A U.S. Justice Department official has chided the healthcare industry for not paying enough attention to the government's ongoing battle against Medicare fraud and abuse.
Speaking at a managed-care compliance conference in Washington last week, John Bentivoglio, the department's special counsel on healthcare fraud, warned the industry to heed recent reports from HHS' inspector general's office.
Those reports include three released since March that identify new areas ripe for fraud, including upcoding for certain diagnoses and improperly discharging and readmitting patients (May 31, p. 25).
"I was struck by how many (compliance officers) had not seen the inspector general's report on septicemia (involving upcoding) while at another conference recently," Bentivoglio told the managed-care crowd. "The report said that cases had been referred for further investigation. That's a hint that there could be fraud and abuse there."
One reason the government launched nationwide initiatives like its "72-hour window" project, which looked at how hospitals billed for diagnostic services within 72 hours of an admission, was because providers were ignoring the inspector general's numerous reports, Bentivoglio said. "When you see a report has come out, pay attention," he said. "You should ask yourself, 'Are we doing anything like that?' "
Louis Saccoccio, general counsel at the American Association of Health Plans, said the trade group takes compliance seriously and keeps a close watch on all materials released by various government agencies.
"Whenever anything comes out that's relevant, we get that right out to our members, either via our Web site or through educational programs like our compliance conference coming up in July," Saccoccio said.
The Justice Department is investigating possible managed-care fraud cases involving:
* Delays in reporting disenrollment figures to receive more capitation fees from Medicare.
* The embezzlement of capitation fees by plans or their subcontractors.
* Kickbacks paid to specialists to keep referrals low.
Bentivoglio's warning comes at a time when many providers and health plan groups are busy fretting about their finances, not fraud.
"Postponing compliance until you complete that merger or acquisition is fraught with danger," Bentivoglio said.
The government's interest in Medicare managed-care fraud is not new (March 2, 1998, p. 2). But as more beneficiaries move into health plans from fee-for-service Medicare, managed care is attracting scrutiny-and criticism-like never before.
Managed-care plans should worry about more than just the government. A number of whistleblower lawsuits are working their way through the legal system, according to James Sheehan, assistant U.S. attorney in Philadelphia, who has become a leader in federal fraud-fighting.
The whistleblowers, who use the False Claims Act to file lawsuits under seal on the government's behalf, include plan employees, competitors and even patients, Sheehan said.
"A flood of (whistleblower) lawsuits will follow the first few, as we've seen in other areas of fraud," he said.
Meanwhile, HHS' inspector general is trying to help health plans comply with Medicare's myriad rules and regulations.
Earlier this month, the inspector general released draft compliance guidelines for the Medicare managed-care industry.
The guidelines address five areas:
* Marketing materials and personnel, including the use of physicians as marketing agents.
* Cherry-picking, or the selection of only the healthiest beneficiaries.
* The use of influence to cause disenrollment from the plan.
* Quality of care, including underuse of covered services.
* Data collection and submission.
"This document addresses many policies pertaining to care for beneficiaries, not just billing," said D. McCarty Thornton, chief counsel to the inspector general. "It's the most significant of all the guidelines issued so far because it addresses care directly."
The inspector general's office also plans to examine plans' roles in "patient dumping" cases. Patient dumping, or the practice of refusing emergency treatment to patients who lack the ability to pay, is becoming an increasing problem, in part because many plans require pre-authorization before they will pay for emergency services, Thornton said.
"It is not appropriate for hospitals to request, or for plans to require, prior authorization for emergency services," he said. Last year the agency settled 53 patient dumping cases, and it is already close to that number so far this year.
The inspector general is accepting public comments on the proposed managed-care guidelines through July 15. Final guidelines, which will be voluntary, are due out in late summer or early fall, Thornton said.