Beyond the Obvious

beyond the obviousIn 2012 Donald Berwick, a former head of the Centres for Medicare and Medicaid Services (CMS), and Andrew Hackbarth of the RAND Corporation, estimated that fraud events (and the extra rules and inspections required to fight it) added as much as $98 billion, or roughly 10%, to annual Medicare and Medicaid spending—and up to $272 billion across the entire health system.

Usually, each fraud that is busted by law enforcing agencies stops losses of up to millions of dollars. But, the news related to such fraud busts do not sustain the buzz. Ideally, it should lead us to think deeper on some fundamental questions:

  1. Is there a pattern in these frauds? Can there be few early leads?

Typically, such frauds are organized i.e. there is a chain of entities involved in achieving the means such as prescribing provider, DME, marketers/stringers (one who would hunt for beneficiaries) and beneficiaries. Typically frauds in DME are centred on stolen Medical Identities and false bills. If this information and link between provider, DME, people working to recruit beneficiaries and beneficiaries are rolled up to a meaningful pattern, it can offer a model to detect and nip such frauds in the bud. In essence, a summary of working relationship of providers with other players, beneficiaries and the flux of claims (rolled up for beneficiaries). This study can act as a much needed deterrence for such frauds that continue to siphon off tax-payer’s money.

Consider a situation where a business provider has been excluded by the Office of Inspector General (OIG), CMS, a state’s Medicaid or Children Health Insurance program (CHIP); those who own that particular business entity may or may not be direct healthcare providers as they need not be physicians themselves. But,

  • Is there a possibility that there are other billing providers with Medicaid or Medicare where such individuals have a share of ownership?
  • Do such providers (sharing a degree of ownership) go scot-free without even coming under the radar of suspicion?
  • How can such a possibility be ruled-out where there are other providers owned directly by the excluded individual or blood relatives of such individuals?
  • What stops such owners of excluded providers to open up a new business some time later (either owned by themselves or by their blood relatives) and start the billing again with Medicaid or Medicare?

2. Is it possible to implement a ‘Complete Exclusion’ without loopholes?

If these fraud events are closely looked into, it is found in a few cases that an excluded provider has come back again due to one of the following reasons – forgotten, ignored, missed over time or lack of coordination among different agencies? In other cases “through proxy” or “through indirection”.  This makes us think that these rejected providers are lured by the huge money pool lying in the Medicaid system that they somehow find and utilize the existing loopholes to make a re-entry.

OIG contains around 60 K excluded entities; System for award management (SAM) contains over 120 K excluded entities; Medicare revocations adds up to around 35 K;  the Medicaid and Children’s Health Insurance Program State Information Sharing System (MCSIS) maintains around 8 K exclusions; all States’ Medicaid Exclusions would sum up to around 50 K excluded providers. There is a degree of overlap among these data sources. A conservative estimate of all these entities comes up to around 150 K excluded providers.

In handling these 150 K excluded entities

i. Have all such entities been excluded across all the State run programs like Medicaid, Medicare, CHIP, etc.?

For example: A Las Vegas based community mental health centre was excluded by OIG recently but the owner of centre and another centre belonging to the same owner was never excluded by OIG and hence it could easily open-up a new business without being a suspect of the past exclusions.

ii. Even if assumed that the answer to above question is ‘yes’, are they still close to the programs “by proxy” or “by indirection”?

a. A few examples for proxy can be Change of Ownership to a relative, a new business owned by excluded             entities or their relatives.

b. An example of “indirection”: non-medical practitioners, physician assistants and nurse aids being employed     by a provider without the knowledge of the exclusions of such individuals across various databases.

Not only are these against the compliance regulations of ACA, it compromises on the safety and well-being of the beneficiaries (esp. children, elders and women).

Answers to the above critical questions

  • The Integrated Excluded Entities system should be an aggregate of exclusions of both entities and individuals which maintains the overlapping exclusion information among various exclusion sources. Such an integrated exclusion database should also include all the direct relatives, past businesses and owners, present businesses and owners and their current businesses with other critical information.
  • “Proximity to Excluded Entities” would mean that a billing provider is existing in the system by proxy or by indirection. It can be argued that a proximity of zero is the same excluded provider existing in the system overtly. A proximity level of 1 and 2 should represent strong suspects where in the provider/entity may be a potential fraudster and may need a close watch on its billing behavior. This should mean that an excluded entity is active in the system by covert means.

There seems to be an immense scope for law enforcing agencies, in terms of information aggregation, to see beyond the obvious and what kind of data should be made available by the enrolment system for the State administered health insurance to truly become a deterrent of real and potential fraudsters.

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