Kusserow on Compliance: Four physicians charged in $200M prescription fraud scheme

A CEO and four physicians were charged in a superseding indictment in an investigation of a $200 million health care fraud scheme that involved a network of Michigan and Ohio pain clinics, laboratories, and other medical providers. Additional charges included wire fraud conspiracy, money laundering, and distribution of over 4.2 million medically unnecessary dosage units of controlled substances and medically unnecessary injections to Medicare beneficiaries, some of whom were addicted to narcotics. These included oxycodone, hydrocodone and oxymorphone. Some of the opioids were resold on the street.

When a medical review was made of the injection claims, it was found that 100 percent of the claims were not eligible for Medicare reimbursement. In order to conceal the continued billing of these fraudulent claims to Medicare, the defendants created new shell companies and continued to engage in the same billing of fraudulent claims, often changing only the name of the company on the door to the medical practice and/or inventing new suite numbers to conceal the continuation of the fraudulent practices at the same location. Defendants also owned a diagnostic laboratory to enable them to order medically unnecessary urine drug testing from the laboratory. When Medicare conducted a medical review of claims submitted by the laboratory, it determined that 95 percent of the claims were not eligible for Medicare reimbursement and ordered the diagnostic laboratory to repay $6.9 million in improper payments.

Another scheme involved money laundering in connection with a $6.6 million wire transfer and the withdrawal of $500,000 in cash, which was hidden in plastic bags in the closet of the house.  The indictment alleges that transferred proceeds derived from the conspiracy were used to allow the defendants to live an extravagant lifestyle and spend millions of dollars on luxury items—clothing from retailers like Hermes, rare Richard Mille watches, and exotic automobiles such as a Lamborghini and Rolls Royce Ghost. The proceeds were also used to purchase a mansion and other real estate in the Detroit, Michigan area and to sit courtside or in the first row of NBA basketball games, including the NBA Finals.

 

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2018 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: CMS improperly paid $367M for outpatient physical therapy

The OIG issued an audit report that found sixty-one percent of Medicare claims for outpatient physical therapy services reviewed did not comply with Medicare medical necessity, coding, or documentation requirements, resulting in an estimated overpayment of $367 million for outpatient physical therapy services that did not comply with Medicare requirements. These overpayments occurred because CMS controls were not effective in preventing improper payments for outpatient physical therapy services. The Medicare Part B program paid approximately $2 billion for outpatient physical therapy services provided to beneficiaries and past OIG reviews of individual physical therapy providers identified claims for outpatient physical therapy services that were not reasonable, medically necessary, or properly documented.  The OIG analyzed a stratified random sample of 300 outpatient claims for physical therapy services. The OIG’s stated objective was to determine whether Medicare claims for outpatient physical therapy services complied with Medicare requirements. Errors identified fell under three categories:

  1. Services that were not medically necessary, including services which were not reasonable—there was no evidence that the services would be effective, the services did not require the skills of a therapist, or there was not expectation of significant improvement.
  2. Coding did not meet medical requirements—timed units claimed did not match units in treatment notes; missing modifiers; and incorrect codes.
  3. Documentation did not meet Medicare requirement—plan-of-care deficiencies; treatment note deficiencies; and recertification deficiencies.

The OIG recommended CMS: (1) instruct the Medicare contractors to notify providers of potential overpayments so that those providers can exercise reasonable diligence to investigate and return any identified overpayments, (2) establish mechanisms to better monitor the appropriateness of outpatient physical therapy claims, and (3) educate providers about Medicare requirements for submitting outpatient physical therapy claims for reimbursement. CMS generally disagreed with these findings and believes further analysis of the sampled claims is warranted to determine whether the claims met Medicare requirements, according to the report.

 

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

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Copyright © 2018 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: OIG summarizes investigative accomplishments from last three years

The OIG testified before the House Committee on Ways and Means and reported that in the last 3 fiscal years, its investigations have resulted in more than $10.8 billion in investigative receivables (dollars ordered or agreed to be paid to Government programs as a result of criminal, civil, or administrative judgments or settlements); 2,650 criminal actions; 2,211 civil actions; and 10,991 program exclusions. Much of this work involving the Medicare and Medicaid programs is funded by the Health Care Fraud and Abuse Control Program (HCFAC).  The HCFAC provides funding resources to the Department of Justice (DOJ), HHS, and OIG, which are often used collaboratively to fight health care fraud, waste, and abuse. Since its inception in 1997, the HCFAC has returned more than $31 billion to the Medicare trust fund.

The OIG is a lead participant in the DOJ led Medicare Fraud Strike Force, which combines the resources of Federal, state, and local law enforcement entities to fight health care fraud across the country. The Strike Force operates in nine geographic hot spots, including Miami, Florida; Los Angeles, California; Detroit, Michigan; southern Texas; Brooklyn, New York; southern Louisiana; Tampa, Florida; Chicago, Illinois; and Dallas, Texas. Strike Force teams are led by the DOJ, includes the FBI and the OIG, along with state and local law enforcement. In 2017 alone Strike Force teams accounted for over 2,000 criminal actions with about 3,000 indictments, and accounted for monetary results of around $3 billion. Since its inception in March 2007, the Strike Force has charged more than 3,000 defendants who collectively billed the Medicare program more than $10.8 billion.

The OIG also collaborates with state Medicaid Fraud Control Units (MFCUs) to detect and investigate fraud, waste, and abuse in state Medicaid programs, as well as private sector stakeholders to enhance the relevance and impact of its work to combat health care fraud, as demonstrated by its leadership in the Healthcare Fraud Prevention Partnership (HFPP) and collaboration with the National Health Care Anti-Fraud Association (NHCAA). The OIG strives to cultivate a culture of compliance in the health care industry through various educational efforts, such as Pharmacy Diversion Awareness Conferences, public outreach, and consumer education.

 

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

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Copyright © 2017 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: OIG November 2017 Work Plan update

This year, the OIG is updating its annual Work Plan during the year, rather than annually. The OIG’s Work Plan sets forth various audits and evaluations that are underway or planned during the fiscal year and beyond. The updates will include the addition of newly initiated Work Plan items; removal of completed items. In conducting its work, the OIG assesses relative risks in HHS programs and operations to identify those areas most in need of attention. In evaluating potential projects to undertake, the OIG considers a number of factors, including mandates set forth in laws, regulations, or other directives; requests by Congress, HHS management, or the Office of Management and Budget; top management and performance challenges facing HHS; work performed by other oversight organizations (e.g., GAO); management’s actions to implement OIG recommendations from previous reviews; and potential for positive impact. In addition to working on projects that often result in audits, reviews, and reports, the OIG also engages in a number of legal and investigative activities that are separately reported.

New projects

  1. Use of Funds by Medicaid Managed Care Organizations (MCOs). In 2015, Federal Medicaid managed care payments were approximately $161.8 billion, which was more than 40 percent of the $349.8 billion in total Federal expenditures for Medicaid. States continue to expand their use of managed care. To deliver services to Medicaid managed care enrollees, states contract with MCOs and make monthly capitation payments to those plans to provide enrollees with Medicaid-covered services. Appropriately set capitation rates help to ensure that adequate payments are made to provide services to beneficiaries. OIG auditors plan to examine how Medicaid funds received by MCOs are used to provide services to enrollees with results reported in 2019.

 

  1. Opioids in Medicaid: Concerns about Extreme Use and Questionable Prescribing in Selected States. The OIG Office of Evaluation and Inspection will focus on the problem of opioid abuse and overdose deaths that have reached crisis levels in the United States, with more than 33,000 Americans dying from it annually. These issues are of particular concern for Medicaid beneficiaries because they are more likely to have chronic conditions and comorbidities that require pain relief. Especially affected are beneficiaries who qualify through a disability. The OIG plans to identify beneficiaries who received extreme amounts of opioids through Medicaid and those cases that appear to involve doctor shopping or pharmacy shopping, as well as prescribers associated with these beneficiaries. This review will provide baseline data about beneficiaries receiving extreme amounts of opioids and prescribers with questionable patterns for opioids in Medicaid.

 

  1. Medicaid Services Delivered Using Telecommunication Systems. Medicaid pays for telemedicine, telehealth, and telemonitoring services delivered through a range of interactive video, audio or data transmission (telecommunications). Medicaid programs are seeing a significant increase in claims for these services and expect this trend to continue. OIG auditors will over the next year or two determine whether selected states’ Medicaid payments for services delivered using telecommunication systems were allowable in accord with Medicaid requirements.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2017 Strategic Management Services, LLC. Published with permission.