August 2, 2011

Painting the Picture of Improper Payment for Congress: HHS Inspector General Steps Up to the Podium

By

wiitalaREDITOR’S NOTE: This is the first of two articles covering the recent testimony of Daniel R. Levinson, Inspector General of the Department of Health & Human Services. The second report appears in this Thursday’s edition of RACMonitorEnews.

In late July, Daniel R. Levinson, Inspector General of the Department of Health & Human Services, testified before members of the U.S. House of Representatives about his office’s efforts to monitor and make recommendations to reduce Medicare improper payments. The OIG is, as you know, just one of the auditing groups reviewing provider healthcare claims. Oftentimes, OIG findings are similar to other auditors but sometimes they uncover new wrinkles in the quest for proper payments.

The OIG conducts targeted reviews to determine the scope of improper payments for specific service types and recommends actions to improve program safeguards. By reviewing medical records and other documentation associated with a claim, it identifies services that are undocumented, medically unnecessary, or incorrectly coded, as well as duplicate payments and reimbursement for services that were not provided. In doing so, it uncovers systemic payment vulnerabilities and makes recommendations to address them.

Medically Unnecessary

Levinson and his auditors consider medically unnecessary services to be a particular concern. For one thing, beneficiaries may be subjected to tests and treatments that serve no purpose and may even cause harm. For another, beneficiaries are generally responsible for a 20-percent copayment for items and services provided under Medicare Part B so they may pay unnecessary or inflated copayments when they receive items or services that they do not need, or more expensive versions than they need. Here are two examples provided by Levinson.

The OIG reviewed claims for certain types of support surfaces used to prevent and treat bedsores and found that more than 1 in 5 claims were medically unnecessary.

In its review of power wheelchairs, auditors determined that 9 percent of claims were not medically necessary and the records for an additional 52 percent of claims did not contain sufficient documentation to determine whether they were medically necessary. Improper payments for these wheelchair claims totaled $95 million over a six-month period.

Documentation Errors

Another area of concern is pervasive documentation errors for some services. For example, the OIG auditors found that 60 percent of Medicare claims for rehabilitation power wheelchairs did not meet all documentation requirements. These claims accounted for $112 million in improper Medicare payments over a six-month period.

In addition to records reviews that focus on individual improper claims, OIG also conducts data analysis to identify broader patterns indicating improper payments and potential fraud and abuse. For example, through data analysis, it has identified “outliers” that bill for services at an unusually high rate, as well as patterns in which certain geographic areas exhibit unusual billing. It also has matched claims and other data to identify billing patterns that cause concern—patterns that can generate leads for future OIG investigations and audits as well as recommendations to CMS to strengthen its oversight of Medicare program activities.

For example, the OIG reviewed high-utilization claims for blood-glucose test strips and lancet supplies, and identified an estimated $209 million in improper Medicare payments for these supplies. It recommended that CMS contractors implement various adjustments to its payment system, such as those to identify claims with overlapping dates of service.

In addition to sharing specific findings of audits, Levinson also told Congress, “Although not all improper payments are fraudulent, all payments resulting from fraud are improper. There is no precise measure of the magnitude of health care fraud, but we know that it is a serious problem that demands an aggressive response.”

Although Recovery Audit Contractors (RACs) and others are now in the spotlight as the go-getters, the OIG has been leading the fight against healthcare fraud and abuse for more than 30 years.

As reported by Levinson, during this fiscal year, his office has opened more than 1,700 fraud investigations. Additionally, its enforcement efforts resulted in more than 900 criminal and civil actions and $3.8 billion in court-ordered fines, penalties, restitution, and settlements in FY 2010.

About the Author

Randy Wiitala, BS, MT (ASCP) is a senior healthcare consultant with Medical Learning, Inc. (MedLearn), St. Paul, MN. MedLearn is a nationally recognized expert in healthcare compliance and reimbursement. Founded in 1991, MedLearn delivers actionable answers that will equip healthcare organizations with their coding, chargemaster, reimbursement management and RAC solutions.

Contact the Author

(rwiitala@medlearn.comThis e-mail address is being protected from spambots. You need JavaScript enabled to view it.)

Randy Wiitala, BS, MT (ASCP)

This email address is being protected from spambots. You need JavaScript enabled to view it.