The CMS is hard at work creating a giant, comprehensive repository of claims and payment data from all federal health programs. It's a tool the government believes will help rein in the massive amounts of money spent on claims that are wasteful or flat-out criminal.
And it's a tool that a lot of people would imagine the mighty U.S. government already has.
Kirk Ogrosky, deputy chief for healthcare fraud in the Justice Department's criminal division, says the process of uncovering schemes to rip off Medicare is like peeling an onion. He and his team have been getting very good at using data to peel the “onions,” but the reason there are so many tough layers concealing the cry-inducing contents is a legacy of the piecemeal expansion of Medicare and the patchwork of contractors that help the government administer it.
The CMS has been working for several years to overcome this legacy of fragmented information—which plays to the benefit of people who are gaming the system—and there's new political scrutiny focused on those efforts. The Obama administration wants to tighten the government's control on healthcare spending as it looks for funding to overhaul the system.
Deputy HHS Secretary Bill Corr in late October told the Senate Judiciary Committee that his department intends to put all hospital, physician and prescription drug claims into a single data repository by year-end.
“One of the most important things we've heard from day one from the Justice Department and our inspector general is, we have to have access to the data, to the claims as they come into the CMS,” Corr told the committee during a hearing on healthcare fraud. “We're doing everything we can to make sure that happens.”
By 2014, the CMS intends to have all claims data, including Medicaid, flowing to the integrated data repository, allowing the government to run analytics on hundreds of millions of data points to spot aberrations and trends, a program dubbed One PI, for program integrity.
That's the dream. The fragmented reality has made it all too easy for criminals to rip off Medicare by submitting claims that are flat-out lies, which causes a drain on the system that HHS and the Justice Department recently promised to redouble efforts to wipe out.
“It was like trying to get a bunch of different Windows versions to talk to each other with a bunch of Macs in between,” says Kimberly Brandt, director of Medicare program integrity at the CMS.
Earlier this year, the government made some progress with a new configuration of contractors hired to keep watch over the legitimacy of claims submitted to Medicare for payment, made possible with fee-for-service contracting reform initiated by the Medicare Modernization Act of 2003.
A single Medicare contractor will collect and analyze claims data for all categories—physicians, hospitals, durable medical equipment, prescription drugs, home health and hospice—in each of seven zones covering the country, largely mirroring the jurisdictions of Medicare Administrative Contractors. These Zone Program Integrity Contractors, or ZPICs, will get raw claims as well as ones that have been paid or rejected.
All of the data, meanwhile, are supposed to be assembled in formats compatible with a single platform, closing the door on a fragmented jumble of claims data produced by Part A fiscal intermediaries and Part B carriers.
ZPICs have been up and running since February in two of the nation's hot spots for the baldest of Medicare fraud: Florida, where SafeGuard Services holds the contract for a zone that also includes Puerto Rico and the Virgin Islands, and Texas, where Health Integrity is overseeing a zone that extends to Colorado, New Mexico and Oklahoma. Brandt says other contractor awards are expected in the coming months.
“I would say it's changing the game substantially,” Brandt says. The better view of what's going on in Florida allowed the CMS to reject bogus claims worth more than $1.5 billion as of May, she says. “Before we even let the money out the door, we stop it from getting paid.”
Adding to multiagency Medicare Fraud Strike Forces established in Miami in 2007 and Los Angeles in 2008, new teams rolled out this year in Detroit and Houston. In each case the government announced their presence with indictments alleging schemes carried out by dozens of defendants. While HHS continues working on One PI, ZPICS are intended to be able to supply coherent data requested by the Justice Department and HHS' inspector general's office.
Investigators employ the data-driven onion peeling to uncover the crimes that can seem absurd in the light of day—for example, prosthetics purchased for beneficiaries who have all of their limbs, or medical treatment for dead people. An analysis might start by identifying an unusually high rate of payments per beneficiary in a given area, Ogrosky says. From there investigators pull data from different categories of care from multiple sources.
“One of the things we commonly see is that physicians don't bill for an office visit,” Ogrosky says. “The doctors that have been prosecuted are just signing scripts.” In a sprawling case that started in 2004, investigators noted large numbers of prosthetics billed by suppliers of durable medical equipment, or DME, that couldn't be matched with physician bills for amputations.
Investigators look for claims that don't make sense, and then providers or companies that submitted them get a call or visit from government agents curious to see if there's a reasonable explanation and whether there's even a real, functioning business at the address listed. After a scheme is identified, investigators look for new leads by pulling claims made by the companies, providers and beneficiaries involved in a scam.
It's too early to credit the ZPICs for any particular case. “In essence, what the ZPIC is doing is reducing our workload,” Ogrosky says. “It reduces the number of requests we have to make. It allows us to extract the data in one database as opposed to multiple databases and trying to combine them.”
The government tallied a $1.7 billion drop in DME claims from Florida a year after the strike force hit the streets there in March 2007, and investigators say better data make it easier to look for new vulnerabilities that fraudsters might exploit.
David Glaser
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Lawyers who represent healthcare providers facing government investigations, lawsuits and prosecutions say the data Shangri-La promises new risks, costs and headaches for bona fide hospitals and physicians, not just criminal entrepreneurs in Miami and a few other cities. “Anyone who defends healthcare organizations knows that once they're looking at you, it's very hard to get them to go away,” says David Glaser, a shareholder in the law firm Fredrikson & Byron.
“In my experience, often the data are very simplistic,” Glaser says. He suggests as an example a physician who sees just a few patients a day and legitimately bills nearly all of them as Level 5, the highest level of care, for established patients. The anomalous coding distribution might look fraudulent in a claims analysis. “If your documentation doesn't support your fives—say you're not the best note-taker—you're going to spend a lot of money trying to convince the government everything is OK,” he says.
The government's better handle on claims data also is likely to change the dynamic when it comes time to negotiate settlements, says Hope Foster, chairwoman of a new healthcare enforcement defense group at the law firm Mintz Levin Cohn Ferris Glovsky & Popeo.
The first thing a defense lawyer does is challenge the data, Foster explains. The damages in civil cases or years in prison in criminal cases depend on the value of claims that are fraudulent or deemed otherwise inappropriate in the eyes of the federal False Claims Act. “How was the data obtained? Is it the right data? Is this the best data? Having a more trustworthy data system, that's going to change the way we settle cases.”
The feds, meanwhile, say the healthcare community should welcome the arrival of ZPICs and One PI, which Brandt describes as tools that will “help the good providers and get the bad guys out.” She emphasizes that it's important that organizations have aggressive compliance programs and thorough documentation to support their claims.
As Ogrosky puts it: “We're not playing some hide-and-seek game here; we're looking for people who are stealing from Medicare.”
A version of this story initially appeared in this week's edition of Modern Healthcare
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