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“60 Minutes” recently featured a report on how criminals are defrauding Medicare out of billions of dollars every year. To see a short clip from that segment,
click here.
The Los Angeles Medicare Fraud Strike Force arrested 20 California residents for their involvement in various Medicare fraud schemes that resulted in over $26 million in fraudulent bills to the Medicare program, according to a
Department of Justice (DOJ) press release.
A total of seven cases are pending trial all involving durable medical equipment company owners and marketers who are accused of fraudulently ordering and billing for power wheelchairs, orthotics, and hospital beds.
Since its inception in 2007, the Los Angeles Medicare Strike Force has indicted 331 individuals who collectively have billed the Medicare program falsely for more than $720 million, according to the DOJ.
The Office of Inspector General (OIG) will be searching for relevant information prudent to your hospital’s audit. This information is called evidence. To support your audit begin to collect four types of evidence before the OIG visits:
- Physical Evidence: Paraphernalia obtained through direct inspection of property, events, and people. (e.g., maps, photographs, illustrations, written summaries of observations, charts)
-
Documentary Evidence: Created evidence including: spreadsheets, accounting records, contracts, invoices, letters, performance reports, and surveys.
- Testimonial Evidence: Information received through bias-free interviews and inquiries from individuals involved in the particular audit.
- Analytical Evidence: Collect analytical evidence through the verification of amassed information, facts, and data. Laws, legal and non-legal opinions, hospital standards, and past and present operations should all be compared to your analytical findings.
This week’s tip was adapted from The Healthcare Auditor’s Handbook, for more information about the book or to order your copy click here.
Pharmaceutical giant Pfizer Inc. and its subsidiary Pharmacia & Upjohn Company Inc. will pay $2.3 million for the largest healthcare fraud settlement in the history of the Department of Justice (DOJ). According to a DOJ press release, Pfizer has agreed to pay a fee of $2.3 billion to amend criminal and civil liabilities arising from the illegal promotion of four medications – Bextra, an anti-inflammatory drug; Geodon, an anti-psychotic drug; Zyvox, an antibiotic; and Lyrica, an anti-epileptic drug.
Pfizer submitted false claims about the prescriptions to government healthcare programs that were either not accepted or covered. The provisions of the FDA state that a company must specify the intended uses of a product and products may not be marketed for any non-listed uses.
Six whistleblowers spurred the investigation by filing lawsuits under the qui tam provisions of the False Claims Act and will receive compensation totaling more than $102 million. Part of the $2.3 billion settlement will resolve allegations that Pfizer supplied kickbacks to healthcare providers to persuade them to prescribe these drugs.
The individual criminal fine of $1.195 billion is the greatest criminal fine ever procured in the United States for any matter. Kathleen Sebelius, Secretary of the Department of Health and Human Services estimates that nearly $1 billion will be allocated to Medicare, Medicaid, and other government insurance programs.
The Utah Medicaid program has significant room for improvement when it comes to program integrity, according to a report released by the Utah Office of Legislative Auditor General.
- Prior authorization. The report says that authorization for services prior to their implementation could be a great way to prevent overutilization of Medicaid services; however the reports says the state’s Bureau of Program Integrity does not properly use this strategy. The report estimates a 1% change in the approval rate for the prior authorization process could save $700,000 ($210,000 in state dollars).
- Improved recovery effort. The report suggests the state step up its fraud, abuse, and waste recovery effort. The report estimates a 3% increase in this area could save $20.2 million ($5.8 million in state dollars) over time.
Community Health Systems Inc., a Tennessee-based heathcare corporation, allegedly made illegal donations to New Mexico counties that contain three Community Health hospitals, according to an August 10
Albuquerque Journal article.
The suit claims Community Health made donations to the counties to subsidize the state’s Medicaid contributions. The counties then allegedly turned that money over to the state as their Medicaid contribution. Because the federal government pays three times what the state pays for Medicaid, Community Health allegedly received a return on their investment plus triple the amount donated.
The whistleblower suit was filed in 2005 by a former employee, Robert C. Baker. According to the article, Baker learned about the scheme when he took over as revenue manager for Eastern New Mexico Medical Center in Roswell.
State Medicaid Fraud Control Units (MFCU) recovered $1.3 billion in court-ordered restitution, fines, civil settlements, and penalties for fiscal year 2008, according to an August 7
Office of Inspector General (OIG) report.
MCFUs also obtained 1,314 convictions; achieved 971 civil settlements and/or judgments; and excluded 755 providers from participation in the Medicare, Medicaid, and other Federal health care programs in FY 2008, the report stated.
The mission of the MFCUs is to investigate and prosecute Medicaid provider fraud and patient abuse and neglect. Forty-nine states and the District of Columbia have MFCUs—North Dakota does not have an MFCU.
The report highlights a settlement between the New York MFCU and Staten Island University Hospital (SIUH) and SIUH Systems, Inc., in which SIUH agreed to pay the Medicaid program $24.8 million. The settlement resolved allegations that SIUH Systems billed Medicaid for detoxification treatment provided in a special unit of the hospital without a state-issued certificate of operation.
Continuing the trend of increased fraud enforcement, the Medicare Fraud Strike Force arrested 32 suspects in a connection with Medicare fraud schemes that billed the government for medical supplies that were not medically necessary, according to a
Department of Justice (DOJ) release.
The bulk of the arrests were made in Houston, where health clinic owners billed Medicare for as much as $4,000 for “arthritis kits”—essentially knee braces, shoulder braces, and heating pads. According to the DOJ, patients said they either did not need the kits or never received them. The strike force also arrested individuals in New York, Boston, and Louisiana in connection with the scheme.
Authorities also broke up a liquid food scam in Houston, in which clinic owners billed Medicare for liquid food (e.g., Ensure) that they never provided to patients. According to the DOJ, some clinics even billed deceased patients.
This major bust comes months after Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius announced they were adding millions of dollars to the fight against healthcare fraud and abuse. The Medicare strike force has targeted Houston, Miami, Los Angeles, and Detroit as hotbeds for medical fraud and abuse, and has recovered $371 million in false Medicare claims and charged 145 people in just two months.
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