice News 

 

Active Learning

By now it is clear that it is everyone’s responsibility to help prevent, detect, report and correct fraud, waste, and abuse. As previously shown, it can occur in the pharmacy in many ways, such as when a pharmacist fills a prescription that has been altered without checking with the physician. If a drug that had been appropriately separated and labeled unsellable is still dispensed to a patient. Even when a recurrent billing error under a government funded insurer’s account, affecting many members, remains unreported. All of these instances, whether intentional or not, can potentially constitute fraud and should be properly reported and investigated.

Although it is the pharmacist’s duty to report fraud, it is not always easy to do the right thing especially when it can have negative consequences that can affect your job, income, or the future of your career. Through the link below you can find an article that describes three cases involving whistleblower pharmacists. These three brave individuals whose internal reporting was repeatedly ignored and subsequently lost their jobs, experienced a surprising personal outcome. After they decided to take their complaints to a higher authority, they were able to help recover millions of dollars for the government subsidized insurers, the government agencies involved and the taxpayers who ultimately fund them.

https://www.uspharmacist.com/article/whistleblowing-pharmacists

References

 

  • Baird JS. Know the laws covering pharmacy-physician business relationships. America’s Pharmacist. January 2015:18,55. http://www.ncpa.co/issues/APJAN15-PharmacyLaw.pdf. Accessed March 6, 2020. 
  • Carpenter LA, Edgar Z, Dang C. Pharmacy waste, fraud, and abuse in health care reform. J Am Pharm Assoc (2003). 2011;51(2): e3-e16. 
  • Centers for Medicare and Medicaid services. Prescription Drug Benefit Manual. chapter 9—Part D Program to control fraud, Waste, and Abuse. Rev. July 27, 2012. Available at: https://www.cms.gov/PrescriptionDrugcovcontra/Downloads/
  • PDBManual_chapter9_fWA.pdf. Accessed March 15, 2021. 
  • Chen ZX, Hohmann L, Banjara B, Zhao Y, Diggs K, Westrick SC. Recommendations to protect patients and health care practices from Medicare and Medicaid fraud. J Am Pharm Assoc (2003). 2020 Nov-Dec;60(6):e60-e65. 
  • CMS.gov monthly contract and enrollment summary report. https://www.cms.gov/research-statistics-data-and-systemsstatistics-trends-and-reportsmcradvpartdenroldatamonthly/contract-summary-2020-09. Accessed March 18, 2021. 
  • Congressional Research Services. The Whistleblower Protection Act: An Overview. Mar 12, 2007. https://fas.org/sgp/crs/natsec/RL33918.pdf. Accessed March 23, 2021. 
  • Cornell Law School. 42 U.S. Code § 1320a–7a – Civil monetary penalties. 42 U.S. Code § 1320a–7a – Civil Monetary Penalties. https://www.law.cornell.edu/uscode/text/42/1320a-7a. Accessed March 21, 2021. 
  • DOJ. Pharmacist Charged in $4 Million Healthcare Fraud and Kickback Scheme. March 17, 2021. https://www.justice.gov/opa/pr/pharmacist-charged-4-million-health-care-fraud-and-kickback-scheme. Accessed March 26, 2021.DOJ. Pharmacy Owner and Accountant Indicted in $134M Health care Fraud Scheme. March 9, 2021. https://www.justice.gov/usao-sdtx/pr/pharmacy-owner-and-accountant-indicted-134m-health-care-fraud-scheme. Accessed March 26, 2021. 
  • DOJ. Pharmacy Owner and Pharmacist Charged in a scheme to bill insurance for medications not dispensed. October 1, 2020. https://www.justice.gov/usao-edmi/pr/pharmacy-owner-and-pharmacist-charged-scheme-bill-insurance-medications-not-dispensed-0. Accessed March 26, 2021. 
  • 2019 Estimated Improper Payment Rates for Centers for Medicare & Medicaid Services (CMS) Programs. https://www.cms.gov/newsroom/fact-sheets/2019-estimated-improper-payment-rates-centers-medicare-medicaid-services-cms-programs. Accessed March 18, 2021. 
  • Latner, A. Increasing Prosecutions of Pharmacists and Pharmacy Owners for Medicare Fraud. January 22, 2019. Available at: https://www.managedhealthcareconnect.com/content/increasing-prosecutions-pharmacists-and-pharmacy-owners-medicare-fraud. Accessed March 16, 2021. 
  • Medicaid Fraud Control Units. https://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu/. Accessed March 19, 2021. 
  • Medicare Fraud and Abuse: Prevent, Detect, Report. Available at: https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/Fraud-Abuse-MLN4649244.pdf. Accessed March 17, 2021. 
  • Medicare Part C & D General Compliance Training Web-Based Training Course. Available at: https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/MedCandDGenCompdownload.pdf Accessed March 15, 2021. 
  • Medicare Prescription Drug Benefit 2018 Contract Year https://www.cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovContra/Downloads/2018-Part-D-Application.pdf. Accessed March 18, 2021.
  • Medicare Fraud Strike Force. https://oig.hhs.gov/fraud/strike-force/. Accessed March 19, 2021 
  • Merriam-Webster Dictionary. https://www.merriam-webster.com/dictionary/dictionary. Accessed March 20, 2021. 
  • September 2020 Medicaid and CHIP Enrollment Data Highlights. https://www.medicaid.gov/medicaid/program-information/medicaid-and-chip-enrollment-data/report-highlights/index.html Accessed March 18, 2021. 
  • Staman, J. Healthcare Fraud and Abuse Laws Affecting Medicare and Medicaid: An Overview. Aug 10, 2010. https://www.adea.org/documents/Section1/(1.3.1)-Anti-Kickback-Statute.pdf. Accessed March 20, 2021. 
  • The False Claims Act: A Primer. April 22, 2011. https://www.justice.gov/sites/default/files/civil/legacy/2011/04/22/C-FRAUDS_FCA_Primer.pdf. Accessed March 20, 2021. 
  • The Health Care Fraud and Abuse Control Program Protects Consumers and Taxpayers by Combatting Health Care Fraud. January 18, 2017. https://www.cms.gov/newsroom/fact-sheets/health-care-fraud-and-abuse-control-program-protects-consumers-and-taxpayers-combating-health-care-0. Accessed March 19, 2021.
  • Vivian, JC. Whistleblowing Pharmacists. US Pharm. 2015;40(4):47-50. https://www.uspharmacist.com/article/whistleblowing-pharmacists. Accessed March 17, 2021.