Keeping a Close Eye on Medicare Fraud

Medical practices face many dilemmas in today’s healthcare landscape–from decreased reimbursements to increased patient demands—while fighting extinction in the current competitive environment. Overlooking certain operational efficiencies can lead to revenue loss, but not keeping those binoculars focused on changes to Medicare regulations can also lead to compliance issues–and even fraud.

Observe Common Medicare Fraud Red Flag Areas

Healthcare facilities should perform an audit of the practice’s current operating policies and procedures focusing on common Medicare fraud areas. They should identify red flag areas such as:

• improper coding and billing,
• delivered services that aren’t medically necessary, and
• inadequate documentation and backup procedures.

Most of all, they should make sure that no team members are accepting inducements, kickbacks, or self-referrals.

Develop an Effective Process

After determining their key risk areas, healthcare practices should develop guidelines for handling suspected fraud. The Office of Inspector General (OIG) recommends creating a medical practice compliance manual that includes these instructions along with relevant Medicare directives and carrier bulletins, summaries of OIG Special Fraud Alerts, and other advisory opinions. Additionally, practices should appoint at least one staff member as a compliance officer to monitor activity and execute corrective action plans as necessary.

Establish an Anti-Fraud Culture

Communication is the key to preventing fraud. Healthcare facility staff should be able to comfortably and anonymously reporting potential problems or violations. Examples of how some practices open up lines of communication include telephone hotlines, e-mail forums, bulletin boards, and message boxes. Practices should implement these methods in a culture that encourages staffers to stay alert for concerns or complaints about possible fraud issues. Staff members must also understand the consequences of acting in a non-compliant manner. Practices should develop and communicate the procedures for dealing with individuals who violate the practice’s policies and compliance standards.

Report Suspicious Activity

Practices that discover fraudulent activities should follow the OIG’s Self-Disclosure Protocol,  which provides guidance on conducting a preliminary examination of related documents.  The rule also discusses the steps for preserving relevant documents for a federal investigation and for preparing a remediation plan. Finally, the protocol requires medical practices to conduct a self-audit to demonstrate the positive effects of the plan. Note that carefully managed self-disclosure will reduce the likelihood of ongoing OIG oversight and potentially result in smaller financial settlements.

Create a Plan

Surrounding yourself with a knowledgeable team—including CRI’s healthcare CPAs—can help your practice establish a system for reporting Medicare fraud. It may also be worth considering engaging in a fraud assessment to identify potential weaknesses in other areas.