What Should Health Care Organizations Do to Reduce Billing Fraud and Abuse?

K. Drabiak and J. Wolfson

AMA J Ethics. 2020;22(3):E221-231.
doi: 10.1001/amajethics.2020.221.

Abstract

Whether physicians are being trained or encouraged to commit fraud within corporatized organizational cultures through contractual incentives (or mandates) to optimize billing and process more patients is unknown. What is known is that upcoding and misrepresentation of clinical information (fraud) costs more than $100 billion annually and can result in unnecessary procedures and prescriptions. This article proposes fraud mitigation strategies that combine organizational cultural enhancements and deployment of transparent compliance and risk management systems that rely on front-end data analytics.

Fraud in Health Care

Growth in corporatization and profitization in medicine, insurance company payment rules, and government regulation have fed natural proclivities, even among physicians, to optimize profits and reimbursements (Florida Department of Health, oral communication, September 2019). According to the most recent Health Care Fraud and Abuse Control Program Annual Report, in one case a management company “pressured and incentivized” dentists to meet specific production goals through a system that disciplined “unproductive” dentists and awarded cash bonuses tied to the revenue from procedures—including many allegedly medically unnecessary services—they performed. This has come at a price: escalating costs, fraud and abuse, medically unnecessary services, adverse effects on patient safety, and physician burnout.

Breaking the cycle of bad behaviors that are induced in part by financial incentives speaks to core ethical issues in the practice of medicine that can be addressed through a combination of organizational and cultural enhancements and more transparent practice-based compliance and risk management systems that rely on front-end data analytics designed to identify, flag, and focus investigations on fraud and abuse at the practice site. Here, we discuss types of health care fraud and their impact on health care costs and patient safety, how this behavior is incentivized and justified within current and evolving medical practice settings, and a 2-pronged strategy for mitigating this behavior.

The info is here.

Cheyenne Psychologist And His Wife Sentenced To 37 Months In Prison For Health Care Fraud

Department of Justice
U.S. Attorney’s Office
District of Wyoming
Press Release of December 4, 2018

John Robert Sink, Jr., 68, and Diane Marie Sink, 63, of Cheyenne, Wyoming, were sentenced on December 3, 2018, to serve 37 months in prison for making false statements as part of a scheme to fraudulently bill Wyoming Medicaid for mental health services, which were never provided, announced United States Attorney Mark A. Klaassen. The Sinks, who are married, were also ordered to pay over $6.2 million in restitution to the Wyoming Department of Health and the United States Department of Health and Human Services, and to forfeit over $750,000 in assets traceable to the fraud, including cash, retirement accounts, vehicles, and a residence.

The Sinks were indicted in March 2018 by a federal grand jury for health care fraud, making false statements, and money laundering. At all times relevant to the indictment, John and Diane Sink operated a psychological practice in Cheyenne. John Sink, who was a licensed Ph.D. psychologist, directed mental health services. Diane Sink submitted bills to Wyoming Medicaid and managed the business and its employees. The Sinks provided services to developmentally disabled Medicaid beneficiaries and billed Medicaid for those services.

Between February 2012 and December 2016, the Sinks submitted bills to Wyoming Medicaid for $6.2 million in alleged group therapy. These bills were false and fraudulent because the services provided did not qualify as group therapy as defined by Wyoming Medicaid. The Sinks also falsely billed Medicaid for beneficiaries who were not participating in any activities, and therefore did not receive any of the claimed mental health services. When Wyoming Medicaid audited the Sinks in May 2016, the Sinks did not have necessary documentation to support their billing, so they ordered an employee to create backdated treatment plans. The Sinks then submitted these phony treatment plans to Wyoming Medicaid to justify the Sinks’ false group therapy bills, and to cover up their fraudulent billing scheme.

The pressor is here.

Doctor Tells U.S. Judge He Created Fake L.I.R.R. Injury Claims

By THE ASSOCIATED PRESS
Published: January 18, 2013

An orthopedist who was accused of taking cash payments for fake diagnoses and billing health insurance companies for unnecessary medical treatment in widespread disability fraud involving Long Island Rail Road workers pleaded guilty on Friday to conspiracy charges.

The doctor, Peter J. Ajemian, admitted that between the late 1990s and 2008 he invented “narratives” to justify illness and injury claims for hundreds of workers seeking to retire on disability.

The employees “were not in fact disabled and could have continued working in their railroad jobs, as they had no complaint right up to the time of their retirement date,” Dr. Ajemian told a judge in Federal District Court in Manhattan.

Prosecutors said that Dr. Ajemian, 63, received up to $1,200 for each of the fake assessments, as well as millions of dollars in health insurance payments. His patients received more than $90 million in disability benefits.

Dr. Ajemian was among 32 defendants who have been arrested in the past two years.

Three other retirees also pleaded guilty this week, bringing the number of guilty pleas in the case to 21.

Sentencing for Dr. Ajemian was set for May 24.

The story is here.

Contracts Awarded Despite Inquiry

By Colleen Heild
Journal Investigative Reporter
Originally published on Jan 13, 2013
First of two parts

A Roswell, N.M.-based psychiatric services firm landed state Department of Health contracts that allow charges of up to $2,000 a day, even though it was under investigation for alleged Medicaid fraud at another state agency.

The contracts between the Department of Health and New Mexico Psychiatric Services signed last summer permit the company to bill up to $623,900 to provide on-call or temporary services to state-run health facilities.

They include the Sequoyah Adolescent Treatment Center in Albuquerque, a 36-bed residential treatment center for violent and mentally ill youth.

At the time the contacts were awarded last year, the company was facing allegations of Medicaid billing fraud at the state Human Services Department. Its payments for services for HSD have been suspended pending the outcome of the inquiry.

A top health department official said in an interview last month that he didn’t know New Mexico Psychiatric Services was under investigation at the time he helped evaluate proposals for the so-called “locum tenens” psychiatric services last April.

But in a follow-up response last week, the agency’s spokesman said others in the agency did know and the inquiry by the state Attorney General’s Office wasn’t a “determinative” factor.

DOH spokesman Kenny C. Vigil told the Journal that the president of New Mexico Psychiatric Services, Dr. Babak Mirin, made a “self disclosure” about the investigation before any contracts were signed last year.

Asked whom Mirin had informed at the DOH and when, Vigil responded: “I don’t have that information.”

The Department of Health and the Human Services Department are separate state agencies, albeit with some overlapping missions involving assistance to New Mexicans.

The Human Services Department, which administers behavioral health services, notified New Mexico Psychiatric Services nearly a year ago of the billing fraud inquiry by the AG’s Medicaid Fraud Control Unit.

Mirin’s attorney, David H. Johnson, told the Journal in an email last week that the company has been cooperating with the AG’s investigation “and is committed to the repayment of any overpayments that it may have received.

“At this point there has only been an allegation of billing fraud,” Johnson’s email stated. “Fraud has not been established.”

The entire story is here.