Rooting Out Fraud
On May 6, Florida-based Baptist Health System Inc. was the latest in a long line of organizations to resolve a federal lawsuit accusing it of violating the False Claims Act (FCA).
Baptist Health System agreed to pay $2.5 million to resolve allegations in the case brought by a former patient referral coordinator at the health care center’s neurology practice, a lawsuit that was partially joined by the federal government.
Although health care organizations are often the focus of FCA litigation, the law, which encourages whistleblowers to expose an organization’s fraudulent practices, affects all organizations.
“Everybody thinks that it’s a health care issue, but it’s not,” said Keith Lavigne, senior vice president, professional risk, ACE USA. “The law affects any company or entity interacting with the government. … It doesn’t discriminate by industry so everyone has to adhere to this act.”
In fiscal 2013, the U.S. Department of Justice (DOJ) recovered $3.8 billion in settlements and judgments from civil cases involving fraud under the FCA. The prior fiscal year, the amount was $4.9 billion. Since January 2009, total recoveries under the FCA totaled $17 billion.
“As in previous years, the largest recoveries [in fiscal 2013] related to health care fraud, which reached $2.6 billion,” according to the DOJ. “Procurement fraud [related primarily to defense contracts] accounted for another $890 million — a record on that area.”
Other significant fraud recoveries included a $45 million settlement with Japan-based Toyo Ink S.C. Holdings Co. Ltd. and its affiliates related to allegations it misrepresented the country of origin on customs documents, and a $10 million settlement with Education Holdings Inc. (formerly The Princeton Review Inc.) related to allegations the company fabricated attendance records on tutoring funded by a federal grant.
Lavigne said the number of actions filed due to the FCA’s whistleblower provisions has escalated from about 380 cases in 1987 to 846 cases in 2013. Individuals who file civil suits are eligible to receive up to 15 percent to 30 percent of the recovery.
“It’s an amazing incentivizing of the workforce,” he said, noting the fraudulent activities most often found are inflating bills for services and fabricating procedures.
Health care organizations have been disproportionately affected by the FCA because of several government initiatives to crack down on fraud and abuse in that sector, he said.
Those initiatives include the Health Care Fraud Prevention and Enforcement Action Team, started in 2009 by the U.S. Department of Health and Human Services and the DOJ; the Medicare Fraud Strike Force, launched in 2007; and $350 million set forth as part of the Patient Protection and Affordable Care Act to fight fraud and abuse.
The ACA’s expansion of third-party audits by Recovery Audit Contractors (RAC) increases the exposures — and compliance requirements — of health care organizations, Lavigne said.
It’s a burden, a cost and a distraction, he said. And it requires organizations to develop comprehensive self-audit programs.
A compliance program should include internal monitoring and auditing, implementing and enforcing compliance and practice standards, designating ownership of the process, conducting training, and responding to reported offenses, he said.
“If they are not looking at it, they are neglecting their enterprise risk management,” Lavigne said. “If an institution doesn’t have a robust compliance program set up, it’s a real risk.”
In the Florida case, a January 2012 lawsuit filed by the whistleblower alleged the neurology practice at Baptist Health System Inc. intentionally misdiagnosed patients in order to bill Medicare for expensive treatment and medications.
The health center was accused of actively trying to cover up the alleged fraud when it became aware of it, rather than inform government authorities.
Kirk Chapman, a partner at Milberg LLP, which represented Verchetta Wells, the whistleblower, said the case is an example of how the FCA “empowers Americans to help fight fraud on the government and American taxpayers, no matter how big or small the fraud may be.”
The case involved Milberg as well as the DOJ and Middle District of Florida U.S. Attorney’s office.
ICD-10 Implementation on Hold Until 2015
Workers’ comp payers that have invested in the impending new diagnostic codes are being forced to regroup. A law signed by President Obama delays implementation until October 2015, at least.
The International Classification of Diseases 10th edition was scheduled to take effect this October. But legislation that addresses the Medicare sustainable growth rate includes a provision that prohibits the Department of Health and Human Services from implementing the updated coding for another year.
“We’re all walking around here not really sure if this is going to happen. I’m confident it will, whether it is ICD-10 or 11. We have to change,” said Michele Hibbert-Iacobacci, vice president of information and support for Mitchell International.
Hibbert-Iacobacci spoke to Workers’ Compensation Report from Washington, D.C., where she was attending the American Health Information Management Association’s ICD-10/Procedure Coding System and Computer-assisted Coding Summit, which had been planned before the delay was announced. According to the association’s website, panelists at one of the early sessions referred to the code set’s delay as “ICD When.”
Even though workers’ comp is not a covered entity under HIPAA and therefore not required to transition to ICD-10, experts such as Hibbert-Iacobacci have strongly advised payers to do so. As she explained, it is in the best interests of workers’ comp stakeholders to comply.
“The fact of the matter is the doctors do [have to comply]. Providers are covered under HIPAA regardless whether they bill for comp or general health,” she said. “It would be the most ridiculous thing [for them] to speak two different languages.”
Many providers’ offices had already begun the expensive transition from ICD-9 to ICD-10. “The small practice, which is what we see a lot of in workers’ comp, is truly affected,” Hibbert-Iacobacci said. “Many of them switched.”
Some providers have been using dual systems in preparation for the change. Switching from one coding system to another costs an estimated billions of dollars, especially for training.
“Training was set for three months leading up to the [implementation] date,” Hibbert-Iacobacci said. “Some have started preliminary training. They will lose that information. They will have to do it over again or revisit it somehow.”
Hibbert-Iacobacci said annual updates to the ICD-9 codes were not done this year due to the anticipated implementation of ICD-10. Now those code sets will need to be updated.
With workers’ comp regulated at the state level, many jurisdictions have adopted legislative or administrative changes to allow for the transition from ICD-9 to ICD-10 codes. They are now in a wait-and-see mode.
Despite the costs and frustrations imposed by the delay, Hibbert-Iacobacci believes the change is inevitable and will be highly beneficial. For one thing, she says the new codes may help determine causation.
“There are encounter codes added to the injury codes, [including] the initial, subsequent, or sequela migration of injury,” Hibbert-Iacobacci said. “In workers’ comp we have to pay for things related to accidents … you should not see a ‘subsequent’ for an accident or it means there is a preexisting injury.”
Achieving More Fluid Case Management
Risk management practitioners point to a number of factors that influence the outcome of workers’ compensation claims. But readily identifiable factors shouldn’t necessarily be managed in a box.
To identify and discuss the changing issues influencing workers’ compensation claim outcomes, Risk & Insurance®, in partnership with Duluth, Ga.-based Healthcare Solutions, convened an April roundtable discussion in Philadelphia.
The discussion, moderated by Dan Reynolds, editor-in-chief of Risk & Insurance®, featured participation from four tenured claims management professionals.
This roundtable was ruled by a pragmatic tone, characterized by declarations on solutions that are finding traction on many current workers’ compensation challenges.
The advantages of face-to-face case management visits with injured workers got some of the strongest support at the roundtable.
“What you can assess from somebody’s home environment, their motivation, their attitude, their desire to get well or not get well is easy to do when you are looking at somebody and sitting in their home,” participant Barb Ritz said, a workers’ compensation manager in the office of risk services at the Temple University Health System in Philadelphia.
Telephonic case management gradually replaced face-to-face visits in many organizations, but participants said the pendulum has swung back and face-to-face visits are again more widely valued.
In person visits are beneficial not only in assessing the claimant’s condition and attitude, but also in providing an objective ear to annotate the dialogue between doctors and patients.
“Oftentimes, injured workers who go to physician appointments only retain about 20 percent of what the doctor is telling them,” said Jean Chambers, a Lakeland, Fla.-based vice president of clinical services for Bunch CareSolutions. “When you have a nurse accompanying the claimant, the nurse can help educate the injured worker following the appointment and also provide an objective update to the employer on the injured worker’s condition related to the claim.”
“The relationship that the nurse develops with the claimant is very important,” added Christine Curtis, a manager of medical services in the workers’ compensation division of New Cumberland, Pa.-based School Claims Services.
“It’s also great for fraud detection. During a visit the nurse can see symptoms that don’t necessarily match actions, and oftentimes claimants will tell nurses things they shouldn’t if they want their claim to be accepted,” Curtis said.
For these reasons and others, Curtis said that she uses onsite nursing.
Roundtable participant Susan LaBar, a Yardley, Pa.-based risk manager for transportation company Coach USA, said when she first started her job there, she insisted that nurses be placed on all lost-time cases. But that didn’t happen until she convinced management that it would work.
“We did it and the indemnity dollars went down and it more than paid for the nurses,” she said. “That became our model. You have to prove that it works and that takes time, but it does come out at the end of the day,” she said.
The ultimate outcome
Reducing costs is reason enough for implementing nurse case management, but many say safe return-to-work is the ultimate measure of a good outcome. An aging, heavier worker population plagued by diabetes, hypertension, and orthopedic problems and, in many cases, painkiller abuse is changing the very definition of safe return-to-work.
Roundtable members were unanimous in their belief that offering even the most undemanding forms of modified duty is preferable to having workers at home for extended periods of time.
“Return-to-work is the only way to control the workers’ comp cost. It’s the only way,” said Coach USA’s Susan LaBar.
Unhealthy households, family cultures in which workers’ compensation fraud can be a way of life and physical and mental atrophy are just some of the pitfalls that modified duty and return-to-work in general can help stave off.
“I take employees back in any capacity. So long as they can stand or sit or do something,” Ritz said. “The longer you’re sitting at home, the longer you’re disconnected. The next thing you know you’re isolated and angry with your employer.”
“Return-to-work is the only way to control the workers’ comp cost. It’s the only way,” said Coach USA’s Susan LaBar.
Whose story is it?
Managing return-to-work and nurse supervision of workers’ compensation cases also play important roles in controlling communication around the case. Return-to-work and modified duty can more quickly break that negative communication chain, roundtable participants said.
There was some disagreement among participants in the area of fraud. Some felt that workers’ compensation fraud is not as prevalent as commonly believed.
On the other hand, Coach USA’s Susan LaBar said that many cases start out with a legitimate injury but become fraudulent through extension.
“I’m talking about a process where claimants drag out the claim, treatment continues and they never come back to work,” she said.
Social media, as in all aspects of insurance fraud, is also playing an important role. Roundtable participants said Facebook is the first place they visit when they get a claim. Unbridled posts of personal information have become a rich library for case managers looking for indications of fraud.
“What you can assess from somebody’s home environment, their motivation, their attitude, their desire to get well or not get well is easy to do when you are looking at somebody and sitting in their home,” said participant Barb Ritz.
As daunting as co-morbidities have become, roundtable participants said that data has become a useful tool. Information about tobacco use, weight, diabetes and other complicating factors is now being used by physicians and managed care vendors to educate patients and better manage treatment.
“Education is important after an injury occurs,” said Rich Leonardo, chief sales officer for Healthcare Solutions, who also sat in on the roundtable. “The nurse is not always delivering news the patient wants to hear, so providing education on how the process is going to work is helpful.”
“We’re trying to get people to ‘Know your number’, such as to know what your blood pressure and glucose levels are,” said SCS’s Christine Curtis. “If you have somebody who’s diabetic, hypertensive and overweight, that nurse can talk directly to the injured worker and say, ‘Look, I know this is a sensitive issue, but we want you to get better and we’ll work with you because improving your overall health is important to helping you recover.”
The costs of co-morbidities are pushing case managers to be more frank in patient dialogue. Information about smoking cessation programs and weight loss approaches is now more freely offered.
Managing constant change
Anyone responsible for workers’ compensation knows that medical costs have been rising for years. But medical cost is not the only factor in the case management equation that is in motion.
The pendulum swing between technology and the human touch in treating injured workers is ever in flux. Even within a single program, the decision on when it is best to apply nurse case management varies.
“It used to be that every claim went to a nurse and now the industry is more selective,” said Bunch CareSolutions’ Jean Chambers. “However, you have to be careful because sometimes it’s the ones that seem to be a simple injury that can end up being a million dollar claim.”
“Predictive analytics can be used to help organizations flag claims for case management, but the human element will never be replaced,” Leonardo concluded.