Federal Agents at the Door: Medicare's Campaign Against Alleged Fraud and Abuse
by Mary Ferris, M.D., M.S.Ed| Geriatric Times |  |
July/August 2000 | |
Vol. I | |
Issue 2 |
Recent stories of physicians finding armed federal agents in their offices investigating alleged improper medical billings have alarmed clinical providers and prompted many to protest the increasing government role in medical practice. In some cities, doctors are closing their practices to Medicare patients in order to avoid dealing with the threat of criminal prosecution for innocent billing mistakes.
Physicians express fear that they will be targeted for investigation even after diligent efforts to keep current with the Medicare program's complex payment and compliance rules. A task force on health in the U.S. House of Representatives Budget Committee examined federal health programs for mismanagement, waste, fraud and abuse. They heard testimony from practicing physicians that the sheer volume and complexity of the current 110,000 pages of regulations-weighed in at 35 pounds-make physicians nervous that they could be out of compliance.
"Physicians have been forced to hire attorneys, consultants, and compliance experts to help them with the complicated and continuously changing Medicare regulations," said D. Ted Lewers, M.D., American Medical Association chair, in testimony to the committee. "The situation is out of control."
The Health Care Financing Administration (HCFA), the federal agency that administers the Medicare program, has insisted that rampant fraud exists throughout the country and must be dealt with harshly. As increasing cost pressures from the expanding senior population and advancing technology impact the Medicare program, it is not surprising that administrators have focused on finding waste and inefficiency in the 870 million claims paid to health care providers annually.
In June, the top administrator of HCFA, Nancy-Ann Min DeParle, sent a letter to 600,000 Medicare physicians nationwide asking for a partnership to reduce payment errors and protect the Medicare program. Specifically, she alerted providers that two CPT codes used for Evaluation & Management (E&M) Services-99214 and 99233-will be the focus of audits for coding errors in the year 2000, primarily because they have accounted for a significant proportion of the coding errors in the last two HCFA audits (Table 1). She also instructed billing intermediaries that process Medicare claims to establish toll-free hotlines for provider billing questions, and she promised increased education for providers and pilot-testing of simplified documentation guidelines for E&M services. Similar letters that pointed out the most common errors (Table 2) were also sent to Medicare Home Health Agency Providers and Durable Medical Equipment Suppliers.
In June, the Office of Inspector General (OIG) in the U.S. Department of Health and Human Services (HHS) also attempted to help physicians in solo or small group practices comply with regulations by issuing a draft compliance program guidance plan. These recommendations are designed to guide practices in "developing and implementing internal controls and procedures that promote adherence to statutes and regulations applicable to federal health care programs and private insurance program requirements" OIG claims these recommendations will "further the mission of all physician practices to provide quality care to their patients"(OIG, 2000). By adopting a compliance plan, OIG officials have said practices will be given unofficial benefit of the doubt should billing method questions arise.
The recent uproar over waste, fraud and abuse has been building since 1996, with reports from the General Accounting Office accusing HCFA of allowing career criminals and organized crime groups to defraud the Medicare program of millions of dollars. Recent figures estimate that $1 out of every $12 spent on Medicare was lost to fraud and abuse. In response, HCFA directed increased funds toward the detection and enforcement of the improper billing practices, with criminal penalties liberally applied.
President Clinton announced "Operation Restore Trust" at the 1995 White House Conference on Aging. This program, for the first time, unified three federal agencies-OIG, HCFA and the Administration on Aging-within the HHS to work with the U.S. Department of Justice to combat fraud and abuse. This two-year demonstration partnered with law enforcement agencies to target Medicare and Medicaid fraud in five of the largest states.
As Operation Restore Trust began, HHS started a hotline with the American Association of Retired Persons encouraging senior citizens to report suspicions of fraud and abuse in Medicare and Medicaid programs. HHS recently expanded the 1-800-HHS-TIPS hotline with a campaign entitled, "Who Pays? You Pay." Since 1997, the hotline has received 900,000 calls which contributed to identifying $30 million in improper Medicare payments.
Health and Human Services Secretary Donna E. Shalala said that the Medicare program needs its 39 million beneficiaries to act as "eyes and ears" in spotting mispayments. "We need a new kind of partnership with our beneficiaries," she said. "We need our beneficiaries to watch for mispayments, and for possible fraud, just as they would look for mischarges on their own bills."
Increased funding for this new approach came in the Health Insurance Portability and Accountability Act of 1996 (HIPAA), also known as the Kassebaum-Kennedy legislation. The act established a national Health Care Fraud and Abuse Control Program, which operates under the joint direction of the attorney general and the secretary of HHS, to coordinate federal, state and local law enforcement. A new multimillion dollar initiative entitled Medicare Integrity Program was created that has the authority to hire special anti-fraud contractors.
Providers may also feel the impact from the coordination of benefits contractor Group Health Inc., just hired in November 1999, to consolidate all activities associated with assuring that Medicare pays claims only when another insurer is not liable. Program safeguard contractors will evaluate the performance of standard payment safeguard activities currently performed by carriers and intermediaries, and statistical analysis contractors will provide comprehensive ongoing analysis of data to help detect waste, fraud and abuse.
Four years after HIPAA gave HCFA increased funding for fraud and abuse activities, Medicare officials claim that their efforts have contributed to a 45% drop in the improper payment rate, preventing $10.6 billion in inappropriate claims paid during the past year and recovering $524 million in judgments and settlements to Medicare in fiscal 1999.
The latest audit of 1999 Medicare payments from the OIG, issued in March, concluded that the largest source of improper Medicare payment errors resulted from poor documentation, followed by claims determined to be medically unnecessary by the eight billing carrier or peer-review organizations. Incorrect coding and noncovered services were the next two most common problem areas.
These conclusions were based on a sample of 5,223 claims subjected to a three-month medical record review. The review found that 1,034 claims did not comply with Medicare laws and regulations. These numbers were then used to project national error rates. Auditors estimated that improper payments during 1999 totaled $13.5 billion or about 8% of total Medicare fee-for-service benefit payments (Brown, 2000). Many have questioned the validity of these projections, and no methodology is currently being used to distinguish systemic organized fraud from more innocent errors. Nonetheless, legislation has given HCFA increased resources to fight fraud with $680 million for fiscal year 2001.
The physician and provider community has responded with alarm at the involvement of criminal prosecutors who have little training in analyzing complex medical decisions. Physicians have urged HCFA and congressional leaders to change their punitive approach to a more educational one.
In response, HCFA pledged to increase training for their auditors and to address common documentation problems and billing errors. Furthermore, the inspector general recently invited providers to voluntarily step forward when they believe a potential violation of the law may have occurred. In an open letter to the health care community on March 9, the inspector general suggested that providers who voluntarily admit improper behavior may be eligible for favorable treatment in the resolution of their cases. Problems exclusively involving overpayments should be brought directly to the attention of the entity responsible for claims processing and payment.
Despite the promises to increase education and assistance to providers, the programs and rhetoric against fraud and abuse continue to increase. Clinton's proposed fiscal year 2001 budget contains a long list of government initiatives to fight Medicare waste, fraud and abuse, including new technology to track false claims and increased funds to government fraud programs and the OIG. The increased attention has left members of the physician community concerned that honest physicians will drop out of the program, begin downcoding claims or take other measures to avoid attacks from overzealous fraud fighters. In the meantime, they hope they will not be the ones to find federal agents knocking at their door.
Dr. Ferris is a geriatric consultant for CMRI, California's nonprofit peer review organization funded by HCFA.
References
Brown JG (2000), Office of the Inspector General Department of Health and Human Services. Medicare Waste, Fraud & Abuse. Testimony before the Senate Appropriations Committee Subcommittee on Labor, Health and Human Services, Education. Available at: www.hhs.gov/progorg/oig/testimony/00309fin.htm. Accessed June 20.
Department of Health and Human Services and Department of Justice (2000), The Department of Health and Human Services and The Department of Justice Health Care Fraud and Abuse Control Program Annual Report For FY 1999. Available at: www.hhs.gov/progorg/oig/new.html. Accessed June 20.
Min DeParle, NA (2000), CFO letter to home health agencies. Department of Health and Human Services. Available at: www.hcfa.gov/medicare/mip/hhaltr.htm. Accessed June 20.
Min DeParle, NA (2000), CFO letter to physicians. Department of Health and Human Services. Available at: www.hcfa.gov/medicare/mip/physltr.htm. Accessed June 20.
Office of Inspector General (2000), Draft compliance program guidance for individual and small group physician practices. Department of Health and Human Services. Available at: www.dhhs.gov/progorg/oig/modcomp/cpgphysiciandraft.htm. Accessed June 23.
Office of Inspector General (1998), Publication of the OIG's provider self-disclosure protocol. Department of Health and Human Services. Available at: www.hhs.govoig/oigreg/selfdisclosure.pdf. Accessed June 23, 2000.