AHIP TRAINING Medicare Fraud, Waste, and Abuse Training

Pharmacy benefits manager

**A company that administers the prescription drug benefit program of a health plan or employer. **PBMs process and pay prescription drug claims and are often responsible for creating and updating formularies. **PBMs buy medications in large quantities from drug manufacturers and are therefore able to obtain and offer discounts.

AUDIT

**A methodical examination and review of data or processes with the purpose of verifying the data's accuracy or whether established processes are in place or are properly followed.

Examples of False claims

**A pharmacy consistently bills a MA plan for more pills than are actually dispensed to the plan's enrollees. **A physician knowingly submits claims for services never provided to Medicare enrollees.

Special investigation unit

**A unit of a health plan (often separate from the compliance office) dedicated to combating FWA. **It is frequently staffed by former law enforcement personnel, such as veterans of the FBI. **SIUs have traditionally focused their investigations on third-party claims submitted to health plans. **In the case of MA and Part D plans, however, the scope of SIU investigations is likely to include identification of suspected FWA committed by subcontractors involved in the delivery of the MA or PDP benefits.

FWA Training: A compliance program component

**ALL Medicare plans are required to have robust programs to assure compliance by plan employees an subcontractors with all applicable laws, regulations and program guidance. **One required component of a compliance program is a FWA program to identify and address issues of compliance with FWA. **It is important to remember that ALL Medicare plan sponsor employees and subcontractors are responsible for complying with all relevant Medicare requirements, even if lack of compliance may not be viewed as FWA,

Defining Fraud: A Closer look

**According to the health care fraud criminal statute Healthcare fraud is: knowingly and willfully executing, or attempting to execute, a scheme or artifice, to defraud any healthcare 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 benefit program" **Healthcare fraud can result in civil and criminal penalties that include fines, monetary damages, and even imprisonment. **Additionally, there is a penalty of up to 20 years in prison or life in prison if the violation resulted in a person's death.

Examples of Fraud by Agents and Brokers

**Agents and brokers involved in the sale of Medicare plans can also commit fraud. Here are some examples of actions dishonest agents might engage in to fraudulently earn sales commission. *An agent completes an application for a Part D plan for a Medicare beneficiary w/o the beneficiaries knowledge. *An agent visits a nursing home, copies down the names of Medicare beneficiaries living there, and submits applications to a Medicare Part D plan in their names. *An agent offers a cash payment to a Medicare beneficiary to enroll in a particular Part D plan. *An agent misrepresents key information about benefits or cost sharing to prospective enrollees in order to entice them to enroll.

Subcontractor means

**An individual or entity that provides services on behalf of a Medicare plan sponsor. This includes individuals and organizations with DIRECT relationship with the plan sponsor or individuals or organizations with INDIRECT relationship, such as an agent who has a contract with an agency or filed marketing organization that contract with a Medicare plan.

The Scope of Healthcare FWA

**As a nation, we spend over $2.7 trillion on Healthcare every year, and it is estimated that tens of billions are lost each year to FWA. **One recent study estimated that fraud and abuse added as much as $98 billion to annual spending on Medicare and Medicaid.

The Human Cost of FWA: An example

**As mentioned, FWA is not only costly, it can have serious implications for the health of Medicare plan enrollees. **Member has card stolen and used by someone else for Rx's and other medical treatments; therefore member is unable to get her Rx's renewed. Member goes w/o her meds and has a minor stroke. Now her health records are not accurate.

CMS FWA training requirements for a Sponsor's Employees

**CMS requires Medicare plan sponsors to provide training in FWA to their employees involved in Medicare plan work. **This training must occur within 90 days of hire and annually thereafter.

FWA: Why participate in the training

**Fraud, waste and abuse impacts everyone who receives or relies on healthcare in the US. **The purpose of this training is to help you detect, correct and prevent FWA and your help is needed. You are part of the solution! **As a subcontractor to or an employee of a Medicare plan, you are required to participate in FWA training.

FWA: Combating: A federal priority

**Important priority for the Federal Government. **CMS, the Federal agency responsible for administering these programs, takes its role in leading anti-fraud efforts very seriously and has issued strict requirements for those involved in providing MA and Medicare Part D coverage. **The office of Inspector General, a sister agency to CMS within the US Department of Health and Human Services , is also actively involved in anti-fraud efforts.

FWA Costs More than just Dollars

**In closing this section, let's stress the point mentioned earlier: FWA can result not only in monetary losses to the healthcare system but also in harm to the health and wellbeing of patients. **A doctor bills Medicare (and falsifies medical records to support the billing) for services he never provide to Jane Chen. Jane later becomes ill and is admitted to the hospital. The doctors there rely on her medical records in making decisions about her condition and her treatment, but since these records are not accurate, the best medical outcome for Jane may NOT be achieved. **Agent Marco Martinez markets MA-PD plans by focusing solely on premiums--stressing low monthly costs w/o mentioning the potentially sizable cost sharing obligations that could be faced by a beneficiary. Maria Sanchez opts for a lower premium policy and later forgoes needed medical services because of her inability to pay the cost sharing involved in her policy.

Distinguishing FWA

**It is often difficult to distinguish between abuse and FRAUD. This is because whether an action constitutes fraud or abuse depends on the specific facts and circumstances of the situation and the intent and prior knowledge of the individual committing the action. **It is also difficult to distinguish between waste and abuse because of their similarity and the dependence on the specific facts of an issue. **The good news is that you do NOT need to distinguish between FWA. **Report any activities that you suspect could be FWA. **Those who investigate the activity will determine which category it falls in.

Example of Criminal Involvement Criminal Healthcare Fraud Statute: Section 1347 of Title 18 of the US code imposes criminal penalties for defrauding a healthcare benefit program or obtaining any money or property owned by or under the control of any healthcare benefit program. The penalties for violating this law are fines and up to 10 years in prison or longer if the action results in serious bodily injury to death.

**Medicare fraud can also be committed by person who are neither providers nor consumers of healthcare. Professional criminals or even organizations may be involved. **Health plan employees can monitor their claim systems and review claim records for unusual patterns. **The can conduct internal and external audits, which may involve other steps such as randomly testing claims to verify delivery of billed services and products.

Example of Collusion

**Medicare fraud can involve several parties, including beneficiaries, providers, pharmacists, and organized crime. **Example: A physician write a series of Rx's, a Medicare beneficiary submits them to a pharmacy, and the beneficiary sells the prescribed drugs to a crime ring. The doctor and the beneficiary receive a cut from the crime ring.

Combating FWA: A Health Plan Priority

**Medicare plans also recognize the seriousness of FWA, which not only result in lost dollars but can jeopardize the quality of healthcare received by plan enrollees. **Health plans seek your help in combating FWA and this training is designed to help you recognize questionable activity and take steps to stop or prevent it.

Summarizing the Importance of FWA Detection, Correction, and Prevention

**Most providers, supplies, pharmacists, and sale representatives who work with Medicare are honest and seek to do the right thing. But there are a few individuals and organizations that knowingly commit fraud, while others engage in practices that result in waste or abuse. **CMS and Medicare plan sponsors are committed to providing quality healthcare services to Medicare beneficiaries while reducing the costs of fraud, waste and abuse. These costs take the form of not only lost dollars, but also of a negative impact on the quality of life of Medicare beneficiaries. Fraud, waste, and abuse can inflict real physical and emotional harm. **This training has been designed to provide you with tools you need to participate in the ongoing efforts against fraud, waste and abuse.

CMS FWA training requirements: Agents, Brokers and other Subcontractors

**The FWA training must be received not only by Medicare plan sponsor employees but also by subcontractors and their employees who are under contract to provide health or administrative services. The EXCEPTIONS are limited to: ***accredited suppliers of DME, prosthetics, orthotics, and supplies (DMEPOS) ***Healthcare providers who are enrolled in Medicare Part A/B

The Federal Civil False Claims Act. Criminal False Statements Act **The US code provides that anyone who falsifies or conceals a material fact, makes materially false statements or representations, or uses any false documents knowing them to contain false statements in any matter within the jurisdiction of the Executive Branch, which includes CMS, shall be fined and imprisoned for up to 5 years. **It would be a violation of this law if independent agents knowingly provide MA and Part D plans with false information that they know will be provided to CMS

**The federal false claims act PROHIBITS individuals and entities from knowingly presenting a false or fraudulent claim or a statement in support of a false or fraudulent claim to the federal government for payment or approval. **Liability under the Federal Civil False Claims Act now extends to subcontractors who submit claims for reimbursement to government contractors, including Medicare plans. **The penalties for submitting false claims can be severe; they can include triple damages and fines. **Those who submit false or fraudulent claims to the Federal Government, including Medicare claims, or who participate in such submissions can be held personally liable for their actions. **Additionally, individual states may have their own false claims act and similar penalties (e.g. Florida False Claims Act)

Exclusion from Medicare Program

**Violations of Medicare rules and regulations can also lead to exclusion from the Medicare program. **A healthcare provider's Medicare ID# and privilege of providing services to Medicare beneficiaries can be revoked. **Given the size and extent of the Medicare program, this can substantially limit a provider's future income and employment opportunities. **Also, an agent that is excluded from the Medicare program could NOT sell coverage under MA or Part D as well as any other federal healthcare programs.

Reporting FWA and other Compliance Issues Ways to report FWA: to the SIU or compliance dept. Telephone hotline Dedicated email address and Dedicated web portal.

**You are expected to question and if appropriate report situations in which you suspect something improper, unethical or illegal is going on. **You have a duty to promptly report any suspected violations of the laws that you become aware of--even if you were not involved in the activity, you may be subject to discipline if you knew about it and did not report it. **This can include, but NOT limited to, termination of your employment or contract.

Example of WASTE by Brokerage Agency

*A Medicare plan has agreed to reimburse ABC Agency for its printing costs related to promoting the plan. *the marketing agency does NOT shop around for a cost effective printer, but instead uses the most expensive printer in town because the agency owner is a friend of the owner of the printer. *The agency forwards all the printer bills to the Medicare plan for reimbursement.

Example of WASTE by Provider

*Dr. Mindy Wang prescribes an expensive brand-name medication instead of a generic version that is proven (and widely known) to be just as effective. *This is WASTE, because it results in unnecessary healthcare expenditures. *But it is NOT FRAUD because Mindy sincerely (but mistakenly) believes the brand-name medication to be necessary, and she makes no false statements for gain. *It is NOT ABUSE because Mindy does not receive any payments she is not entitled to.

HIPAA

*Severe penalties may be imposed on Medicare plans and their subcontractors for violating these requirements. **The health information technology for economic and clinical health (HITECH)

Example of WASTE by Health plan employee

*Tom Miller is an employee of a Medicare plan. Tom routinely sends mail to enrollees via one-day-express using a private carrier whether or NOT the message is truly urgent. *Tom neglects to consider more reasonable alternatives such as two-day shipping or priority mail.

CMS Anti-FWA requirements for Medicare plans

--Actively seek to prevent fraud, waste and abuse --Detect and investigate suspected FWA --Implement corrective action when instances of FWA are uncovered --Have a system in place 24 hrs per day for employees and subcontractors to voluntarily, and confidentially report suspected FWA or misconduct related to the MA and Part D programs

FWA Related to Agents and Brokers

--An agent offers Medicare beneficiaries cash or other impermissible incentives to enroll in the Rx plan he represents. --An agent offers beneficiaries money for names, address and phone numbers of friends and acquaintances who are Medicare beneficiaries. --An agent forges a beneficiary's signature on an enrollment form. --An agent intentionally misrepresents a plan's costs or benefits for the purpose of attaining enrollment, or convincing someone to enroll. --An individual solicits MA enrollments and gather "initial premiums". She is not really an agent and disappears with the money.

CMS FWA training requirements: Agents, Brokers and other Subcontractors Those required to take the training including, but not limited to:

--Insurance agents, brokers as well as employees of agencies and field marketing organizations that are performing services for Medicare plans --Employees of other vendors and subcontractors (such as claim processing firms) --Pharmacies and employees of Pharmacy benefit Managers

FWA Involving Medicare Plan Sponsors

--The amt. MA plan enrollees must pay for certain services is greater than what the sponsor's literature implies. --An MA plan realizes it had been overpaid by the Medicare program but fails to report it to the CMS --An MA plan fails to disenroll an enrollee (and continues receiving payment for the enrollee) even though it knows the enrollee has permanently moved from the plan service area.

Steps by Medicare plans to Combat FWA

--The establishment and operation of special investigation units (SIU) or other existing departments that perform an internal investigation function --The analysis of claims data --Collaboration with law enforcement agencies --Adherence to rules set forth by CMS regarding efforts to identify and prevent fraud, waste and abuse.

HIPAA and HITECH changes to the law included:

1. Imposing penalties on business associates (subcontractors that use or dispose protected health information on behalf of a plan, including agents and brokers) for violating the law 2. Imposing obligations to report to the HHS for Civil Rights security breaches. **Depending on culpability, a HIPPA violations may result in civil fines in EXCESS of $1,000,000. Individuals and entities that knowingly obtain and disclose individual health information in violation of HIPAA may be subject to criminal penalties including imprisonment and fines.

Recognizing Possible FWA

1. Make sure you are familiar with Medicare plan policies that explain the program requirements 2. Be familiar with any guidance that identifies behavior that may be viewed as FWA 3. Be on the lookout for suspicious behavior.

Who Commits Medicare FWA?

1. Medicare beneficiaries 2. Physicians and other healthcare providers 3. Pharmacies, pharmacists, and pharmaceutical manufacturers and wholesalers 4. Health plan employees 5. Insurance agents and brokers 6. parties who neither provide not receive healthcare (professional criminals, including members of organized crime) 7. Combinations of the above working together in collusion.

Medicare plan means

A MA plan, MA-PD plan or PDP

Defining Waste: A Closer Look

CMS provides this definition in its compliance guidance for Medicare plans: "WASTE is the overutilization of services, or other practices that, directly or indirectly, result in unnecessary costs to the Medicare program. Waste is generally not considered to be caused by criminally negligent actions, but rather the misuse of resources.

Defining Abuse: A Closer Look

CMS provides this definition: "Abuse involves payment for items or services when there is no legal entitlement to that payment and the health care provider has not knowingly and/or intentionally misrepresented facts to obtain payment."

Example of Fraud Committed by a Medicare Plan Employee

Connie Jones works in a Medicare Plan's enrollment department. She backdates enrollment effective dates received on the first or second of a month in order to allow the enrollment to begin a month earlier.

Example of Provider Abuse

Dr. Ben Jones commonly conducts tests that are viewed within the medical community as unnecessary. This is not fraud because Ben does not engage in deception for gain--he sincerely (although mistakenly) believes the tests to be necessary, and he bills only for tests that he actually performs. But it is abuse because he is receiving payments he is not legitimately entitled to because of his responsibility to provide only medically necessary services.

Example of Physician Self-Referral Law (Stark Law)

Dr. Frances Winters refers her patients needing routine blood tests to an outside independent laboratory that is owned by her husband. **Penalties for physicians who violate the Stark Law includes fines as well as exclusion from participation in ALL Federal healthcare programs, including Medicare.

FWA Definitions and examples

FRAUD is an intentional act of deception, misrepresentation, or concealment in order to gain something of value. Fraud often involves criminal behavior. ABUSE results in unwarranted payments from or costs to a Federal healthcare consumer, provider, or other person obtains money to which they are not entitled, but there is not the intent to deceive that is necessary for fraud to have occurred. Abuse often involves actions which are inconsistent with accepted medical and/or business practices. WASTE occurs when poor or inefficient practices result in unnecessary healthcare expenditures to a Government program.

Example of Fraud Committed by a Medicare Part D beneficiary

Jacqueline Harris, a Medicare Part D enrollee, has a legitimate Rx form her doctor, but she alters it from 60 to 160 pills and sell the surplus to people she knows.

An Example of Health Plan Employee abuse

Maria Adams works for a Medicare plan. She uses the plan's email to send out information to enrollees of the plan promoting her husband's sports memorabilia business. (This activity would also be in violation of HIPPA privacy rules)

Civil monetary penalties CMP's

Penalties that may be imposed for a variety of conduct including Medicare FWA. Different amts. of penalties and assessments may be authorized based on the type of violation and can range as high as $50,000 per violation. Example: Presenting a claim that a person knows or should know is for a service that was NOT provided as claimed or is false and fraudulent.

Federal Anti-Kickback Statute Example: Billco Pharmacy waives Medicare Part D copayments for certain drugs to encourage Part D enrollees to fill their Rx's there.

The Federal Anti-Kickback Statute makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by the Federal Healthcare program, including Medicare. **Remuneration includes anything of value in cash or in kind. The anti-kickback regulations do provide safe harbors. If a payment arrangement fits within these safe harbors it is NOT treated as a violation of the law. **Penalties: Fines of up to $25,000, imprisonment up to 5 years, or both.

Civil Monetary Penalties

The SS Act (which governs Medicare) authorizes civil monetary penalties when CMS or other federal authorities determine that an individual or entity has violated Medicare rules or regulations. **CMP's can be large--for instance, a health plan might be assessed $25,000 for each MA enrollee adversely impacted.

Exclusion from Medicare Program, continued OIG's LEIE (list of excluded individuals and entities. The general services administration database

The office of the inspector general of the Dept. of health and human services HHS and General services administration GSA, maintain lists of individuals and entities banned from providing services to Medicare. **Organizations sponsoring MSA or Medicare Part D plans, along with others working with Medicare, are required to review these lists when hiring or contracting and at least monthly thereafter to ensure no employees or subcontractors that assist in the administration or delivery of services to Medicare beneficiaries are on these lists. **The plan sponsor and/or its subcontractors must remove anyone appearing on either of these lists from supporting the sponsor's Medicare offerings.

Legal Tools Against FWA (to Combat FWA)

There are several legal tools that the government can employ in its fight against FWA, including the following statutes: 1. Federal Civil False Claims Act 2. Anti-Kickback Statute 3. Physician Self-Referral Law (Stark Legislation) 4. Criminal Health care Fraud Statute 5. Criminal False Statements Act 6. HIPPA and HITECH Act **Violations of these laws can result in non-payment of claims, imposition of CIVIIL MONETARY PENALTIES, exclusions from the Medicare program, imprisonment and criminal and civil liability.

Example of Fraud Committed by a Pharmacist

When Pharmacist James Wilson fills Rx's for pain relievers, he deliberately puts fewer pills in the bottle than the prescribed number. His customers usually don't notice or think they have miscounted. James keeps the extra pills and sells them to a local drug dealer.