LegalEase: Get pre-authorizations from MCOs with OIG’s help

By Elizabeth E. Hogue, Esq.
Burtonsville, MD

Home care providers still are struggling to obtain authorizations from managed care organizations (MCOs) for medically necessary and appropriate care.

MCOs may bear the risk of any legal liability associated with failure to provide medically necessary and appropriate care, especially when providers protest such adverse payment decisions.

Now, there is an additional avenue for staff to pursue to obtain authorizations for medically necessary and appropriate care. Specifically, the Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services, the primary enforcer of fraud and abuse prohibitions, has indicated that it will pursue MCOs more aggressively for violations of the False Claims Act when they fail to provide needed care or provide substandard care for patients.

The False Claims Act is a federal statute, so it applies to MCOs all over the country that provide services to Medicare and Medicaid patients. It also applies to MCOs that provide services to patients of other state and federal health care programs.

Defining fraudulent billing

Generally, the act says that anyone who writes down something on a piece of paper that is not true and sends it to the federal government to get paid has engaged in fraud.

The OIG also has indicated that when providers submit claims for care rendered to patients to the government, providers promise that the care was reasonable and necessary. If the government subsequently determines that the care does not meet these standards, it is a false claim even though everything written on the claim form is true.

For example, such a claim occurs when providers are ordered by physicians to put betadine on patients’ pressure ulcers. Treatment of pressure ulcers with Betadine is no longer considered to be within applicable standards of care for wound care.

Consequently, claims that indicate staff applied Betadine to patients’ pressure ulcers are false claims, even though everything written on the claim form is true.

Home health staff members should not hesitate to point out to the representatives of MCOs that provision of substandard or inappropriate care for patients may be fraudulent. Perhaps, the clearest example occurs when providers are caring for fee-for-service Medicare patients who elect to join a Medicare MCO. Patients may be receiving a variety of types of supplies and equipment.

The company has been routinely paid for these services. Although there are no changes in the patient’s clinical condition, the MCO denies authorization for further supplies and equipment and/or drastically reduces them. This is a relatively clear-cut example of substandard care.

Agencies should not hesitate to make the argument that inappropriate services and substandard care are violations of the False Claims Act. MCOs worth their salt will sit up and take such observations from providers seriously.

[A complete list of Elizabeth Hogue’s publications is available by contacting: Elizabeth E. Hogue, Esq., 15118 Liberty Grove, Burtonsville, MD 20866. Telephone: (301) 421-0143. Fax: (301) 421-1699. E-mail: ehogue5@comcast.net.]