​Health-care Fraud Is No Accident

Insurers, providers, and regulators all have much at stake in fighting false medical billing claims.

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​A South Florida man has pleaded guilty to racketeering charges stemming from a $23 million personal injury claim scheme, the Sun Sentinel reports. U.S. federal prosecutors say between 2010 and 2018 Felix Filenger paid kickbacks to body shop workers and tow truck drivers who referred accident victims to chiropractic clinics he secretly owned. The clinics then billed auto insurance companies for 15 or more required visits. Additionally, clinic staff exaggerated pain levels to obtain the maximum benefit for emergency treatment allowed under Florida law. After raiding Filenger's offices in 2015, the Federal Bureau of Investigation used a wiretap to record him issuing orders to his co-conspirators. Filenger received a 6-and-a-half-year sentence in federal prison.

Lessons Learned

Health-care fraud and abuse cases cost the industry and taxpayers billions of dollars annually. More specifically, the U.S. Department of Health and Human Services' (HHS') Office of Inspector General (OIG) reported in February (PDF) that the chiropractic services sector showed significantly high levels of problems. The report is based on a review of program vulnerabilities identified in previous OIG audits, evaluations, investigations, and legal actions related to chiropractic services in the Medicare program. The report notes that the Centers for Medicare & Medicaid Services' (CMS') Comprehensive Error Rate Testing program, which measures inappropriate Medicare fee-for-service payments annually, identified chiropractic services as having the highest improper payment rates among Medicare Part B services from 2010 to 2015. Improper payment rates ranged from 43.9 percent to 54.1 percent, and the estimated overpayments per year ranged from $257 million to $304 million.

Providers face multiple challenges in preventing and detecting health-care fraud and abuse laws at the local, state, and federal levels. Complying with the myriad regulations can be difficult for providers who already focus on a range of priorities, including care delivery, payer compliance, medical billing, and revenue cycle management. So what more can be done?

First and foremost, the OIG report recommends:

"... that CMS implement our prior recommendations that remain unimplemented or have been implemented ineffectively. In addition, to further strengthen program integrity and facilitate the full implementation of our prior recommendations, CMS should:

  • Work with its contractors to educate chiropractors on the training materials that are available to them;
  • Educate beneficiaries on the types of chiropractic services that are covered by Medicare, inform them that massage and acupuncture services are not covered by Medicare, and encourage them to report to CMS chiropractors who are providing non-Medicare-covered services;
  • Identify chiropractors with aberrant billing patterns or high service-denial rates, select a statistically valid random sample of services provided by each chiropractor identified, review the medical records for the sampled services, estimate the amount overpaid to each chiropractor, and request that the chiropractors refund the amounts overpaid by Medicare; and
  • Establish a threshold for the number of chiropractic services beyond which medical review would be required for additional services."

This entire report is worth reading. To the measures it suggests, here are a few more targeted to Filenger's activities in this case:

  • Measures related to the education of chiropractors and beneficiariesalso should include the legislative requirements that must be followed. The U.S. False Claims Act provides incentives and protection for witnesses who report fraudulent activity. These measures should be better publicized.
  • Be aware of potentially increased fraud risks from "value-based" purchasing of health services. HHS has repeatedly reiterated its commitment to preventing health-care fraud and abuse. In 2017, the department stated that CMS implemented a proactive approach to fraud protection, eliminating its previous "pay-and-chase" method, which Filenger was able to exploit in this case. However, as value-based purchasing takes hold of the health-care industry, providers also are seeing claims reimbursement rates drop in favor of incentive payments. Efforts to maximize revenue may push some providers to engage in health-care fraud and abuse activities without necessarily intending to do so. Examples include failing to correct a billing clerk who assumes a provider performed specific services, billing for medications that the patient never picked up, and coordinating with other provider organizations under value-based agreements.
  • Work to prevent false medical bills. HHS, the CMS, and providers should use targeted risk assessments and predictive analytics to prevent false medical bills before providers receive payments. Also, they should continue increased efforts to screen providers for enrollment in federal health-care programs.
  • Target kickbacks and conflicts of interest. The U.S. Anti-Kickback Statute and Stark Law expose care providers who invest in other practices to increased risk of scrutiny. Authorities also should probe and question provider business relationships, such as the chiropractic clinics' relationships with the tow truck and body shop companies in this story. Settlements with pharmaceutical companies under the U.S. Affordable Care Act regulations have resulted in physician-industry transparency requirements, where medical drug, equipment, and biological companies must disclose all gifts to care providers. The Pharmaceutical Research and Manufacturers Association and the Advanced Medical Technology Association have created codes to guide care provider and manufacturer ethics. Still, more pressure and scrutiny of disclosure of conflicts of interest is needed.
Art Stewart
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About the Author



Art StewartArt Stewart<p>​Art Stewart is an independent management consultant with more than 35 years of experience in internal audit, financial management, performance measurement, governance, and strategic policy planning.​​​</p>https://iaonline.theiia.org/authors/Pages/Art-Stewart.aspx


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