Industry Commentary
PCG Software COO Addresses Recent String of Fraudulent Claims Activity
Impacting Healthcare Industry; Provides Guidance
LAS VEGAS – October 23, 2017 – The healthcare industry has its share of bad apples. Unfortunately, the fraudulent actions of these rotten apples leaves a very bitter taste in the mouths of millions of stakeholders. Just recently, we learned of the Fort Worth doctor who was handed a 200 month sentence for Medicare fraud. Then, news broke of a Miami physician sentenced to 8 Years for “multifaceted” fraud, followed by a New Jersey chiropractor charged in an alleged scheme to recruit car crash victims as part of an insurance fraud network. PCG Software’s Chief Operating Officer Andria Jacobs, RN, MS, CEN, CPHQ, tackles a few questions on the impact these cases have on the healthcare industry as well as what organizations can do to uncover these fraudulent activities before they make national headlines.
Q: In most cases the fraudulent activity is discovered and the doctor sentenced for their crime, but what are the potential ramifications felt by the provider organization itself, as well as third-party payers?
Jacobs: Payers are stuck between a rock and a hard place when it comes to resolving the issues created by a fraudulent provider as the investigation and prosecution often take years. As a result, the members are financially impacted and so is the payer as the money may not be recoverable but even when it is, recovery is always a slow process. A network provider who is convicted is not a great recommendation for the plan’s panel of providers. As we’ve seen with many of this year’s high-profile cases, members are harmed by providers such as Dr. Farid Fata in Detroit who pleaded guilty in 2015 after poisoning hundreds of patients intentionally through unnecessary cancer treatments while collecting more than $17 million from fraudulent billings. As part of his criminal activities, Dr. Fata billed $225 million in six years to Medicare and was paid $91 million by the program. Arrested in August 2013, Fata pleaded guilty in 2014 and has agreed to forfeit more than $17 million and a number of assets in the case. When licensed professionals like the former Dr. Fata abuse the Medicare and Medicaid delivery systems, they harm the most vulnerable populations. Tax payers also pay the price for the fraudulent activity of these criminals, while members and employers are directly impacted by higher premiums and out of pocket costs.
Q: What’s being done at the Federal level to help protect the healthcare industry from these rogue doctors who are intent on committing corporate fraud?
Jacobs: The Federal coordination of investigative actions is ever increasing. In recent years, both HIPAA and ACA formulated new regulations and funding for the DHS, OIG, DOJ, along with other agencies to investigate and prosecute fraudsters. HIPAA required the establishment of a national Health Care Fraud and Abuse Control Program (HCFAC), under the joint direction of the Attorney General and the Secretary of the Department of Health and Human Services (HHS) acting through the Department’s Inspector General (HHS/OIG). The HCFAC program is designed to coordinate federal, state and local law enforcement activities with respect to healthcare fraud and abuse.
During Fiscal Year (FY) 2016, the Federal Government won or negotiated over $2.5 billion in healthcare fraud judgments and settlements. Fast forward to July 13, 2017 when Attorney General, Jeff Sessions, announced that 412 individuals had been arrested for taking part in healthcare fraud and opioid schemes that totaled $1.3 billion in false billing. 115 doctors, nurses and other licensed medical professionals were among the 412 charged for their alleged participation in healthcare fraud schemes. Of those charged, over 120 defendants, including doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics.
Q: How can organizations tighten up their internal claims process to ensure any fraudulent or abusive patterns can be identified?
Jacobs: There is no magic bullet or one provider analytics report that indicates that a provider has abusive or fraudulent billing practices. It takes time and staff work to discover those patterns of abuse. The fraud schemes are developed and tested with payers to make sure that they are working. The schemes look for weaknesses in the adjudication system and claims processing. Once the billing scheme is established, the schemes often continue. Billions of dollars are sucked out of the limited healthcare funds of both members and payers. Member reports of billing issues, reports from provider’s offices, and internal reports from claims and medical management all should raise the index of suspicion. Great care must be taken in gathering information regarding abusive billing practices. The lives and well-being of providers can be destroyed by rumor and false allegations. A provider who falls outside normal billing practices, is not a clear indicator of criminal activity or a straight pathway to prosecution. The staff of Special Investigation Units need special skills and a clear understanding of healthcare, claims data, data analysis, and investigative procedures. Billing behavior analytics are a key focus in identifying trends and patterns but only a part of the investigation.
About PCG Software
Established in 1984, PCG Software is a leading provider of innovative software solutions designed to slow the escalating costs of healthcare. The company works with healthcare payer organizations to increase profitability and maximize financial recoveries, while assisting their provider partners to improve the accuracy of billing processes.
The company’s flagship software solution, Virtual Examiner®, enhances claims adjudication systems with more than 30 million edits per claim and uses investigative profiling reports to graphically indicate patterns of fraud and abuse. Through more accurate and efficient claims adjudication, this fraud and abuse prevention software acts as an automated cost containment system for national and regional health insurance plans, independent practice associations and third-party administrators. For more information, visit www.pcgsoftware.com, or follow us on Twitter.
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Press contact information:
Dave Anderson
Anderson Interactive
252-715-4767
dave@andersoni.com
