Fraud, Waste and Abuse (FWA)
Karen Shifflett worked as a Federal investigator (Special Agent) for 24 years with the Department of Justice (DOJ) and Department of Defense (DOD); she retired 10 years ago. She is now working as a Provider Fraud Analyst with the Provider Fraud Team for the U.S. Postal Service, Office of Inspector General (USPS OIG) on criminal and civil cases that are prosecuted by the U.S. Attorney’s Office and DOJ. The cases involve fraud in the Federal worker’s compensation program. She works on joint cases with the FBI, Health and Human Services (HHS) OIG, Department of Labor (DOL) and other investigative agencies, including the Medicaid Fraud Control Unit (MFCU) for the Texas Attorney General’s Office.
Karen answered questions on Fraud, Waste and Abuse (FWA) that were submitted by nurses with KDJ Consultants. Three of these questions are presented in this blog post.
KDJ 1. What should we be looking for when doing routine medical record review?
Karen: When I look at a medical record, I look at all the billing records and compare to the provider’s documentation. This is much more comprehensive than looking at only provider documentation. A red flag is therapy notes that are duplicative in nature with few or no changes over time except the date of service. I understand electronic health records (EHRs) use standardized templates, but a legitimate progress/therapy/treatment note is going to have small changes, even if only a change in pain level. We look for patterns. We follow up with interviews, usually of former employees and patients. We often find that the patient is no longer going to the provider, but the provider continues to charge for visits, procedures and prescriptions. This can go on for years. You may also see a lack of medical justification and documentation for ordering procedures or medications for something unrelated to the primary or secondary diagnosis.
KDJ 2. When we notify a client of a potential FWA violation, what happens next?
Karen: If a FWA suspicion is reported to a client, they generally refer it to their internal reviewers. If they find there is a potential FWA violation, it is reported to federal officials, depending on the nature of the violation. Federal agencies that review FWA include HHS, the DOL, Office of Workers Compensation, Office of Personnel Management, and OIG. The federal departments often work together because providers may be billing multiple programs. The National Healthcare Anti-Fraud Association (NCHAA) is a great resource and offers training that is available to both government and private organizations. If enough evidence is found to support the complaint or allegation, it could be referred to the U.S. Attorney’s Office. This generally involves losses that are high-dollar. Some health plans will send providers a letter of education to put them on notice. The letter may state a specific monetary amount that the plan believes was an overpayment, and the plan may recoup the money through future disbursements to that provider. Most matters are never referred for criminal investigation, often due to the amount of the loss or the level of available resources.
KDJ 3. What best practice advice could you give providers to prevent FWA beyond regular CMS training?
Karen: Red flags that providers need to be aware of are lack of medical justification, unbundling codes, services not rendered, duplicate billing, and late claims. They should have annual training for their staff and themselves.
Some of the most interesting cases have involved Compound Pharmacies and Physical Therapy (PT) clinics. Most pharmacy cases involve “compound medications” that are not actually compounded but are relabeled off-the-shelf medications. Some cases involve kickbacks to providers to order these “compounded” drugs, and the physicians are indicted also. Cases involving PT clinics may reveal no licensed medical providers are working at an alleged PT clinic, yet the clinic is billing for professional services rendered several times per week. These cases often involve fraudulent billing of millions of dollars. The federal agencies do need to put more safeguards and edits in place to help identify billing anomalies earlier.