Last month, 107 physicians, nurses and social workers nationwide were charged with fraudulently billing Medicare for $452 million. It was the largest, single raid to date with arrests occurring in seven major cities, but it is only the latest headline in Washington’s increasing war on fraud, abuse and waste within the healthcare system.
Jonell Beeler, a shareholder in the Jackson, Miss. office of Baker, Donelson Bearman, Caldwell & Berkowitz, PC, said she has seen a significant intensification in the enforcement landscape over the past decade. The attorney, who serves as co-leader of the law firm's Health Care Government Investigations Group and the Health Care Regulatory Task Force, said there is now a long list of government contractors who have the authority to audit pre-payment and post-payment claims of healthcare providers … and there is no sign of federal agencies backing off. In fact, those tasked with the crackdown continue to add new enforcement methodologies.
“Last summer, CMS initiated a predictive modeling technology,” said Beeler. “They rolled this out to detect fraudulent billing in real time.” She added, it is technology similar to what is used by credit card companies to identify potential fraud and abuse.
Beeler explained the Center for Medicare and Medicaid Services streams all fee-for-service claims through the predictive modeling tool to create identified risk profiles and provider scores to estimate the likelihood of abuse and flag potentially fraudulent claims or billing patterns. The collected information is then made available to contractors.
This new artificial intelligence technology is being used to proactively deny claims deemed improper on the front end. Whereas recovery audit contractors (RACs) mostly focus on ‘pay-and-chase’ audits to try to recover improper payments already made, predictive modeling is being used to alert other contractors, including Medicare administrative contractors (MACS) and zone program integrity contractors (ZPICs), to potentially fraudulent claims before CMS pays.
“It’s another tool in the arsenal of finding fraud,” said Beeler. She added, “There is a real need for the government to stop criminal activity, but there is a concern that honest providers can get caught up in this.”
The American Medical Association echoed those sentiments in a letter sent last August to Donald Berwick, MD, who was CMS administrator at that time. The letter, signed by James L. Madara, MD, executive vice president and CEO of AMA, stated, “As a general matter, we support the concept of a targeted, precise method to identify fraudulent activity, rather than overly burdensome program integrity requirements for all physicians.” Madara added CMS’ efforts to develop a seamless fraud detection method goes a long way toward meeting President Obama’s intent to streamline regulations as part of his administration’s Campaign to Cut Waste.
Still, the AMA raised a number of concerns about the program including a desire that improper payments unrelated to fraud not be targeted considering the number of RAC determinations overturned on appeal and that CMS not use this as a tool to waive prompt payments.
Another concern, Beeler said, is there is a complexity in billing and coding that might be difficult for an artificial intelligence tool to correctly recognize. “There may appear to be outliers in physician billing that are explainable,” she pointed out.
CMS officials, however, have said the technology is not being used to replace the expertise of its contractors but is only there to alert those contractors to areas of concern. Providers do not have the right to appeal their predictive modeling risk score but do have the same rights as always to appeal any action taken to recoup or deny payment.
The best way for providers to avoid the appearance of fraud or improper payment, noted Beeler, is to do a little predictive modeling of their own through self-audits and claims review.
“If they are billing legitimately, then the claims are appropriate,” she said, adding that even that might not be protection enough without detailed records. “If they don’t properly document their files — their medical records — then once they are under the microscope, they need to know everything is going to be under review,” she warned of an external audit.
Beeler suggested a quarterly review of the claims submission process and supporting documentation so that providers keep tabs throughout the year of how their internal procedures are working. She added that if such a review turns up an overpayment, then the provider must report and return the identified overpayment within 60 days.
“Congress enacted the Patient Protection and Affordable Care Act which now puts the burden on the provider to return overpayments and increases the penalty for failing to do that by making it a False Claims Act violation,” Beeler stated. She added that in addition to civil penalties, CMS could ultimately exclude a provider from the program.
“As an attorney, I tell my clients that healthcare providers should be proactive. They should know what the government is looking for and audit and monitor their billing practices and take corrective action accordingly. They should not be waiting for the government to knock on their door … it’s too costly.”