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By David Glaser, E.S.Q If you think this can’t happen to you, you’re wrong. Odds are that at least one recipient of this newsletter will have such a visit during the next few years. Because investigations are so common, you should prepare your staff to know how to react. Some investigations begin with an administrative subpoena for documents. However, in many cases, the first indication of an investigation is an agent appearing at the home of one or more employees (or former employees). The agents prefer to conduct the visits at home for the same reason that a lion hunts at the rear of the pack; an employee at home is isolated and less able to seek help from friends. Because employees will face the agents alone and with no advance warning, you need to prepare them to handle the visit. These visits put tremendous pressure on employees, who may worry (usually needlessly) about their personal liability or about losing their job. Handling “unexpected visits” With that in mind, it’s essential that everyone in the clinic be trained on how to handle contact from the government. Depending on the nature of the investigation, agents may contact administrators, medical professionals, billing staff, or receptionists. Since you cannot anticipate who will be contacted, you need to make sure that absolutely everyone has received instructions on how to deal with investigators. You may worry that raising the specter of a potential investigation will cause undue fear or suggest that the organization is doing something wrong. But if the topic is discussed in a light and entertaining fashion, it doesn’t have to be scary—and it’s much less scary than having an agent visit your home when you’re not prepared for the visit. The training should cover the following topics:
The basics of OIG investigations. As you well know, the laws governing medical practices are complex. Stark, the antikickback statute, and the myriad billing rules puzzle you, government agents and potential whistleblowers. Because the rules are so complex, it is almost likely that someone involved has misunderstood a rule. However, when an investigation starts, you don’t know whether the government is mistaken or you are. Until you know, it is best to prepare for the worst, but hope for the best. It is also best to stay quiet.
They have ways of making you talk. In other situations, the agents will minimize the situation. For example, they may suggest that the visit is “just routine” and “not a big deal.” This kind of statement is invariably at least a white lie. If it weren’t a big deal, the agents wouldn’t be taking time out of their evening to conduct the visit. If your staff members have been trained to anticipate the arguments the agents will use and understand why the agents are using them, it is less likely that the arguments will be effective. Do some role playing to help them practice how to respond to potentially intimidating interview techniques.
How an interview can go wrong. First, a small misstatement of the facts can cause major problems for both the employee and the practice, even if it is inadvertent. The error may cause the agent to doubt the credibility of every other statement, greatly prolonging the investigation. In some cases, the agent may accuse the person of making a false statement to the agent, and that is a crime. Second, it is common for the agent to misunderstand something the employee thinks is clear. For example, in one investigation the employee was explaining how physician assistants examined the patient but the bill was submitted under the supervision physician’s number. The witness thought nothing of it, as it was typical incident to billing. The agent, however, interpreted this as a suggestion that the physician was inappropriately billing for work she didn’t do. Third, either the employee or the agent may have a poor understanding of the law. In one such situation, an agent mischaracterized the law, claiming that perfectly legal activities were illegal. The employee, naively trusting that a government agent’s characterization of the law would be correct, concluded that he had broken the law. He then “confessed” to activities that were perfectly legal. However, the way the agent worded the confession made it sound as if the employee had knowingly broken the law. It can be very, very difficult to reverse the impact of this type of “confession,” even if you have done nothing wrong.
The need for legal counsel. Make sure that employees understand that unless the agent produces a search warrant, the government cannot make you do anything before you contact your legal counsel. On most visits, OIG agents will not have a subpoena or other written document. They will simply ask you to talk voluntarily. Even if the agent does have a document such as a civil investigative demand or a grand jury subpoena, that document does not require you to do anything before you have time to contact legal counsel. In fact, while the OIG does have the right to “immediate access” to records, the law defines “immediate access” as 24 hours. In the unlikely event that an agent has a search warrant, the agent is entitled to take documents. Otherwise, it is entirely permissible to send the agent away. Before doing so, however, be sure to get the agent’s business card. You will want to know who is conducting the investigation.
An emergency response plan. Make sure your employees have a number of contact options if one or more people are unavailable. Everyone should understand that a visit from an OIG agent merits an emergent response, even if polite (or shaken) employees are reluctant to bother a colleague at home.
Informing the employer. A final word of advice: revisit this topic frequently. Many organizations train staff on how to handle contact with a government agent once, but then don’t repeat the training for years. In addition to the need to train new employees on these procedures, keep in mind that the pressure of an actual investigative visit makes it very hard for employees to follow the guidance, even when the training is fresh. If the training occurred many months before the OIG agent’s visit, it is quite possible that employees won’t recall all the points that were covered. Many complex factors go into determining how best to respond to an investigation, including the nature of the investigation (civil or criminal), the relative culpability (or lack thereof) of the client, and the nature and quality of the evidence. The initial contact is often critical. When clients undertake the initial communications directly with the OIG––without adequate preparation or understanding of the legal issues—the results can be disastrous. An experienced advisor should guide the client through the process, including development of an appropriate communications strategy, analysis of the evidence, determination of how to structure relations with employees and other relevant parties in the investigation, and whether to pursue early negotiations or articulate grounds for the government to decline prosecution. There is no way that a surprise government visit can be viewed as a good thing, but with careful preparation, you can minimize its impact.
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What is Fraud & Abuse? The CMS Internet Only Manuals (IOM) publication 100-01 Medicare General Information, Eligibility and Entitlement Manual – Chapter 1 General Overview Section 20.3.1 provides the following information on fraud:
Examples of fraud include, but are not limited to, the following:
Section 20.3.2 of the same publication provides the following information on abuse:
Following are three standards that CMS uses when judging whether abusive acts in billing were committed against the Medicare program:
Examples of abuse include, but are not limited to, the following:
The IOM publication also specifies that practices generally categorized as abuse may be considered fraud if it is determined that the subject knowingly and willfully conducted the abusive practice. The CMS Internet Only Manuals (IOM) publication 100-08 Medicare Integrity Program Manual - Chapter 4 Benefit Integrity Section 4.2.1 states: “The most frequent kind of fraud arises from a false statement or misrepresentation made, or caused to be made, that is material to entitlement or payment under the Medicare program. The violator may be a provider, a beneficiary, or an employee of a provider or some other person or business entity, including a billing service or an intermediary employee.”
What Are the Penalties? Under the False Claims Act entities who knowingly submit or cause another to submit false claims for payment of government funds may be liable for three times the government’s damages plus civil penalties of up to $11,000 per false claim. The False Claims Act allows for civil monetary penalties for false claims when the provider acts with “reckless disregard”, or “deliberate ignorance” as to the truth or falsity of claims submitted to a Federal health plan. Who Investigates Fraud and Abuse?
How Can We Protect Our Practice? Read your Medicare and Medicaid carrier’s newsletters and bulletins and sign up for their email alerts. Every staff member involved in the billing or reimbursement process must be kept up to date on billing and coding rules and regulations. Monitor the OIG Exclusion list prior to hiring or contracting with individuals or entities and periodically monitor the list to determine the exclusion status of current employees and contractors. More information on the OIG Exclusion Program can be found in the article entitled “Don’t Hire Excluded Individuals!” Private payers are also increasing their fraud and abuse investigations. A thorough understanding of the most recent AMA CPT (Current Procedural Terminology) and ICD-9-CM codes is crucial for compliant billing. Read payers bulletins and newsletters, document conversations with payers regarding billing rules and be familiar with both the provider manual and contractual obligations. AMA Resources
AMA corrections to their 2006 HCPCS and CPT editions: Verify billing advice received from billing companies, consultants and third-party newsletters and bulletins prior to acting on it. A reputable company will provide the official source documents (or link to these documents) that supports the billing recommendation. Review the risk areas published annually by the Office of Inspector General (OIG) in the OIG Work Plan. The Work Plan identifies the issues that the OIG has targeted for special attention. The 2006 Work Plan includes investigations into:
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Compliance Programs: Preventative Medicine The OIG has developed a guide to the development and implementation of a voluntary compliance program for claims submitted to the Federal health care programs. The OIG says that a voluntary compliance program helps to prevent billing errors and fraudulent claims, and communicates to practice employees their responsibility to report erroneous or fraudulent conduct, in order that it be corrected. The OIG suggests that physicians view compliance programs as preventive medicine for their practice.
The OIG continues to encourage physicians to incorporate compliance programs in their practice. Practices that have recently been audited by the OIG or Medicare contracted auditors report that they are questioned as to whether they have a compliance plan. According to the OIG notice listed below, a working compliance program shows that “the physician practice is making additional good faith efforts to submit claims appropriately.” On October 5, 2000 the Department of Health and Human Services (HHS) Office of Inspector General (OIG) published The OIG Compliance Program for Individual and Small Group Physician Practices in the Federal Register. This notice provides guidance for individual and small group physician practices on creating a compliance program based on seven components. Those components are listed below in the suggested order of implementation:
The OIG encourages collaborative efforts such as the sharing of policies and procedures to use as templates that can be personalized by the practice. The development and implementation of the compliance program can be done in stages. It is recommended that the implementation follow the order listed above. Prior to the development of the guidance for a compliance program for individual and small physician practices, the OIG published the Compliance Program Guidance for Third-Party Medical Billing Companies. This publication was prompted by the OIG’s concern regarding physicians’ reliance on third-party billers for coding and billing advice. In Section III Physician Billing Practices of the OIG Compliance Program for Individual and Small Group Physician Practices, the OIG reminds us that physicians maintain responsibility for all claims sent in the physician’s name or containing the physician’s signature even if the physician had no knowledge of the billing impropriety. The seven fundamental elements of the compliance program for third-party billing companies are the same as those listed for the physician practice. As with the physician compliance program, this program is voluntary but strongly recommended. If you are currently — or are considering — outsourcing your billing, verify that the billing company has a working billing compliance plan that incorporates, at a minimum, the seven elements outlined by the OIG. Watch for the Best Practices in Third-Party Billing Companies article in the next issue of Oplinc’s Best Practices Review. ............................................... The OIG Report The OIG's Semiannual Report to Congress summarizes their activities for the period October 1, 2005-March 31, 2006. The agency reports their findings on the misuse of modifiers -25 and -59. The report does not break down the misuse of these modifiers by provider specialty. Nevertheless, as these two modifiers are the most commonly used modifiers in oncology billing it is appropriate that we should examine our understanding and use of these modifiers. Modifier -25 Significant, Separately Identifiable Evaluation and Management Service by the Same Physician on the Same Day of the Procedure or Other Service Section 30.5 Chapter 12 of the Medicare Claims Processing Manual (MCPM) states that a significant separately identifiable evaluation and management service provided on the same day as a chemotherapy or nonchemotherapy infusion or injection will be payable when modifier -25, is appended to the E/M code. However, CMS also clearly states that the affirmation of the treatment plan and the supervision of nonphysician staff providing “incident to” services are included in the physician work related to the hydration, infusion and injection services. Before automatically appending modifier -25 on office visits provided on the same day as drug administration services review section 30.6.6 of MCPM Chapter 12 for clarification on the appropriate use of this modifier. If the E/M visit is solely for affirmation of the treatment plan and/or supervision of the “incident to” services it does not qualify as a significant and separately identifiable service. Section 30.6.6 says that the work involved in the E/M visit billed with modifier -25 must be above and beyond the pre and post work involved in the global service (in this case the drug administration service). Documentation for the medically necessary E/M visit and the drug administration service must support the use of modifier -25. The rules for the use of modifier -25 on E/M visits billed with drug administration services applies to both Medicare and private payers. CMS also answers the question of the need for a different diagnosis stating, “For an evaluation and management service provided on the same day, a different diagnosis is not required.” The OIG report states that in FY 2002 35 percent of claims for E/M services billed with modifier -25 did not meet program requirements. These improperly paid claims resulted in $538 million in improper payments. Medicare carriers have been instructed to continue working on reducing the number of E/M services that are inappropriately billed with modifier -25. Modifier -59 Distinct Procedural Service Modifier -59 is used to bypass the National Correct Coding Initiative Edits that are used to prevent billing of services that should not generally be billed together as they are bundled into a code pair in the Column One/Column Two edits. The Column One code is the primary service and the Column Two code is the secondary service. Under the NCCI edits when a bundled primary and secondary service code are both billed the primary code will be paid and the secondary code will be denied. In certain circumstances the use of a modifier is allowed to bypass the edits. For instance, modifier -59 may be appended to the secondary code to indicate that it was a distinct procedure or service. In oncology we appropriately use this modifier when billing for medically necessary hydration services provided sequentially to other drug infusion services. Hydration provided at the same time as chemotherapy infusion is not separately payable, but medically necessary hydration provided sequentially is. Several other drug administration services are bundled and may be separately paid with the appropriate use of modifier -59. The OIG reports that 40 percent of code pairs billed with modifier -59 in 2003 did not meet program requirements for the use of the modifier. The OIG estimates that $59 million in improper payments were made on these claims. The OIG also cites Medicare carriers for not conducting reviews of claims containing this modifier. As a result of their findings, the OIG recommended that CMS encourage carriers to conduct pre and post payment reviews of the use of modifier -59. CMS agreed with the OIG findings and practices are reporting a significant increase in the number of these reviews. When responding to a review and request for documentation be sure to include in the correspondence the medical record documentation that supports the appropriate use of the modifier. For example, if the review is for hydration services billed on the same date of service as chemotherapy include the medical record documentation containing the start/stop times of the drugs and fluids to show that the hydration was sequential to the chemotherapy as well as the treatment plan ordering the hydration. ...............................................
Don’t Hire Excluded Individuals! Congress mandates that physicians and other practitioners convicted of program-related crimes be excluded from participation in Federally-funded health care programs. Congress gave the OIG the authority to establish an Exclusion Program and to impose a Civil Monetary Penalty (CMP) for institutions that knowingly hire excluded individuals/entities. Excluded health care providers, individuals, and businesses may not receive payment for any items or services that would otherwise be payable under Medicare, Medicaid, and any federal health care program. Additionally, no payment is made to any individual, business or facility that submits claims for payment of items or services provided, ordered, prescribed or referred by an excluded entity (there is a narrow exception for certain emergency services or items). The exclusion program and prohibition against Federal program payment also extends to individuals and entities that provide administration and management services not directly related to patient care. There are 72 Classifications of excluded entities listed on the OIG Exclusion database including: Billing Services, CPA, Consultant, Doctor Owned Entity, DME Company, Drug Company/Supplier, Hospital, Law Practice, Management Services, and Nursing Profession. Providers and entities that hire or contract with excluded individuals/entities to provide items or services to Federal program beneficiaries may be subject to a CMP of up to $10,000 for each service or item furnished by the excluded entity and an additional penalty of up to three times the amount claimed as well as possible exclusion themselves. In order for such penalties to be imposed the provider submitting the claims for the items or services provided by the excluded entity must have known or should have known that the person was excluded from the Federal health care programs. The OIG maintains a List of Excluded Individuals/Entities on their website so that providers and entities can identify those entities excluded from the Federal health care programs. The list is available in both an online searchable database and a downloadable database. The OIG also provides updates to the Exclusion database, OIG Evaluation and Audit Reports, Federal Register Reports and other OIG postings to the website through an Email List. For more information and guidance on the OIG Exclusion Program visit The OIG Website.
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They might appeal to self-interest, arguing that unless the employee agrees to an interview, he or she will face prosecution. Agents will typically try to drive a wedge between the clinic and employees by telling employees that the clinic will try to blame them for the problem, so they might as well “tell the truth” by turning on the clinic first.
