Senior Medicare Patrol (SMP) Medicare Fraud New Volunteer Counselor Training Chapter 1 - SMP Program Chapter 3 - Medicare Fraud and Abuse Chapter 4 – Common Scams & Fraud Within Medicare Services Funded by the U.S. Administration for Community Living (ACL) March 9, 2015

SMP Volunteer Foundations Training Chapter 1 - Describe the background and mission of the Senior Medicare Patrol program Chapter 3,4- Describe how Medicare is subject to fraud, errors and abuse - Identify strategies to combat fraud, errors and abuse Where’s Chapter 2? 2

The SMP Program Chapter 1 SMP Volunteer Foundations Training Chapter 3 3

 Established in 1965  Based on trust  Claims paid within days  “Pay and Chase” 4

 How much does Medicare pay in claims every year? ◦ $ ____________________  How much does Medicare lose to fraud, abuse and errors every year? ◦ $ ____________________  Source: Congressional Business Office (CBO) for

 In 1997, the federal government established 12 demonstration projects  Recruit and train retired professionals  Teach other seniors  Protect, Detect, Report  Refer cases for investigation  Now 54 SMP projects in the U.S. Senior Medicare Patrol: From Idea to National Program 6

“Senior citizens are our best front line defense against these losses. Yet often they don’t have the information and expertise needed to recognize and accurately report cases of error, fraud and abuse.” Source: U.S. Senate Report According to the U.S. Congress.. 7

Disseminate SMP fraud information through media, outreach and community events Assist beneficiaries in resolving issues and complaints Make referrals of suspected cases of fraud, errors and abuse 12 3 Three Roles of SMPs 8

Medicare Fraud and Abuse Chapter 3 SMP Volunteer Foundations Training Chapter 3 9

How Does Medicare Fraud Happen? How Does Medicare Fraud Happen? Chapter 3 10

11 Your Medicare Card is Your Health Care Credit Card =

12 Medicare ID = Social Security Number

 Any person or business who can bill Medicare  Doctors and health care practitioners  Suppliers of durable medical equipment (DME)  Employees of physicians or suppliers  Home Health Agencies, Hospice  Beneficiaries Who Perpetrates Medicare Fraud and Abuse? 13

Some of OIG’s Most Wanted Fugitives 14

Ambulance Services Clinical Lab/Independent Physiology Labs Durable Medical Equipment (DME) Suppliers Home Health Agencies Hospice Care Hospital Services Medicare Advantage / Managed Care Plans Medicare Prescription Drug Plans Mental Health Services Nursing Facilities Physician/Practitioner Services & Kickbacks Common Fraud Areas

16   Billing for services or supplies not provided   Altering claim forms to obtain a higher payment amount - UPCODING   Billing twice for the same service or item   Billing separately for services that should be included in a single service fee - UNBUNDLING Examples of Fraud

 Knowingly and willfully executing or attempting to execute a scheme or ploy to steal from the Medicare program or  Obtaining information by means of false pretenses, deception or misrepresentation in order to receive inappropriate payment from the Medicare program Definition: Fraud 17

  Operated a Health and Beauty Clinic   Performed radiofrequency laser and liposuction   Stole Medicare numbers from patients   Bought Medicare numbers from recruiters   Submitted fraudulent claims for: ◦ ◦ Revascularization ◦ ◦ Ablation of a bone tumor ◦ ◦ Placement of radiotherapy catheter in breast Doctor Convicted of Multi-Million Dollar Medicare Fraud 18

19   Podiatrist offers free pedicures   Trims everyone's toenails (for free!) ◦ ◦ Asks for Medicare number ◦ ◦ Medicare does not pay for pedicures   Exception: patients with Diabetes Mellitus ◦ ◦ Medicare is billed for a higher end service such as debridement of a nail ◦ ◦ Patient gets the service so may be unlikely to report Foot Fraud

 Occurs when an individual or organization deliberately deceives others to gain an unauthorized benefit  Fraud may be discovered when: ◦ Beneficiaries report complaints to companies that process Medicare claims ◦ Medicare contractors audit medical claims for inappropriate billing Fraud 20

Consequences for Perpetrators of Fraud   A federal crime to defraud the U.S. Government.   Convictions can be criminal and/or civil   Convicted persons may be sent to prison, fined or both   Criminal convictions usually include restitution (repayment of the stolen funds) and steep fines   Convictions also result in mandatory exclusion from the Medicare program for a specific length of time   In some states, individuals and healthcare organizations may lose their licenses 21

 Theft of Medicare number leads to false claims  False claims go on your Medicare file  False claims may prevent you from getting legitimate services/products  Too many false claims could lead to ‘flagged for non-payment’

  Someone stole her Medicare number   Used it to bill Medicare for durable medical equipment including a wheelchair   When she needed a wheelchair, Medicare denied the claim A Victim of Medicare Fraud 23

 Incidents or practices of providers that are inconsistent with accepted sound medical, business or fiscal practices  These practices may directly or indirectly result in: Payment for services that fail to meet professionally recognized standards of care or that are not medically necessary Unnecessary costs to the program Improper payment Definition of Abuse 24

 Receiving payment for items or services when there is no legal entitlement to that payment  And the provider has not knowingly and intentionally misrepresented the facts to obtain payment Abuse Involves Note : The difference between fraud and abuse is intention! 25

 Routinely submitting duplicate claims  Improper billing practices, such as Billing Medicare at a higher fee schedule rate than for non- Medicare patients Submitting bills to Medicare when Medicare is not the beneficiary’s primary insurer  Breach of the Medicare participation or assignment agreements Collecting more than 20% coinsurance or the deductible on claims filed with Medicare  Submitting claims for services that are not medically necessary Examples of Abuse 26

  Recovery of amounts overpaid with interest and penalties—for a first time offense   Education and/or warnings   Referral to the Office of Inspector General if all else fails and abuse continues   Possible sanctions or exclusion from the Medicare program   Possible Civil Money Penalties up to $10,000 for repeated limiting charge violations Consequences of Abuse 27

 The difference between fraud and abuse is ____________________ 28

 The difference between fraud and abuse is INTENTION 29

Inappropriate practices that start as abuse can evolve into fraud Inappropriate practices that start as abuse can evolve into fraud 30

 Medicare is a complex set of rules, regulations and codes  One hospital statement could involve tens of people generating a single patient’s bill  American Medical Association- “Nearly 20% of claims have errors”  ICD -9 Codes: 15,000  ICD – 10 Codes: 68,000 31

 Beneficiary Claims They Did Not Receive Service Billed on their Medicare Summary Notice (MSN)* ◦ Claim shows service provided by physician but the beneficiary may have seen:  the nurse practitioner or physician’s assistant  Pathologist  Anesthesiologist  Radiologist  Hospital in-patient bill may have high charges ◦ “I can’t believe Medicare pays that much!!” ◦ Duplicate charges Errors and Other Situations That May Not be Fraud *Medicare Summary Notice: A report on the claims submitted under the Medicare number mailed to beneficiaries quarterly 32

33 Chapter 4 SMP Volunteer Foundations Training Chapter 3

Clues for Detecting Possible Fraud, Errors or Abuse 34

OIG Fugitive: Marina Nazarova   Part-owner of DME company in Burbank, CA   Purchased Medicare numbers from recruiters   Billed Medicare more than $2 million for durable medical equipment and supplies that either were not provided or were not medically necessary   Fled to Russia 35

  Why DME? ◦ ◦ No professional licensing requirements (business license only) ◦ ◦ Suppliers find it easy to set up shop with very little investment ◦ ◦ Huge potential for quick profit ◦ ◦ Easy to obtain Medicare numbers Look For   Unauthorized, unsolicited DME sent to beneficiaries   All patients in a skilled nursing facility have the same wheelchairs   Suppliers who send fax authorizations to providers for individual beneficiaries Durable Medical Equipment (DME) 36

37 MEDICAL EQUIPMENT FRAUD Owned equipment supply company Posed as employee of a legitimate supplier who contracts with numerous nursing homes Accessed medical charts for residents who require specialized wound care Billed Medicare for wound care supplies that were never ordered or provided On the lam - $12 million richer

Home Health Agencies   Patients are vulnerable   Definition of homebound is abused   Relatively easy to establish an agency   A large number of agencies exist   Oversight and enforcement are challenging   Incentives and kickbacks widely used 38

39 $13.7 Million Home Health Fraud   Owner of home health company: ◦ ◦ Pays kickbacks and bribes to patient recruiters ◦ ◦ Pays kickbacks and bribes to doctors in exchange for fraudulent Rx for medically un-necessary therapy and home health services ◦ ◦ Then uses these false Rx and recruited patients used to fraudulently bill Medicare

  A skilled nursing facility provides Bingo games for residents on Thursday afternoons   Without the residents’ knowledge, the facility bills Medicare for mental health therapy during these Bingo sessions   How is this fraud? ◦ ◦ Billing for a service that was never provided ◦ ◦ Bingo does not count as mental health therapy Medicare Fraud in a Skilled Nursing Facility 40

  Why Ambulance Services? ◦ ◦ Beneficiaries, hospital discharge planners, nursing home staff do not understand Medicare coverage ◦ ◦ Doctor’s note for medical necessity not sufficient for Medicare coverage Look For   Ambulatory patients transported by ambulance   Claims for advanced life support when only basic life support was provided   Billing Medicare as non-emergency transport; claims are denied by Medicare – beneficiaries put in collection Ambulance Service 41

  Why Laboratory Services? ◦ ◦ Beneficiaries do not receive EOBs ◦ ◦ Physicians do not see what is billed to Medicare ◦ ◦ Labs not required to submit diagnosis information to support the need for the services Look For   Medically un-necessary services billed   Unbundling (e.g., one blood panel but listed as individual tests)   Tests (not ordered) but performed and billed   Providers “strongly urging” patients to go to a specific clinic (collusion) Clinical Laboratories 42

  Why Hospice Care? ◦ ◦ End of life issues create extremely vulnerable situation ◦ ◦ Beneficiaries and families unaware of items billed to Medicare during hospice ◦ ◦ Families get MSNs after beneficiary’s death Look For   Beneficiaries who are not terminally ill enrolled in hospice   Hospice agencies doing presentations at senior centers; promising ‘free’ medical equipment for signing up   Confusion with Medicare coverage Hospice Care 43

  Why Hospital Services? ◦ ◦ Patients not aware of all the services they are receiving ◦ ◦ Medicare payment rules for hospital services are complex ◦ ◦ Many facilities do not offer itemized statements ◦ ◦ Hospital statements are rife with errors Look For   Request itemized statements from the hospital   Look for items or services charged but not provided   Note: “observation status” vs. “inpatient admittance”   Requirement for SNF Hospitals 44

  Why MA Plans?   Dramatic increase in the number of managed care plans   They hire independent agents; difficult to monitor and regulate   MA plans ‘overstate’ the ill health of their members for higher reimbursement rates Look For   Explanation of Benefits for MA members   Insurance agent’s marketing violations   Agents switching beneficiaries to agent’s plan without consent or knowledge   Cold calling (if no prior relationship) Medicare Advantage (MA) Plans 45

  Part D Prescription Drug Program 2006 ◦ ◦ $50+ billion dollar program   Approx 60,000 pharmacies in U.S.   Examples of fraud or abuse: ◦ ◦ Kansas: pharmacy billed Rx claims for 2 patients ◦ ◦ Los Angeles: $8.4 million billed (9 times the national average)   Billing hundreds of Rx for a single beneficiary   Submit claim for brand name drug but dispense generic   Large # of claims for refills, never requested Pharmacies 46

 2 nd largest drug store chain in the United States  Customers in California and other states were surprised to find that CVS had renewed their prescriptions and billed their insurers without their consent CVS Caremark Part D Fraud 47

  Why Mental Health Services? ◦ ◦ Patients trust their therapist/counselor ◦ ◦ The stigma of receiving mental health services may prevent some patients from questioning claims Look For   Patients who can’t benefit from therapy, e.g., the patient who was in a coma for 3 months   Up-coding: billing for a more complex diagnosis than is warranted   Billing for 50 minute session and only seeing patient for 5 minutes Mental Health 48

  Why Physician/ Practitioner Services? ◦ ◦ Trust in medical caregivers ◦ ◦ People are reluctant to question their physician; afraid of a negative impact on their care or that physician will no longer treat them Look For   No physician was present during the service or patient has never seen the doctor   Paying beneficiary or a recruiter for providing the Medicare number   Compare the statement provided at the time of the service to the services shown on the MSN (flu shot vs shingles shot) Physicians 49

  Stranger called her to verify her Medicare number   Promised her gloves for her arthritis   Drove her 300 miles for an ‘exam’   Had her ‘sign’ a form   Billed Medicare $1000 for labs A victim of Medicare fraud 50

Homeless Medicare beneficiary on Skid Row Picked up at downtown Emergency Drop- in Center by fraudster Transported to a local hospital with questionable diagnosis Moved to Skilled Nursing Facility; promised 90 days of housing paid for by Medicare 51

Complexity = Confusion = Opportunity for Fraud Affordable Care Act Covered California Cal Medi- Connect 52

53 HICAP Counselors … Keep their clients out of hot water!

Medicare Fraud/ Financial Fraud 54

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56   Fraudster calls consumers early in the a.m.   Sales pitch is done rapidly, usually with a foreign accent   Deliberately confuses people into believing the caller represents Social Security or Medicare   Promises a new Medicare card or medical card OR   offers free medical alert equipment   To get their checking account information Telemarketing/Phone Scams

57   Genetic testing (cheek swab)   Covered by Medicare!   No doctor’s Rx required   Who foots the bill?   Where is my DNA stored? Ice Cream Social Free Ice Cream Social

58 Grandparent Phone Scam   Gets your information from social media?   Masquerades as your grandchild   In trouble; need grandparent’s help   “Don’t tell my parents!”   “Just send me $$”

Treat the Medicare card as your credit card Never give your Medicare number to a stranger Record doctor visits, tests and procedures in personal healthcare journal or calendar Save MSNs and Part D Explanation of Benefits; shred when no longer needed Remember: Medicare does not call or visit to sell anything Protect 59

Compare MSNs and EOBs to provider visits to ensure claims are correct Look for:   Charges for item or service not received   Billing for same thing twice   Services not ordered by doctor \ Review MSNs and Part D Explanation of Benefits (EOB) Access myMedicare.gov account for real- time claims activity Detect 60

Call the Senior Medicare Patrol toll free hot line Report 61

  When SMPs identify potential fraud, we work with several entities:   Centers for Medicare and Medicaid Services   Medicare Drug Program Contractors   Office of Inspector General   Department of Managed Health Care   Federal Trade Commission Referring Fraud Complaints 62

“HEAT” Task Force HEAT= Health Care Fraud Prevention & Enforcement Action Team Partners the U.S. Health & Human Services with the Dept. of Justice Targets specific areas of fraud and select cities Returned over $12 billion to Returned over $12 billion to Medicare in

HICAP Counselors are A Front Line Defense Against Medicare Fraud While counseling a Medicare beneficiary in the Call Center, remind them to “Guard their Card” When counseling on-site, alert your client to the many ways that fraudsters can try to scam them 64

This is Mai from Orange County. She responded to an ad in a Vietnamese paper offering free medical services and equipment She was taken to a doctor for quick exam Her MSNs showed claims for multiple services never received She called OC HICAP after seeing a presentation about fraud on Vietnamese TV Investigators put supplier under payment suspension and medical records were requested Supplier failed to provide records; assessed an overpayment for the entire claims universe totaling $5,884,

Meet Mary B. She is not terminally ill. Her grandson reviewed her MSNs and noticed several claims submitted to Medicare from a hospice agency. He complained to HICAP. An onsite was completed at provider’s location and medical records requested for beneficiary. Records were reviewed; the claims were denied. CMS demanded payment reimbursement. 66

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  You are in a position to make a significant contribution to the prevention of health care fraud and abuse   For your interest in and commitment to this work, we thank you sincerely   May you find work as an SMP volunteer both energizing and rewarding Final Thoughts 68