Beyond the RACs: Beware false claim allegations
Watch for triggers of fraud and abuse
While the RAC audits could mean significant financial losses for your hospital, a fraud or abuse lawsuit could cost you more. A lot more, says Cheryl Wagonhurst, partner with Folley & Lardner LLP. Some of the "hottest" issues right now that you should be looking at are:
- lack of medical necessity;
- substandard care;
- billing for things that shouldn't be billed for (i.e., never events);
- subpar documentation;
- anti-kickback violations that lead to problems with quality of care (for example, paying off your highest admitters).
What quality managers should be able to do is spot a trigger and not just think of these types of issues only in terms of The Joint Commission or a potentially reportable event, she says. The false claims act, which was updated and expanded with the Fraud Enforcement and Recovery Act of 2009, needs to be front and center, she says. "[I]f there is a significant quality failure or a pattern of abuse or neglect or lack of medical necessity, the stuff that [quality managers] are directly involved in in terms of quality and patient care," that could trigger fraud and abuse action.
"When President Obama talks about eliminating waste in health care, that's what he's talking about. He's not talking about going after physicians for Stark abuses or anti-kickback abuses, but going after hospitals and other providers that are not proving appropriate quality care," Wagonhurst says.
"And so what he's going to do in those instances is use the Department of Justice and the Office of the Inspector General and all of the various enforcement arms that are responsible for the oversight of Medicaid to basically go in full force. And where providers are submitting a claim for services that are substandard or not medically necessary, the government is going to view that as a potential false claim."
She says often quality improvement staff and risk managers are "not getting it. They're just not making the connection, and as a result, they're not getting ahead of the curve. In other words, they should be the ones bringing these types of issues to administration. So administration can take the right steps and deal with these issues."
Being prepared for the various auditors such as the Recovery Audit Contractors (RACs) and the Medicaid Integrity Contractors (MICs), is important, but it does not get at, and certainly does not supplant, working to ward off any potential false claim, she says.
Look for patterns of medically unnecessary procedures or substandard care — not just with peer review, she says, but "a deep-dive assessment into the legal risks associated with quality of care." Ask yourself these questions, she advises:
- Is your peer review process really functioning to protect your providers and organization against legal risks?
- Are your utilization review processes in place to ensure cases that have problems aren't being overlooked?
- Is there appropriate management oversight from your medical staff and governing body to deal with physicians who are practicing the same as they have for 20-30 years?
"Because things have changed. The environment has changed, and with that change, these people have to change," Wagonhurst says. And she puts part of the onus on patients, particularly those who come in and insist on certain things. "You can't have a physician who fudges the paperwork in order to get something covered. That's just not appropriate. But that kind of stuff happens all the time. And that is the stuff that the government is committed to ferreting out and cleaning up."
Many hospitals are going with external physician advisor companies to review files and document but she says the best model she has seen is when hospitals invest in a chief medical officer.
"Whether you call it a physician advisor, a chief medical officer, I think the real key is that you have someone that is in-house, that is on the ground, and that you not use these contracted companies," she says. "Because I think there is so much resistance to bringing someone in from the outside who says, 'Well, this is what you need to do.'"