Physicians Need to Be Aware of New Federal Anti-Fraud Weapons

Medicare pays approximately 1.5 million doctors, hospitals, and providers each year, approximately $750 billion in claims. By some estimates, $65 million of this is "fraudulent." The term “fraud” usually means malum in se fraud, (bad in itself, like stealing) but can include "abuse." This means engaging in behavior which defines malum prohibitum (bad because the government told you "don’t do it."). In cases of criminal fraud (the “stealing” kind) CMS and the Office of the Inspector General (OIG) have been widely criticized for a system of “pay, then chase.” Often, the worst abusers have been highly sophisticated, stealing or paying for Medicare claim numbers, and getting away with payments of massive amounts of money.

On August 22, National Public Radio discussed the new tools available to the government under the Affordable Care Act (ACA) with Peter Budetti, who oversees anti-fraud efforts at CMS. According to Budetti, "For a long time we were not in a position to keep up with the really sophisticated criminals …They're not only smart, they're extremely well-funded. And this is their full time job."

Criminals use real patient IDs to bill for wheelchairs that were never delivered or exams never performed. Dishonest doctors - a small percentage of physicians, to be sure - charge for care they never deliver or perform unnecessary operations. In one scam, criminals bill Medicare and a private insurer for the same patient. The federal health law and other legislation directed the federal government to start using sophisticated anti-fraud computer systems. Budetti said the systems, which are being used first with Medicare, are similar to those used by credit card companies to detect suspicious purchases.

"We're able to now verify whether a person was being treated by two different physicians in two different states on the same day or a variety of other possibilities," he said. This permits the government to do what credit card issuers have done for years.

The computer program crawls around the heaps of Medicare claims - some 4 million a day - to look for outliers: spikes in prosthetics in Miami or heart stents in Missoula, for example. And for the first time, doctors and others who want to bill Medicare are being assessed based on their risk to commit fraud. Those who seem crooked are kept out.

What’s also new, under the ACA, is the ability of CMS and OIG to temporarily suspend payments upon a "credible report" of fraud. Hence, no more "pay, then chase." According to a story by Kaiser Health News, the Obama Administration's approach to fighting fraud has been more systematic than previous ones. Indeed, the number of so-called Medicare Strike Force teams operating around the country has quadrupled since 2009. Still, the mantra of the fraud fighters sounds a lot like a department store sale: The more you spend, the more you save.

In the meantime, those in charge of the government's anti-fraud efforts say the new approach is working. The number of defendants facing fraud charges jumped sharply last year. At the end of September, Medicare is expected to report to Congress the number of new scams detected and the number of new cheats kept out of the program.

How does all of this affect the average physician’s practice?

The case of U.S. v. Krizek is familiar to anyone who has read a health law textbook. The case resulted in three appellate decisions, six federal opinions in total, and one appeal to the U.S. Supreme Court. The texts report how a Washington, D.C.-based psychiatrist was sued for $82 million in penalties, though he barely earned $125,000 a year, ultimately suffering judgment of $225,000. What you won’t see is the back story of how Dr. Krizek got in trouble in the first place.

Krizek didn’t understand CPT codes, and excessively used Code 90844. Code 90844 is the code for a one-hour therapy session. Krizek used it when his time spent working on a particular case reached one hour in the aggregate, not simply for face-to-face time. Krizek also did not realize, (which you should) excessive use of a particularly highly reimbursable CPT code is exactly what genuinely fraudulent criminals would do, if they wish to claim payment for treatment never given.

According to Mrs. Krizek, even though she could prove the patients were genuine, the government was on the scent, and would not give up. The moral of the story is this: Now that the government has new tools for identifying excessive use of suspect codes, you must vigilantly keep abreast of what those codes are, lest you find the FBI in your practice lobby.

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