What to Do If You Suspect Healthcare Fraud

What to Do If You Suspect Healthcare FraudAs a nurse, you know all too well that you’re on healthcare’s frontline in many ways. But fraud will prove to be one of your biggest battlegrounds.

Even if you haven’t encountered fraud in your workplace yet, don’t think it’s someone else’s problem. It has become everyone’s concern, which is why the crime has grabbed the attention of the White House, federal and state prosecutors, the Centers for Medicare and Medicaid Services (CMS) and a variety of law enforcement agencies, including the Federal Bureau of Investigation (FBI). No doubt, your healthcare employer is keenly aware of the problem.

The American Nurses Association (ANA) is working with CMS to develop a fraud detection and prevention program for continuing education credit, says Lisa Summers, DrPH, senior policy fellow in ANA’s Department of Nursing Practice and Policy. “The government is putting very significant resources into this. We want nurses to be aware, because they are everywhere in the healthcare system,” Summers says.

Fraud’s huge toll

According to the National Health Care Anti-Fraud Association (NHCAA), the U.S. spends over $2.5 trillion on healthcare annually. Of that, fraud claims tens of billions of dollars.

The loss affects patients, taxpayers and government through higher healthcare costs, taxes and insurance, NHCAA says. And patients may be hurt by unnecessary procedures or become victims of identity theft.

As a nurse, you especially must understand billing rules and limitations to avoid being considered a participant in fraud, according to the ANA’s issue brief, “Ignorance is Not a Defense.”

Nurses’ roles

RNs serve a twofold purpose: You can educate your patients about the warning signs of fraud. And you can keep yourself out of trouble.

Protecting yourself and your patients means not being afraid to ask questions about billing and the business side of the practice – especially when your services are involved, Summers says.

“Nurses as employees have accepted that ‘You mark this on this billing sheet’ and perhaps someone else tells them ‘This is what you need to document’ but there is limited involvement. And that’s something that nurses need to be savvy about and work to change,” she says.

CMS’ Center for Program Integrity describes the stepping stones to fraud:

  • errors (incorrect coding);
  • inefficiencies (waste such as unnecessary services);
  • bending the rules (improper billing such as upcoding);
  • intentional deception (billing for services and supplies that were never provided).

APRNs: Be careful

Summers is especially concerned about billing by advanced-practice nurses (nurse anesthetists, clinical nurse specialists, nurse midwives and nurse practitioners). “Those are providers who directly bill Medicare and Medicaid, and those nurses in particular have to be very, very aware of how their services are being billed,” she says.

That’s especially true for “incident-to billing.”

Nurse practitioners, for example, who bill directly are reimbursed at 85 percent of a physician’s rate. But if services are billed “incident to” a physician – meaning, the physician is on the premises — reimbursement is 100 percent, Summers says.

“If you are a chief financial officer or nurse practice manager, you would rather get paid 100 percent than 85 percent, so there is financial incentive for services to be billed ‘incident to,’” she says.

Here’s an example: If a nurse practitioner works in a practice’s suburban office on a Tuesday afternoon, and the physician isn’t there on Tuesdays, the NP’s services cannot be billed as “incident to.”

Nurses who are aware that their services are being billed at higher rates than they should be or for treatment they didn’t provide, and do nothing about it, arguably are accessories to fraud, says Peter McMenamin, PhD, senior policy fellow and health economist at the ANA.

“Incident to” billing practices actually helped push CMS to change its fraud-fighting tactic from pay-and-chase to prevent-and-detect instead, he says.

That’s at least partly because “incident to” billing is not labeled as such on a claim. For example, a claim may indicate an injection was done but not who did it. It may appear as if the physician performed the service, McMenamin says.

ID theft database

Fraudulent billing also includes falsifying the name of the provider and patient or other recipient of treatment and supplies, according to the NHCAA.

According to an article about physician identity theft published in February 2012 in the Journal of the American Medical Association (JAMA), more than 3,600 cases of physician and patient medical identity theft were reported to the Federal Trade Commission in 2009; more than 12,000 cases were reported between 2007 and 2009.

The Center for Program Integrity at CMS tracks “compromised” Medicare identification numbers for physicians and beneficiaries through a database designed for the identity theft. About 5,300 Medicare physician identification numbers are in the database, and they congregate in known fraud “hot spots” – Los Angeles, Miami and New York, according to the JAMA article.

CMS also uses other fraud-fighting tactics, including special contractors and auditors who examine claims and paperwork, and predictive modeling technology similar to what credit card companies use to spot suspicious behavior and irregular billing practices.

In 2011, a joint effort of the federal Justice and Health and Human Services departments known as the Health Care Fraud Prevention and Enforcement Action Team coordinated the largest number of healthcare fraud arrests on record: In two separate incidents, 206 professionals – including doctors, nurses and company owners or executives – in 17 cities were arrested for their alleged participation in more than $530 million in fraudulent billings.

Practices that earn particular scrutiny include home health agencies and suppliers of prosthetics, orthotics and durable medical equipment.

What can be done?

NHCAA membership and communications director Michael Williams offers several more ways to rein in fraud:

  • Aggregate claims data across payers for broader analysis. (This is similar to a mortgage fraud-fighting tactic that allows law enforcement agencies to track who is doing multiple deals with different lenders.)
  • Healthcare providers should undergo screening and background checks. (Organized crime is prevalent in healthcare fraud. The crooks infiltrate organizations with their own physicians.)
  • Payers should suspend payments to providers suspected of fraud.
  • Government agencies and private insurers should share information about emerging fraud trends and schemes.
  • Hire enough staff to process the data generated by technology.

What to do if you suspect fraud?

Contact the Office of the Inspector General and review the information at the Stop Medicare Fraud website.

NHCAA also suggests contacting your state’s fraud bureau, which typically is within the state attorney’s office or insurance department; and state medical boards, which could be within your state’s professional regulation department or medical examiner’s office.

© HealthCallings.com, Dice Holdings Inc., 2012

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About Terry Sheridan

Terry Sheridan is a New England-based freelance writer who has covered business issues for 20 years.

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