Kusserow’s Corner: Dental Fraud and Abuse

We don’t often hear news dental fraud and abuse cases. This is as result of more limited benefits provided by government programs. Occasionally, we are reminded that enforcement problems extend to this area. Recently, the HHS Office of Inspector General (OIG) has focused on this area. It noted that Medicaid is the primary source of dental for approximately 35 million children and that in recent years, a number of dentists and dental chains have been prosecuted for providing unnecessary dental procedures to Medicaid children, as well as for causing harm to children while performing these procedures.

The OIG conducted a review relating coverage for children in low-income families and provides access to dental care in New York and issued a report entitled “Questionable Billing for Medicaid Pediatric Dental Services in New York (OEI-02-12-00330).” It analyzed New York Medicaid program, specifically looking into the fee-for-service paid claims for general dentists and orthodontists who provided services to 50 or more children in 2012.

Using several measures, the OIG identified dental providers with questionable billing who are extreme outliers when compared to their peers. It identified 23 general dentists and six orthodontists in New York with questionable billing. Medicaid paid these providers $13.2 million for pediatric dental services in 2012 and received extremely high payments per child; provided an extremely large number of services per child; or provided certain selected services, such as pulpotomies or extractions, to an extremely high proportion of children. Additionally, almost a third of the general dentists were associated with a single dental chain that had settled lawsuits for providing services that were medically unnecessary or that failed to meet professionally recognized standards of care to children.

The OIG noted that its findings raise concerns that certain providers may be billing for services that are not medically necessary or were never provided. It also raises concerns about the quality of care provided to Medicaid children. Although some of the billing may be legitimate, providers who bill for extremely large amounts of services warrant further scrutiny. Based upon findings, the OIG recommended that the New York State Department of Health:

  1. Continue to monitor general dentists and orthodontists to identify patterns of questionable billing,
  2. Ensure that the State employs adequate safeguards to monitor general dentists and orthodontists under managed care, and
  3. Ensure appropriate follow-up on the general dentists and orthodontists identified as having questionable billing.

The New York State Department of Health neither agreed nor disagreed with the recommendations, but identified actions it has taken or plans to take that support the first recommendation. It also outlined current requirements and processes that are in place that support the second recommendation. It did not indicate whether any steps were planned to address the third recommendation.

Recent examples of dental fraud and abuse enforcement actions include the unlicensed owner of Indiana-based Anderson Dental Center, who was charged with Medicaid fraud, theft, money laundering, and forgery. Eight employees, including three dentists, are also facing various charges that include Medicaid fraud, money laundering, and forgery in connection with submitting fraudulent claims for un-provided dental services to the state Medicaid program and with falsifying documents.

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.

Copyright © 2014 Strategic Management Services, LLC. Published with permission.

Vermont’s Single Payer System Slow Down

On May 28, 2011, Gov. Peter Shumlin signed Act 48 into law, which calls for a three-stage implementation of a publicly-financed universal health care system by 2017. The goal of Act 48 is an eventual state-funded and operated single-payer system. It’s three years later, however, and what momentum the Act had is starting to slow down, especially as the Governor is expected to release the finance plan for the project.

Single Payer System Design.

Vermont’s move to a single payer system was designed to meet the federal requirements the Patient Protection and Affordable Care Act (P.L. 111-148) (ACA). In doing so, it may take advantage of federal monies targeted for Vermont’s Health Insurance Exchange and to petition for federal waivers that would streamline Vermont’s reform. The system should extend coverage to each of Vermont’s 620,000 residents while containing soaring health care costs.

Vermont’s plan establishes a state Health Insurance Exchange, as mandated by new federal health care laws, that will offer coverage from private insurers, state-sponsored and multi-state plans. It also will include tax credits to make premiums affordable for uninsured Vermonters. The exchange will be managed by a five-member board which sets reimbursement rates for health care providers and streamlines administration into a single, unified system. On the Exchange, Vermont residents and small employers will be able to compare rates from a variety of plans and enroll in the plan of their choice. Among the criteria are adoption of a financing plan by 2014; ensuring the new system costs less than the current fee-for-service one; and obtaining federal permission via a waiver to allow Vermont to proceed with the single-payer option, in around 2017.


There are many benefits to a single payer system. When the government owns and operates one health insurance plan for all residents, it sets a single price for each medical procedure. These prices tend to be lower because the government is negotiating one rate for all citizens. Administrative costs are also lower because there is no insurance company. Physicians send their bill to the federal government.


Of course, it’s not quite that easy – single payer system also has several problems. First, the government is the one to make difficult decisions about what benefits will and will not be covered. It could theoretically be up to the government to determine whether or not a patient will receive things like prescription drugs or dentist visits. Some single payer systems are associated with longer wait times for medical care, however a recent study by the Commonwealth Fund found that while some single payer systems have longer wait times, others see patients quicker than here in the United States.

Pause in the Process.

Under Act 48, Governor Shumlin was required last year to outline some financing options for lawmakers to consider but that has yet to be done.  The legislation required that the state provide an outline on how it plans to raise the estimated $1.7 billion to $2.2 billion to finance the future single payer system. At the beginning of the current legislative session, the governor said a menu of financing options would be released in April for legislators to discuss. Now, Governor Shumlin says he will wait until 2015 for the release. Despite the delay in developing the financing plan for the state’s single payer system, Shumlin said in a recent interview that he still thinks there’s enough time to meet his target date of 2017 for Vermont to become the first state in the country to implement a single payer health care system.

“I believe that we will collectively come to the same conclusion, that moving to a system where you spend less money for better quality and better outcomes,” said Shumlin. “Combined with a payment system where we all, based on our ability to pay, (will) lead to prosperity and an affordable quality health care system for all.”

He offered a slightly different reason for the stall in another interview last February, when he said the decision to delay unveiling the finance options was made over the past several weeks. “We have a very good business advisory group … that’s helping us to put together a package that will work for Vermonters as well as for businesses,” he said. “As we’ve gotten into the weeds of the various details that need to be ready to lay out a menu of options, there’s pretty broad agreement that we’re just not there yet.” Either way, it’s clear Vermont needs more time.

Fresh Faces to Figure Things Out.

Governor Shumlin has made some new hires to help him with figuring out details for the Exchange. Agency of Commerce and Community Development (ACCD) Secretary Lawrence Miller will become Senior Advisor to the Governor and Chief of Health Care Reform, where he will be tasked with overseeing the state’s health care reform efforts and transition to Green Mountain Care. He will report directly to the governor. Patricia Moulton will replace Vermont Administration Secretary Lawrence Miller when he moves up to advise the Governor.

In a recent interview, Miller commented, ““We know that concern about health benefits holds people back from striking out on their own and starting new businesses, and it keeps people locked in jobs for the wrong reasons…Health insurance is also a huge cost factor for all enterprises, including our schools.  We obviously have to do something different. I am encouraged that Vermont’s efforts at cost containment are beginning to bear fruit, and I am ready to help move us forward.”

Global Budget Payment.

Recent reports indicate that at least one hospital in the state will begin testing a “global budget payment” system. Global budgets are set payments determined by state regulators to care for the population a hospital serves, as opposed to the hospital billing for each individual service it provides. With this program, if the hospital exceeds its budget it loses money. The budget is based on the hospital’s historic revenue with adjustments for inflation and changes within the population it serves.

For more information on health reform in Vermont, please see Michelle Oxman’s post, “Highlight on Vermont: Implementing the ACA on the Road to a Single Payer System,” from February, 2014. She reviews the struggles Vermont is having with its Health Insurance Exchange and the state’s struggle to provide coverage for its uninsured population, which is the highest in the country.

Highlight on Pennsylvania: Hospitals Suffering While Governor Digs in His Heels with the Feds Over Medicaid Expansion

Although Pennsylvania Governor Tom Corbett announced last fall that he changed his mind and now plans to expand the state’s Medicaid program, he now claims that he’s getting close to his “breaking point” over the Obama administration’s apparent resistance to his plan to use billions of federal Medicaid expansion dollars to subsidize private health insurance policies.

Pennsylvania did not initially expand Medicaid eligibility as part of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), but last fall, Governor Corbett outlined a plan that includes offering Medicaid to more Pennsylvanians by using private health insurance plans and instituting new requirements for all Medicaid enrollees. Under his plan, Medicaid beneficiaries would have to pay monthly premiums and demonstrate they are searching for jobs.

Governor Corbett’s plan seeks to change Medicaid expansion under the 2010 federal health care law more than any other state. That includes waiving Medicaid’s consumer protection rules on benefits and networks for the private insurance plans funded by expansion dollars. The plan must pass the state legislature and also win approval from the federal government, but it’s meeting with resistance.

Governor Corbett is unhappy with the lack of progress. “Frankly, I’m starting to feel like a yo-yo,” Corbett said after he addressed a conference of health care professionals organized by the state Department of Health, “Right now, the road is getting bumpier rather than smoother. … I am getting to my breaking point.”

With the lack of progress being made by the Governor, hospitals are paying the price, literally and figuratively. Medicaid payment cuts and uncompensated care are hitting hospitals in Pennsylvania hard, putting hospital jobs, services, and capital projects at risk, according to recent data from the Pennsylvania Department of Labor & Industry and a recent survey conducted by the Hospital & Healthsystem Association of Pennsylvania (HAP).  As many as two-thirds of hospitals in the state have instituted hiring freezes, while close to half of them have laid off staff, half have delayed capital projects and more than 40 percent have cut services.

“Pennsylvania hospitals confront a changing and uncertain healthcare environment, mounting federal payment cuts and an economy that is still struggling,” said HAP Chief Executive Officer Andy Carter. “As hospitals work to transform the delivery system, they need stability in federal Medicare and Medicaid payments in order to make needed improvements without jeopardizing Pennsylvanians’ access to healthcare.”

Hospitals have felt the burn for some time as they’ve been hit with waves of federal budgetary actions which have reduced hospital payments since 2010. According to the HAP report, by the end of 2014, Pennsylvania hospitals will have had their Medicare payments cut by about $800 million. And the outlook is grim. Pennsylvania hospitals are expected to lose nearly $10 billion over the next decade.  And things will get worse if two Medicare policies, the Medicare-Dependent Small Rural Hospital program and Low-Volume Hospital Adjustment, which are crucial to the fiscal viability of Pennsylvania’s rural hospitals, are allowed to expire on March 31, 2014.

Carter urged Congress to keep the policies from expiring and asked that Congress extend support for rural hospitals. “Hospitals simply cannot afford any more payment reductions,” said Carter, “We urge state lawmakers to preserve and protect hospital payments in the upcoming budget,” said Carter. He also called on the federal government to approve Pennsylvania’s Healthy PA waiver to increase access to health insurance for low-income, uninsured Pennsylvanians.

Kusserow’s Corner: Fraud is Expanding Faster than Those Charged with its Enforcement

In a number of recent articles, I cited a wide range of enforcement actions by the federal government. Many of those cited were out of the Miami area. On March 26, Brian Martens, Assistant Special Agent in Charge for the Miami for the HHS Office of Inspector General (OIG), provided testimony before the Senate Special Committee on Aging regarding efforts to combat Medicare fraud that he estimated costing taxpayers $60 billion to $90 billion each year. He regaled the Committee with several of the notorious cases I reported in the last year. He stated that, in spites of many recent successes in the region, criminal fraud schemes continue to evolve and it is a challenge for enforcement agencies to keep pace with them. No sooner do enforcement efforts identify and target certain schemes, than new ones pop up. Wrongdoers move quickly geographically and among parts of the Medicare program, often relying upon the muscle of organized crime. He cited a number of frauds that originated in the Miami area that were quickly copied in other regions of the country.

He stated that there are two elements needed for Medicare fraud: a provider billing Medicare and patient beneficiaries against whom claims can be submitted. There are three ways beneficiaries get involved in a fraud. They can be unknowing victims; they can unwittingly benefit from some service or product that was not medically necessary; or they can be complicit with the scheme by using or selling their number for personal gain or being paid to claim Medicare services or products.

Martens stated that “These criminals are taking advantage of those most vulnerable in our society–the elderly and the disabled.” He stated that although in a majority of cases there is no direct harm to patients, beneficiaries do feel the effect of the crimes that often distort their medical records, which can result in identity theft and compromising of their Medicare number. Common tactics include paying kickbacks to recruiters for finding patients and providing unnecessary services.

During his testimony, Martens provided a number of examples of fraud schemes that have cost Medicare many millions of dollars. He cited an $8-1 return on investment for the resources devoted to fraud investigation. He made a point of noting that the case load of the OIG has quadrupled over the last five years, while the OIG is facing declining resources to combat fraud; therefore, what is needed is more resources. “We don’t have the staff that we need with the amount of fraud that goes on,” he said. He further noted that Strike Forces were not operating at full strength due to funding shortfalls and hiring freezes. All of this means that the OIG is greatly dependent on working with other enforcement authorities at the state level and with the private sector in an effort to keeping pace with the workload.

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.

Copyright © 2014 Strategic Management Services, LLC. Published with permission.