Retrospective Chart Reviews now Medicare Fraud?

Kameron Gifford, CPC – 6/8/2013

The U.S. government has shown again this week that they are serious about finding and prosecuting Medicare fraud.  Health plans who participate with the Medicare Advantage program continue to be a primary target for both OIG and CMS auditors, and this pressure is sure to increase with new incentives for Whistleblowers in 2014. The focus on due diligence and oversight has never been greater than it is today. The Department of Justice has been relentless in their pursuit of “accountability” and every summary judgment re-emphasizes the responsibility of compliance among all “down-stream entities”.

In this climate of regulatory reform, healthcare companies must strengthen their internal auditing and compliance programs to comply with current interpretations of these new laws. The “old way” of doing things isn’t just bad business anymore, now it can mean civil and/or criminal penalties. The expectation is that of knowledge and ignorance is no longer a defense.

New Risks in Retrospective Chart Reviews

Historically, Medicare Advantage programs have performed retrospective chart reviews to submit missing diagnoses to Medicare. Health plans routinely contract with coding companies to review the medical records of their members for diagnoses that are properly documented. These properly documented codes are then submitted to CMS as corrections. But what about the original claims submitted by the physician? Are these diagnoses codes being verified for compliance?  If not, this might be considered fraud.   

In a recent settlement agreement between SCAN and the US government, SCAN agreed to pay more than $300 million to settle allegations of “upcoding” among other things. This case represents the first time that this “standard practice” of retrospective chart reviews had ever been challenged in a court of law. The practice of engaging in chart reviews for the sole purpose of adding codes violates the federal rules of the Medicare Advantage program. By not providing the coding contractors with original claims data, the initiative will never result in less diagnoses or a reduction in revenue. 

Consider this article in the LA Times written 8/24/2012:

"The alleged manipulation of those patient risk scores was a key part of the federal whistle-blower suit against SCAN. Separately, SCAN agreed to pay $320 million to resolve allegations that it was overpaid by the state's Medi-Cal program, which serves the poor and disabled. SCAN denied wrongdoing in that settlement as well."
"Federal prosecutors didn't allege any fraud by SCAN. But Susan Hershman, an assistant U.S. attorney in Los Angeles, said investigators concurred that SCAN didn't share certain information with Medicare that would have reduced payments."
 (http://articles.latimes.com/2012/aug/24/business/la-fi-medicare-loss-risks-20120825)

Implications for MRA Programs

• Retrospective Audits Must Be Dual Purpose –
• Verification of previously submitted codes in addition to catching “missing” codes.
• Use a Third Party for MRA Education –
•  Transparency is your most valuable resource.
• Invest in the Resources that you have –
• Educate everyone, knowledge is power.

Empirical Risk Management can help you identify risks in your MRA process, make recommendations and provide quality education for your entire organization.

Initiating Change from the Initial Point of Contact www.ermconsultinginc.com