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Government agencies, including the Health Care Financing Administration (HCFA) and the Department of Health and Human Services Office of Inspector General, often tout the dramatic reduction in Medicare’s improper payment rate over the last four years — from 14% of program expenditures or $23 billion in 1996 to just under 7% or $11.9 billion last year — as evidence the government’s war on health care fraud is paying dividends. Government and private sector experts say studying that statistic can help keep providers from becoming part of it.
Health care attorney Thomas Coons, of the Baltimore law firm Ober Kaler says the government can "slice and dice" these data in any manner, shape, or form to determine how providers compare in terms of their specialty, locality, or region. They can also determine the number of procedures and the utilization rate and whether there has been a spike that month or that year. "They can very easily take a snapshot of you that you would not believe," Coons asserts.
That’s the bad news. The good news is that most of these data are publicly available, and providers can use these same data to perform a self-examination, says Coons. "It is very important to periodically engage in the same self-examination using the same resources HCFA has," he explains.
According to Coons, providers can often limit their exposure by examining the government’s "data-rich" environment. He points out that the government regularly looks at provider-specific information including focused medical review reports, denial records, cost report data and provider billing files, and says that, wherever possible, providers should do the same.
In all, Coons cites 21 specific data elements the government examines, from new technologies and newer classified benefits to trend analysis of therapy providers and service frequency variation.
Understanding what to look for in the data also means understanding the type of violations the government is looking for, according to Coons. He lists no fewer than 25 examples of health care fraud, from incorrectly reporting a diagnosis or procedure and billing for services not rendered to billing for discharges in lieu of transfer and failure to refund credit balances in a timely fashion.
For example, to reduce cost-reporting problems, Coons says hospitals should look for consultant activity regarding maximization of costs and allocation of hospital costs to units that receive no benefit.
Once providers understand what the government is looking for and the data they are using to draw their conclusions, he says they should develop specific checklists of what to look for.
In the area of cost report fraud, Coons lists 16 potential problems ranging from incorrectly apportioning costs on cost reports and included costs for noncovered services to claiming depreciation methods not approved by Medicare and claiming interest expense for loans that have been repaid for an offset of interest income against the interest expense.
Coons’ checklist covers specific areas of the cost report in areas ranging from 21 nonallowable or nonreimbursable items and activities to the improper treatment of capital costs. Other specific areas highlighted by Coons include:
• manipulation of cost centers;
• allocation of physician time and overhead;
• credit balances;
• Medicare Secondary Payer issues;
• bad-debt claims.