Clock is ticking on managed care crackdown
Expect the Justice Department to unleash its first managed care lawsuits in a year or so, says the government’s guru on health care fraud. The suits will focus on such issues as quality of care and patient choice, says Jim Sheehan, JD, chief of the civil division for the Eastern District of Pennsylvania.
Don’t be lulled by the fact that rumors of enforcement actions have been circulating for years, warns Sheehan. "The DRG [diagnosis related group] cases took us four years," he adds. "We’ve been looking at managed care for three."
Sheehan, who’s become both the theoretician and the bogeyman of the federal war on health care fraud, says he’s concerned that patients are not getting "voice, choice, and exit." That is, patients should have some control over their care and the ability to pick and reject providers. Sheehan is also focusing on quality of care and the question of whether HMOs are delivering promised services. His avenue of attack: Accepting capitated payments without delivering services is a false claim. "If I incur an obligation that I have no intention of paying, that’s fraud," he adds. Here are some real-life examples of dubious practices that Sheehan cites:
- An HMO closed its switchboard at night and left a recorded message that told patients to check themselves into a hospital emergency room.
- Some HMOs deliberately slow claims processing for providers in order to boost their bottom line and stock price. One scam is to constantly update the claims processing software, which will create delays of three to six months, says Sheehan. Another is to lay off the claims processing department, subcontract the work, and then keep replacing contractors.
- Some HMOs set impossibly high quotas for claims processing that encourages employees to throw away claims.
Sheehan warns that there are a variety of tools prosecutors can use to prove managed care fraud. These include HMO marketing materials, utilization records, bonuses and other utilization awards to providers, malpractice suits, and data from the Washington, DC-based National Committee for Quality Assurance.
But Don’t panic yet, says attorney Paul DeMuro, JD, Latham and Watkins in San Francisco. The government will be looking for a pattern that shows an intent to deny care, rather than an HMO "that simply believes its protocol is better," he adds.
What’s key for HMOs is making clear that they give doctors the ultimate authority to decide treatment, DeMuro says. It’s also important to show that all patients are treated equally across demographic groups and regions.