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.
Risk Management Is the Natural Owner of Compliance
With the adoption of Enterprise Risk Management (ERM), many organizations have already begun to include compliance risks as part of their organization’s risk management portfolio. However, even if the organization has not yet climbed aboard the ERM bandwagon, risk managers should be actively supporting, if not directing, their organization’s compliance efforts in several key areas, namely, interdepartmental risks.
After all, the compliance challenges in most organizations will not be those that land neatly in one department. Dining services managers will be on top of sanitation regulations; comptrollers will file their taxes.
No, the greatest compliance challenges are those that cross division and department lines.
Take a look at some of the compliance requirements that prove challenging to institutions of higher education.
• Title IX: Which prohibits discrimination on the basis of sex, covers not only equity in sports but also sexual assault and misconduct. Consequently, this impacts nearly every division of the institution.
• Americans with Disabilities Act (ADA): Its related laws and regulations impact academics, student life, facilities, IT, human resources, admissions, athletics and a multitude of other departments.
• Export Controls: A mishmash of laws that similarly effects any department involved with academics, research, technology, and travel.
• Records Retention Policy: Required under the tax form 990, covers every division and department and has additional privacy and security implications.
“…the compliance challenges in most organizations will not be those that land neatly in one department.”
Institutions traditionally find it difficult to manage compliance requirements such as these because there is no natural “owner” of the requirement. It is here that risk managers are ideally situated to help their institutions by gathering together individuals from the affected departments into a committee or task force.
Together, they can begin to create a shared management process for the institution. In the absence of hierarchical authority, committees and task forces can wield significant influence, especially if appointed by the president or board.
Furthermore, many compliance requirements are a natural fit within a risk management portfolio because they address insured risks. Compliance with anti-discrimination laws (like Title IX and ADA) is a perfect example, as acts of discrimination may be insured through educators’ or employers’ legal liability policies.
Other compliance matters may directly affect the essential identity of the institution. For instance, if an institution violates the regulations on political speech, it could lose its non-profit status and suffer reputational damages.
While it is impractical for a risk manager to be on top of every regulation that an institution is required to be in compliance with (they number in the hundreds) it is important that the risk manager be a leader in compliance matters that, when not addressed, can directly impact insurance and claims.
Offer to help organize a compliance effort. Make sure to (successfully) follow though.
You don’t have to be a subject expert to do this! Your results can showcase risk management services in the institution, reduce risk, and create a template for your next compliance project.
Medication Monitoring Achieves Better Outcomes
There are approximately three million workplace injuries in any given year. Many, if not the majority, involve the use of prescription medications and a significant portion of these medications is for pain. In fact, prescription medications are so prevalent in workers’ compensation that they account for 70% of total medical spend, with roughly one third being Schedule II opioids (Helios; NCCI; WCRI; et al.). According to the U.S. Drug Enforcement Administration (DEA), between the years of 1997 and 2007, the daily milligram per person use of prescription opioids in the United States rose 402%, increasing from an average of 74 mg to 369 mg. The Centers for Disease Control and Prevention (CDC) reports that, in 2012, health care providers wrote 259 million prescriptions—enough for every American adult to have a bottle of pills—and 46 people die every day from an overdose of prescription painkillers in the US. Suffice to say, the appropriate use of opioid analgesics continues to be a serious issue in the United States.
Stakeholders throughout the workers’ compensation industry are seeking solutions to bend the curve away from misuse and abuse and these concerning statistics. Change is happening: The American College of Occupational and Environmental Medicine (ACOEM) and the Work Loss Data Institute have published updated guidelines to promote more clinically appropriate use of opioids in the treatment of occupational injuries. State legislatures are implementing and enhancing prescription drug monitoring programs (PDMPs). The Food and Drug Association (FDA) is rescheduling medications. Pharmaceutical manufacturers are creating abuse-deterrent formulations. Meanwhile payers, generally in concert with their pharmacy benefit manager (PBM), are expending considerable effort to build global medication management programs that emphasize proactive utilization management to ensure injured workers are receiving the right medication at the right time.
A variety of factors can still influence the outcome of a workers’ compensation claim. Some are long-recognized for their affect on a claim; for example, body part, nature of injury, state of jurisdiction, and regulatory policy. In contrast, prescribing practices and physician demographics are perhaps a bit unexpected given the more contemporary data analysis showing their influence on outcomes. Such is the case for medication monitoring. Medication monitoring tools promote patient safety, confirm adherence, and identify potential high-risk, high-cost claims. Three of the more common medication monitoring tools include:
- Urine Drug Testing (UDT) is an analysis of the injured worker’s urine that detects the presence or absence of a specified drug. Although it is not a diagnosis, UDT results are generally a reliable indicator of what is present (and what is not) in the injured body worker’s system. The knowledge gained through the testing helps to minimize risks for undesired consequences including misuse, abuse, and diversion of opioids. With this information in hand, adjustments to the medication therapy regimen or other intervention activities can occur. UDT can also be an agent of positive change, as monitoring often leads to behavior modification, whether in direct response to an unexpected testing result or from the sentinel effect of knowing that medication use is being monitored.
- Medication Agreements or “Pain Contracts” signed by the injured worker and their prescribing doctor serve as a detailed and well-documented informed consent describing the risks and benefits associated with the use of prescription pain medications. Medication agreements help the prescribing doctor set expectations regarding the patient’s adherence to the prescribed medication therapy regimen. They serve as a means to facilitate care and provide for a way to document mutual understanding by clearly delineating the roles, responsibilities, and expectations of each party. Research also suggests that medication agreements promote safety and education as injured workers learn more about their therapy regimen, its risks, and benefits.
- Pill Counts quantify adherence by comparing the number of doses remaining in a pill bottle with the number of doses that should remain based on prescription instructions. Most often, physicians request pill counts at random intervals or the physician may ask the injured worker to bring their medication to all appointments. As a monitoring tool, pill counts can be useful in confirming proper use, or conversely, diversion activities.
On a stand-alone basis, these tools rank high on individual merit. When used together as part of a consolidated medication management approach, their impact escalates quite favorably. The collective use of UDT, Medication Agreements, and pill counts enhance decision-making, eliminating gaps in understanding. Their use raises awareness of potential high-risk, high-cost situations. Moreover, when used in concert with a collaborative effort on the part of the payer, PBM, physician, and injured worker, they can improve communication and align objectives to mitigate misuse or abuse situations throughout the life of a claim.
Medication monitoring can achieve better outcomes
The vast majority of injured workers use medications as directed. Unfortunately, situations of misuse and abuse are far too common. Studies show a growing trend of discrepancies between the medication prescription and actual medication-regimen adherence when it comes to claimants on opioid therapy (Health Trends: Prescription Drug Monitoring Report, 2012). In response, payers, working alongside with their PBM and other stakeholders, are deploying medication monitoring tools with greater frequency to verify the injured worker is appropriately using their medications, particularly opioid analgesics. The good news is these efforts are working. Forty-five percent of patients with previously demonstrated aberrant drug-related behaviors were able to adhere to their medication regimens after management with drug testing or in combination with signed treatment agreements and multispecialty care (Laffer Associates and Millennium Research Institute, October 2011).
In our own studies, we have similarly found that clinical interventions performed in conjunction with medication monitoring tools such as UDT reduces utilization of high-risk medications in injured workers on chronic opioid therapy. Results showed there was a decrease in all measures of utilization, driven primarily by opioids (32% decrease) and benzodiazepines (51% decrease), as well as a 26% reduction in total utilization of all medications, regardless of drug class. This is proof positive that medication monitoring can be useful in achieving better outcomes.