AvMed Health Plans

Fraud, Waste and Abuse Training

2009

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Objectives

• Define fraud, waste, and abuse

• Recognize the financial impact of fraud

• Identify where fraud can be committed

• Share examples of suspect fraud

• Understand preventive efforts

• Review AvMed’s Anti-Fraud Plan

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What is Fraud

• Fraud– The intentional deception or

misrepresentation that an individual or entity knows to be false or does not believe to be true and makes, knowing the deception could result in some unauthorized benefit to himself/herself or some other person.

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What is Waste

• Health care spending that can be eliminated without reducing the quality of care such as quality waste (overuse, underuse, and ineffective use) and inefficiency waste (redundancy, delays, and unnecessary process complexity)

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What is Abuse

• Abuse– Practices by facilities, physicians, and

suppliers, while not usually considered fraudulent, are nevertheless inconsistent with accepted medical, business, and fiscal practices.

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Five Elements of Fraud

FalseRepresentation

Justifiable Reliance by

IntendedVictim

ResultingDamage

Knowledgeof

Falsity

Intentto

Defraud

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Audit vs. Investigation

• Regular, recurring• General• Opinion• Non-adversarial• Financial data• Professional

skepticism

• Non-recurring• Specific allegation• Determination• Affix blame• Interviews• Proof to support

allegation

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Impact of Fraud

• The United States spent in excess of $2.2 trillion on health care in 2007

• Fraud is estimated to be between 3% - 10% of health care dollars

• If 5% is the average lost to health care fraud, that would equal to losing approximately $100 billion in 2007 or about $300 million per day

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Vulnerabilities

• Where can fraud and abuse occur?– Hospitals, Physicians, Members, Nursing

Homes, Home Health Care, Ambulance Services, Office Staff, Chiropractors, Clinics, Brokers and Agents, Durable Medical Equipment, Laboratories, Accident Claims, Pharmacies, Employees, Drug Manufacturers, Pharmacy Benefit Managers, Group Enrollments, Wholesalers, Workers Compensation, to name a few…

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Examples of Pharmacy Fraud

• Billing for higher supply than dispensed

• Employee fraud with dispensing

• Enhance revenue of brand vs. generic

• Kickbacks using manufacturers products

• Controlled drugs without physician service

• Outlier of reversal rates

• Prescription splitting

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Examples of Pharmacy Fraud

• Altering prescriptions

• Drug diversion

• Pharmacist billing for “gang visits”

• Excessive quantity dispensed

• Prescription price with inflating AWP

• Prescription drug shorting

• True Out-of-Pocket (TrOOP) manipulation

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Examples of Pharmacy Fraud

• Double billing

• No prescription on file

• Unauthorized refills

• Incorrect days of supply billed

• Unit billing issues

• Dispensing without validation of customer

• Dispensing expired prescription drugs

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Examples of Facility Fraud

• Unbundled supplies and equipment

• Non-covered services hidden

• Inflating costs

• Charge master inconsistencies

• Up coding

• Unlicensed ambulatory surgical centers

• Skilled nursing failure of care

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Examples of Facility Fraud

• Failure to report credit balances

• Seeking reimbursement for costs not related to patient care

• Failing to disclose relationship between business entities

• Diagnostic unnecessary testing

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Examples of Member Fraud

• Stolen card falsification

• Misrepresentation on enrollment forms

• Stolen prescription pads

• Altering prescriptions

• Physician or pharmacy shopping

• Excessive visits for controlled substances

• Beneficiary ID card sharing

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Examples of Physician Fraud

• Coding (up, down, modifiers, rule playing)

• Place of service falsification

• Non-rendered or phantom billing

• Medically unnecessary or unbelievable

• Kickbacks or bribery

• Billing free services

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Examples of Physician Fraud

• Duplicate billing

• Waiver of co-pay or deductible

• Misrepresentation on claim

• Selling filled scripts on black market

• Prescribing to self or family

• Over prescribing to patients

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Examples of Physician Fraud

• Excessive scripts of controlled substances• Excessive quantities of controlled

substances• Overutilization• Unlicensed office-based surgeries• Resubmission of denied claim with

different code(s)• Medical treatment unrelated

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Prevention

• Combating Fraud is a Collaborative Effort– AvMed Health Plans Anti-Fraud Program– Department of Justice – Federal Bureau of Investigation– Office of Inspector General– Centers for Medicare & Medicaid Services

• Education• Administrative Sanctions• Civil Litigation and Settlements• Criminal Prosecution

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Prevention

• Develop a Compliance Program to include Fraud, Waste, and Abuse

• System for monitoring claims for accuracy

• Review medical records to validate documentation supports services rendered

• Perform regular internal audits

• Take action when an issue is identified

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AvMed’s Anti-Fraud Plan

• Fiduciary Responsibility

• Mission Statement

• Compliance– Section 626.9891(a)(b), Florida Statutes– Section 626.9891(3), Florida Statutes– Rule Chapter 69D-2.001-005, Administrative Code– 42 C.F.R. 422.503, Medicare Advantage Program– 42 C.F.R. 423.504(b)(4)(vi)(H), CMS Part D– Federal Employees Health Benefit Program

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Fiduciary Responsibility

• The Board of Directors has a fiduciary responsibility to AvMed specifically and to the broader health care community to resist criminal behavior, instances of false claims and improper billing and coding practices, and other schemes that adversely impact patient safety, the quality of health care services being delivered and that impose a tremendous financial burden on the health care system.

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Mission Statement

• Fraud and Abuse Program Mission Statement seeks to meet the customer’s expectation that we will reimburse only for services that are medically necessary and appropriate and that the benefits will be issued only to eligible subscribers and providers.

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Anti-Fraud Plan

Prosecution

Reporting

Tracking

Recovery

Investigation

Detection

Prevention

EducationTraining

Compliance

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Resources

• Tips – Internal– External

• Coding Texts– ICD-9-CM, CPT, HCPCS

• Data Mining and Profiling• National Health Care Anti-

Fraud Association • American Medical Association• American Health Information

Management Association

• Websites– U.S. Government– Regional CMS Carrier– Professional Physician

• Medicare Drug Contractors• Law Enforcement• Federal Bureau Investigation• Office Inspector General• Vendors• Media• Anonymous (Hotline)

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Healthcare Fraud and You

• Healthcare fraud is a menace to you, your family, and the future of your health care

• It causes higher premiums or fewer benefits, higher taxes, and higher co-payments

• Your detection and referrals are critical to the success of all anti-fraud efforts

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Training Attestation

Now that you have completed Fraud, Waste, Abuse, and Compliance Training in

accordance with CMS regulations, please click here to attest completion of the

program.