Fraud Waste and Abuse

Fraud Waste and Abuse

The Health Plan of San Mateo (HPSM) is committed to helping prevent, deter, and detect fraud, waste, and abuse (FWA) in our healthcare programs. To help eliminate FWA in our programs, HPSM relies in part on its plan partners, including network providers, in identifying and reporting suspected FWA.

This section of the Provider Manual seeks to help provide guidance for providers and other plan partners in identifying and reporting FWA to HPSM.

Definitions

Fraud

Fraud is generally defined as knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud any health care benefit program or to obtain by means of false or fraudulent pretenses, representations, or promises any of the money or property owned by, or under the custody or control of, any health care benefit program. (18 U.S.C. § 1347).  This includes an intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to oneself or another person. (Title 42 CFR 455.2; W&I Code Section 14043.1(i).)

Waste

Waste is overutilization of services or inappropriate utilization of services and misuse of resources that, directly or indirectly, result in unnecessary costs to the health care system, including the Medicare and Medi-Cal (Medicaid) programs. It is not generally considered to be caused by criminally or intentional actions, but by the misuse of resources.

Abuse

Abuse includes provider practices that are inconsistent with sound fiscal, business, or medical practices, and result in one or more of the following:

• Unnecessary costs to the health care system, including the Medicare and Medi-Cal (Medicaid) programs.
• Improper payment for services.
• Payment for services that fail to meet professionally recognized standards of care.
• Services that are medically unnecessary.

Abuse involves payment for items or services when there is no legal entitlement to that payment and the entity supporting HPSM (e.g., health care provider or supplier) has not knowingly and/or intentionally misrepresented facts to obtain payment.

Abuse cannot always be easily identified, because the difference between “abuse” and “fraud” depends on specific facts and circumstances, intent, prior knowledge, and available evidence, among other factors.

Examples

Fraud costs state and federal taxpayers a lot of money.  Below are types of fraud you may encounter.

Member/Beneficiary/Recipient

Most members are honest people who need quality health care; however, there are people who commit fraud or become involved in fraudulent schemes. The following are some types of possible member fraud:

• Recipient Exceeds Income or Asset Requirement: Occurs when a member does not report income or assets to their county worker.
• Identity Theft: Someone uses another person's personal information to get Medi-Cal or Medicare benefits. Sometimes the person whose identity was stolen is not aware until they begin to receive mail from either program.
• Drug Diversion: Altering a doctor’s prescription, going to multiple doctors to get more of the same drug, or selling drugs to others.

Provider

Most providers are honest in their billing practices and provide quality health care to their patients. However, a relatively small number of providers commit fraud directly or become involved in fraudulent schemes. The following are some types of known provider fraud:

• Capping: When an individual recruits and pays patients money or offers gifts in exchange to participate in the Medicare or Medi-Cal program. It is also illegal for an individual to receive payment or gifts to participate in either program.
• Balance Billing: A provider charging a Medicare or Medi-Cal beneficiary for the difference between HPSM’s reimbursement rate and the customary charge for the service.

Provider Billing and Coding Issues

Some of the most common coding and billing issues are:

• Billing for services not rendered.
• Billing for services at a rate that indicates the provider is an outlier compared with their peers.
• Billing for non-covered services using an incorrect CPT, HCPCS, and/or diagnosis code to have services covered.
• Ordering unnecessary lab tests.
• Dentists performing unnecessary teeth extractions on both adults and children.
• Medical supply companies billing for equipment and products that were neither ordered nor delivered.
• Billing for services that are performed by another provider.
• Up-coding.
• Modifier misuse. For example, modifiers 25 and 59.
• Unbundling.
• Billing for more units than rendered.
• Lack of documentation in the records to support the services billed.
• Services performed by an unlicensed provider but billed under a licensed provider’s name.
• Alteration of records to get services covered.
• Soliciting or receiving remuneration (in kind or in cash) in return for referring individuals, goods, or services.
• Employing or contracting with any excluded individual or entity for the provision of items or services that are reimbursable, directly or indirectly, by any federal health care program.

Monitoring Potential Fraud Waste and Abuse

HPSM uses a combination of claims editing software and weekly oversight reports and edits integrated with the claims adjudication system to monitor claims prior to payment to identify billing issues such as unbundling, double billing, and the inappropriate use of modifiers.

On a post-paid claim basis, HPSM uses software that reviews claims and flags potentially suspect billing activity. HPSM reviews providers identified by the system and determines the next course of action. Actions taken can include, but are not limited to, provider education on correct billing procedures, medical record requests to review clinical justification for services provided, and requests for overpayment reimbursement.

HPSM is required to report suspected FWA cases to several state and federal agencies, depending on which line of business is impacted. Agencies to be notified include the California Department of Health Care Services (DHCS), Department of Managed Health Care (DMHC), and the National Benefit Integrity Medicare Drug Integrity Contractor (NBI MEDIC). HPSM also reserves the right to notify law enforcement if it is deemed appropriate.

HPSM appreciates your understanding and cooperation in any investigation we may undertake as we do our part to safeguard state and federal healthcare dollars.

Reporting

If you suspect fraud, waste, or abuse with an HPSM member, service, or provider, you must report it to HPSM to investigate. Your actions can help to improve services and reduce costs for our members, customers, and plan partners.

To report suspected fraud, waste, or abuse, you can contact HPSM in one of these ways:

You may remain anonymous, if you prefer, by calling the Compliance Hotline.

All information received or discovered by HPSM’s Compliance Department will be treated as confidential, and the results of investigations will be discussed only with persons having a legitimate reason to receive the information (e.g., state, and federal authorities, HPSM legal counsel, HPSM clinical reviewers, and/or senior management).

You can also report FWA to the following agencies, depending on the program affected:

Medicare and Medi-Cal

To report to the OIG:

Medi-Cal

To report to the Bureau of Medi-Cal Fraud & Elder Abuse (BMFEA):

To report to the Department of Health Care Services (DHCS):

Resources

Fraud Waste and Abuse (FWA) Training

If you would like additional resources on preventing, detecting, and reporting FWA, please visit the Medicare Learning Network online at https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/ProviderCompliance.html

DHCS Helpful Hints and Resources

https://www.dhcs.ca.gov/individuals/Pages/ai_hints_res.aspx