1 emerging issues in healthcare fraud rebecca s. busch, rn, mba, ccm, cbm, cfe, fialcp, fhfma ceo,...

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Emerging Issues in Healthcare Fraud

Rebecca S. Busch, RN, MBA, CCM, CBM, CFE, FIALCP, FHFMA

CEO, Medical Business Associates580 Oakmont Lane, Westmont IL 60559www.medbizassociates.com [email protected] 630.789.9000

August 31, 2009

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Agenda

Fraud: key initiative in healthcare reform Global Perspective on Fraud & Fraud Concepts in

Healthcare Profiling Fraud Review Critical Schemes Review Latest Fraud Issues Who Gets Hurt? Trigger Points

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FRAUD – Technical Definition

Misrepresentation of a material fact consisting of a false representation, concealment or non-disclosure;

Knowledge of the falsity Intent to deceive and induce reliance; Justifiable and actual reliance on the

misrepresentation; and Resulting damages.

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FRAUD – On the front line “Things” or “Events” that hurt people Affecting ones person, home, family,

assets, and community Resulting in disability, financial

devastation, loss of loved ones, and death Leaving a person with a loss of faith, hope,

trust, and sense of identity

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WHY AN ISSUE?

2 TRILLION DOLLAR Industry OIG ROI ON

AUDITS/INVESTIGTATION $17 TO $1

Estimated that $60 billion annually goes to fraud

Source: http://www.oig.hhs.gov/testimony/docs/2009/4-22-09HomelandSecurity.pdf

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OIG areas of concern Payments for unallowable services Improper services not rendered Improper claims submissions Medicare reimbursement rates are too high for certain

services. Payments for inadequately documented services Manipulation of billing systems Inaccurate wage data Manipulative gaming through discharge or transfer of

patients to facilities for financial versus clinical reason. Unreasonable and not medically necessary services


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OIG Identified Vulnerabilities DME suppliers circumventing enrollment

and billing controls High levels of improper Medicare

payment for certain types of CME, prosthetics, orthotics, and supplies (DMEPOS);

Inappropriate reimbursement rate for certain DMEPOS.


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5 Principals of Effective Anti Fraud Activity1. Scrutinize individuals and entities that want to participate as providers

and suppliers prior to their enrollment in health care programs.

2. Establish payment methodologies that are reasonable and responsive to change in the market place.

3. Assist health care providers and supplier in adopting practices that promote compliance with program requirements, including quality and safety standards.

4. Vigilantly monitor the programs for evidence of fraud, waste, and abuse.

5. Respond swiftly to detected frauds, impose sufficient punishment to deter others, and promptly remedy program vulnerabilities.

Source:

http://www.oig.hhs.gov/testimony/docs/2009/4-22-09HomelandSecurity.pdf

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Global Perspective

Primary Healthcare Continuum Secondary Healthcare Continuum Information Continuum Consequence Continuum Transparency Continuum

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Primary Health Care Continuum (“P-HCC”): Clinical, Service, Product, and Financial Integration

Third Party Vendors: Case Managers; legal system; durable medical equipment; drug

manufacture; pharmaceuticals; transportation; labs; billing agents; suppliers; etc.

Third Party Vendors: Case Managers; legal system; durable medical equipment; drug

manufacture; pharmaceuticals; transportation; labs; billing agents; suppliers; etc.

White Collar & Organized Crime: waste, fraud, and abuse.White Collar & Organized Crime: waste, fraud, and abuse.

Employer Plan Sponsor

Office of Personnel

Management Sponsor

Patients:

Insured Employee

Publicly insured

Privately insured

Gov. Employee

Uninsured w $

Uninsured w/ o $

Vendors:undisclosed & disclosed

parties

Plan Sponsors: Payer’s: Private &

PublicPayer’s: Private &

Public

Provider’s:Hospitals

Professional StaffOutpatient CareOffice based careHome based care

Provider’s:Hospitals


Segmented, Fragmented, Insulated, Lacks Service & Price Transparency

Government Plan Sponsor:

Medicare; Medicaid

Private Insurance Plans

E-Health Data Driven Decisions

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Secondary Health Care Continuum (“S-HCC”):Privacy, Security, Confidentiality, and Integrity Integration

(Fraud Detection & Deterrence)…Organized Crime &Terrorist Activity …(Bio-terrorism detection & Deterrence)

(Fraud Detection & Deterrence)…Organized Crime &Terrorist Activity …(Bio-terrorism detection & Deterrence)

Public Policy

Financial Case

Management

Cost

efficiency

“Interoperability Functions”

Direct & Indirect Health Information

Management

Data Analytics

Data Analytics

Data Repository

Data Repository

Nationwide Health

Information Network

Nationwide Health

Information Network

Public Health

Certifications Standards Patient/

Provider Autonomy

Clinical Case

Management

Quality

Safety

“Data Intelligence”(“DI”)

Defense, Enforcement, Research, Innovation, Development, Change,

Growth

Segmented, Fragmented, Insulated, Lacks Interoperability & Optimal DI

E-Health Data Driven Decisions

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Information Continuum (“IC”): Changes in Market & Industry Need

Variable market offerings and applications: operating system; hardware; software; change control; physical and system security.

Variable market offerings and applications: operating system; hardware; software; change control; physical and system security.

Data input

Data Creation,

Processing, transformation

Data output

ElectronicsElectronics

Segmented, Fragmented, Insulated, Non-par Application and Pace

E- Interoperability Drivers: internet, intranet, and extranet systems

ComputersComputers

IndustryIndustry

ComponentsComponents

NetworkingNetworking

Software, languagesSoftware, languages

StorageStorage

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Technology, Innovation, Prevention, Deterrence, Detection, Investigation, Cost and Recovery, Internal Controls, Training and Education

Technology, Innovation, Prevention, Deterrence, Detection, Investigation, Cost and Recovery, Internal Controls, Training and Education

Economic & Human Integrity

Data Creation,

Processing, transformation

Financial & Operational Integrity:

HIP

ARP

OFA

PMA

SMA

CMA

Medical Error

Medical Error

Employer, Patient, Payer, Provider, Vendor, Plan Sponsor, White Collar & Organized Crime Activity

E- Interoperability Drivers: compatible internet, intranet, and extranet systems Non-operability Drivers: incompatible, detached, electronic and paper systems

Financial Error

Financial Error

Business Loss, Compromise,

Demise

Business Loss, Compromise,

Demise

Benefit Loss, compromiseBenefit Loss, compromise

Disability, compromiseDisability,

compromise

Economic Compromise/

Demise

Economic Compromise/

Demise

Health IntegrityHealth

Integrity

Consequence Continuum (“CC”): Complications & Co morbidities

DeathSocietal

implosion

DeathSocietal

implosion

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Market Tools: Technology, Innovation, Prevention, Deterrence, Detection, Investigation, Cost and Recovery, Internal Controls, Training and EducationMarket Tools: Technology, Innovation, Prevention, Deterrence, Detection,

Investigation, Cost and Recovery, Internal Controls, Training and Education

Market Players:

Primary & Secondary healthcare continuum.

Decision making

based on disclosed

parameters

Absolute Facts Incontrovertible

Truth

Integrity of Decision Making:

Transparency

Informal, formal, variable market

rules

Informal, formal, variable market

rules

Considerations: Employer, Patient, Payer, Provider, Vendor, PlanSponsor, White Collar & Organized Crime Activity

Transparency Drivers: social assumptions, laws, balanced disclosure and privacy of personal and corporate transparency, limitations of

access due to technology, contractual or silent limitations.

Risk - Level of threats & Exposure

Risk - Level of threats & Exposure

Political & Personal & Corporate Profit

Political & Personal & Corporate Profit

Level of proprietary

rights

Level of proprietary

rights

Level of Choice compromised when info is

limited

Level of Choice compromised when info is

limitedProtection of personal privacy rights, natural environment

Protection of personal privacy rights, natural environment

Integrity of Decisions

Integrity of Decisions

Transparency Continuum (“TC”):

Corporate & Personal Disclosure

Accuracy, Quality, Integrity &

Completeness of Data Creation,

Processing, Transformation

Accuracy, Quality, Integrity &

Completeness of Data Creation,

Processing, Transformation

No Transparency

Progressive Increase in leverage of

one party over the other

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Health Care Continuum (“HCC”): Follow the $ & PHI

Others: Case Managers; JD’s; DME; Drug Manufacture; Phx; Ancillary

Support; AMB; Labs; Billing Agents; Suppliers; etc.

Others: Case Managers; JD’s; DME; Drug Manufacture; Phx; Ancillary

Support; AMB; Labs; Billing Agents; Suppliers; etc.

Employer Plan

Sponsor

**Office of Personnel

Management Sponsor

Patient:

Insured

Employee

Gov. Employee

Uninsured w $

Uninsured w/ o $

Vendors: undisclosed & disclosed

parties

Government Plan Sponsor

Segmented, Fragmented, Insulated, Lacks Service & Price Transparency

Payer’s: Private & Public

Payer’s: Private & Public

Provider’s: Hospitals


Provider’s: Hospitals


White Collar/ Organized Crime 15

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Private and Public Payers

(TPA)

Private and Public Payers

(TPA)

PBMPBM

PharmacyPharmacy

White Collar and Organized CrimeWhite Collar and Organized Crime

Plan Sponsors

Government

Employer

Office of Personnel

Management

Patients

Insured

Employee

Gov. Employee

Solvent Uninsured

Insolvent Uninsured

consultingand

audit work

ManufacturerManufacturer

WholesalerWholesaler

BrokerBroker

Healthcare Continuum

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PBM Operational Pipeline Chart

Insured Patient

Health Plan

PBM

Pharmacy

Broker

TPA

Pharmaceutical Wholesaler

Pharmaceutical Manufacturer

Recipient of Drug, premium payments to the health plan, cost sharing by paying Pharmacy out of pocket

$

$ Provides Rx benefits to a group, premium/cost payments to the TPA. Recipient of applicable rebates

Provide benefit plan design, may be compensated by health plan, TPA, and or PBM

TPA collects funds from health plan, pays PBM, may be paid by PBM for services

PBM provides payment to Pharmacy for drug costs, receives price discounts for insured patients.

Provides discounts to PBM, receives payments from PBM, provides drug to patient

$

$

DDP

R

R

Sell Products

$

P

$

Audits in the following areas: HIP – Health information audits; ARP- Accounts

Receivable & Fee schedule Audits: OFA – operational flow

assessments & internal controls

TPA Contract

Yes

Plan Sponsor Contract

PBM Contract

Rx Contracts

$ - money exchange

D – Discounted Price

DP- Discounted Product

R – Rebates

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Durable Medical Equipment & Supplies; Research

FDA Approvals if applicable & regulatory compliance & Licenses

Product Manufacture- foreign vs. domestic

Product (re) Distribution primary wholesale

Product (re) Distribution – retail domestic & foreign: Physicians…Pharmacies…Facility Based Care (licensed facility, pharmacists,

physicians)

Research, Regulatory/Gov Requirements, Compliance, Distribution, Packaging, Wholesale, Retail: Requirements & Standards

Product (re) Distribution secondary wholesale

(re) Packaging

(re) Packaging

Contemporaneous, cyclical, recurring activity – create

weak links

Layered Operational flow activity,

complex contracts $

flows, approved relationships

Contractual arrangements

Decision Making Ladder for Pharmaceuticals

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ACCOUNTS RECEIVABLE PIPELINE: ACCOUNTS RECEIVABLE PIPELINE:

Operational Flow Activity (OFA) (ILLICIT Market Activity)Operational Flow Activity (OFA) (ILLICIT Market Activity)

Product Research

FDA & Regulatory Approvals & Licenses

Product Manufacture- foreign vs. domestic

Product (re) Distribution primary wholesale

Product (re) Distribution – retail domestic & foreign: Physicians…Pharmacies…Facility Based Care

(licensed facility, pharmacists, physicians)

Research, Regulatory/Gov Requirements, Compliance, Distribution, Packaging, Wholesale, Retail, Marketing

& Sales: Requirements & Standards

Product (re) Distribution secondary wholesale

(re) Packaging

(re) Packaging

Manipulations of product &

pricing; illicit distr ibutions; introduction

of altered products,

counterfeit

Medically unnecessary distribution

False Research; unlicensed;

noncompliance

Benefit Plan Manipulations; false claims;

vendor, employee,

corporate fraud; organized crime;

kickbacks

Waste, fraud, abuse

Marketing & Sales misrepresentations throughout

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Follow HIP & PHI & $ & HCC: What is the DATA ABERRATION & INTERNAL AUDIT CONTROL ISSUE?

What type of Patient?

Insured

Employee

Gov. Employee

Uninsured w $

Uninsured w/ o $

Who is funding the plan?

Gov. Plan

Premium based Payer

Self funded employer

Data & Documents Observations & Interviews Analytics: $ & Operational SOAP: Patient Information

Source Predication Audit Theory Investigation & Report

What type of Providers?

Hospital, OPS, MD Office,Nursing Home, Other:RX, DME,

What type of Payer?

TPATPA/Premium

Other Parties?

GPO, HMO, PBM, Retail Chain, Distributor, End Customers, ManufactureOther

Who….What….How….Why…..Where…..When

Anomaly Data Analysis ProfilerTable 13: INTERNAL AUDIT PROFILER20

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Fraud Issues

Medical Identity Theft Illicit Provider Rx Sales Illicit Internet Rx Sales Drug Diversion, Adulterated Drugs Counterfeit Drug Activity Theft of limited Resources

(medically unnecessary services)

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Fraud Issues

Vulnerable Patients – Neglect & Abuse Patient Experimentation Off Label Medication Use Provider False Claim Foreign Nationals Shopping Health

Dollars in US Vendor/TPA Fraud

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Medical Identity Theft MIT is the theft of IIHI for the purpose of

misrepresentation of health information to obtain access to property or permanently deprive or harm an individual while interacting within the healthcare continuum. Use of an individual’s identity outside the healthcare continuum is considered identity theft.

When a perpetrator steals all or part of the IIHI elements from a medical record file to open up a credit card account and go on a shopping spree, it is considered identity theft—not medical identity theft. The differentiating factor for medical identity theft is that the stolen information is used for illegal gains within the healthcare domain

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Illicit Prescription Activity Counterfeit Drugs

Adulterated Drugs

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Target Drugs Antibiotics, vaccines Antimalarials Hormones Steroids. Anticancer Antiviral drugs Transplant rejection drugs Anything else available

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Sample: Procrit

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Sample: Procrit

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Sample: PonstanAlthough similar in appearance to the authentic tablets, the counterfeit Ponstan tablet on the left contains no active ingredient. Instead, it is composed of boric acid, brick dust and paint. Boric Acid is a pesticide that can cause gastrointestinal and renal failure.

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The counterfeit Lipitor tablets on the left are nearly identical from the authentic tablets on the right. Only distinguishable to the consumer by their bitter taste, the counterfeit tablets were among more than 18 million counterfeit Lipitor tablets removed from the U.S. supply chain in 2003. Columbian authorities raided this manufacturing site where they found more than 800,000 counterfeit Ponstan tablets, as well as large quantities of Terramycin, packaging for both products, and manufacturing equipment.

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Sample: Viagra

This is a Viagra counterfeiting site in Egypt. Counterfeit tablets were being given their blue coloring using an old cement mixer. Clearly, the manufacturing conditions were far from sterile.

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This an old cement mixer used to give counterfeit Viagra tablets their blue coloring.

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Counterfeit One Touch Basic/Profile Test Strips Counterfeit One Touch Basic/Profile Test Strips, lot

numbers 272894A, 2619932, and 2606340 Lot Numbers 272894A, 2619932, or 2606340

appears on the outer carton and on the inside container (vial).

The outer carton is written in Multiple Languages including English, Greek and Portuguese.

The outer carton is labeled as 50-Count One Touch (Basic/Profile)Test Strip packages

The bottom of the outer carton does not include an NDC number.

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What Else?....Rx Providers “JORGE A. MARTINEZ, M.D. (CLEVELAND):

This investigation resulted in the first known prosecution involving a criminal charge of Health Care Fraud resulting in death.

The case focused on the illegal distribution of pharmaceutical narcotics and billing for unnecessary medical procedures.

The investigation revealed that Dr. Martinez provided excessive narcotic prescriptions, including Oxycontin, to patients in exchange for the patients enduring unnecessary nerve block injections. Dr. Martinez’ actions directly resulted in the death of two of his patients. From 1998 until his arrest in 2004, Martinez submitted more than $59 million in claims to Medicare, Medicaid, and the Ohio Bureau of Worker's Compensation.

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What Else?....Rx Providers In January 2006, a jury found Martinez guilty of 56 criminal

counts, including distribution of controlled substances, mail fraud, wire fraud, Health Care Fraud, and Health Care Fraud resulting in death. Martinez was later sentenced to life in prison.

This investigation was conducted jointly with the HHS-OIG, Ohio Bureau of Workers Compensation, DEA Diversion, AdvanceMed, Ohio Department of Job and Family Services, Anthem Blue Cross Blue Shield and Medical Mutual of Ohio.”[1]

[1] http://www.fbi.gov/publications/financial/fcs_report2006/financial_crime_2006.htm

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What Else?...Drugs BANSAL ORGANIZATION (PHILADELPHIA):

This investigation was conducted jointly with the DEA and IRS and was focused on a Philadelphia-based Internet pharmacy drug distributor which was smuggling drugs into the U.S. from India and selling them over the Internet.

The criminal organization shipped several thousand packages per week to individuals around the country. In April 2005, 24 individuals were indicted on charges of distributing controlled substances, importing controlled substances, involvement in a continuing criminal enterprise, introducing misbranded drugs into interstate commerce, and participating in money laundering. Over $8 million has been seized to date as a result of the charges.

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What Else?...Drugs

As of December 1, 2006, 12 suspects have pled guilty, three have been convicted at trial, four are in foreign custody, and five remain fugitives. This investigation was worked jointly with the DEA, IRS, ICE, USPIS, and the Lower Merion Police Department. I]

[i] http://www.fbi.gov/publications/financial/fcs_report2006/financial_crime_2006.htm.

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Dangerous Doses Operation Stone Cold Florida counterfeit ring Ring charged with trafficking in bad medicine –

indicted in 2003 on charges of racketeering, conspiracy to commit racketeering, organized scheme to defraud, grand theft, dealing in stolen property, sale or delivery of a controlled substance, possession with intent to sell prescription drugs, sale and delivery of a controlled substance and purchase or receipt of a prescription drug from an authorized person.

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Perpetrators

Michael Carlow – ex-convict Candace Carlow, wife Thomas Atkins, brother in law Marilyn Atkins, mother in law Jose L. Benitez, business partner 14 other parties $42 million dollar enterprise

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Profile of one victim Timothy Fagan 16 years of age Receive a successful live transplant Mom injecting Epogen at home once per

week Timothy experienced excruciating pain Mom checks in with Doc – receives notice

of counterfeit Epogen

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How did this happen? Investigation found that no

chain of custody exists once the drug leaves the manufacturer.

Drugs lost in the secondary wholesaler market

Anyone can apply for a license

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AmgenDrugmaker2,000 U/ml

Cardinal8,931 boxes2,000 U/ml

AmerisourceBergen3,363 boxes2,000 U/ml

J& M PharmacareFL Pharmacy

Bought 12,294 boxes2,000 U/ml

Armando RodriguezFL Go-Between12,294 boxes

2,000 U/ml

Jose GrilloAlleged FL Counterfeiter

2,000 U/ml → 40,000 U/ml

Silvino MoralesRelabeled Vials

Printer in HialeahMade Counterfeit

Labels

Playpen SouthFL Strip Club

Nick Just/Paul Perito

Double JUnlicensed FL

Wholesaler

Costal MedicalVA Wholesaler

135 BoxesLot 2970

Tradewinds TradingTX Wholesaler

135 boxesLot 2970

Rebel DistCA

Wholesaler

GrapevineTrading

OH Wholesaler

AD PharmaceuticalFL Wholesaler

2 boxesLot 2970

Medix IntlCarlos Luis

TX Shell Co.180 Boxes Lot 2970

Y W ConsultantsUnlicensed FL

Wholesaler

Ivan VillarchaoFL

45 BoxesLot 2970

Armin MedicalNH Wholesaler

129 BoxesLot 2970

Express RXEddie Mor

TX Shell Co.180 Boxes Lot 2970

Premier Medical GroupGA Shell Co.

460 Boxes Lot 1091812 Boxes Lot 2970

Optia MedicalMark NovoselUT Shell Co.

45 BoxesLot 2970

Jemco MedicalFL Wholesaler

16 BoxesLot 2970

AmeRxSusan CavalieriFL Wholesaler

182 BoxesLot 2970

CSGTN Wholesaler

460 BoxesLot 1091

CSGTN Wholesaler

812 BoxesLot 2970

Dialysist WestAZ Wholesaler

1056 Boxes, Lot 2970

Dialysist WestAZ Wholesaler

461 Boxes, Lot 1091

AmerisourceBergen KY Distribution Center1517 Boxes

CVS, NY

Timothy Fagen

--- probable sales∙∙∙ unknown sources and sales→ confirmed sales

Manufacturer

National Wholesaler

Gray Market

Regional Wholesaler

National Wholesaler

PharmacyPatient

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Jury Convicts Miami Physician and Nurse of $11 Million HIV Infusion Medicare Fraud

Miami physician Ana Alvarez-Jacinto, 54, and nurse Sandra Mateos, 43, were found guilty by a Miami jury for their roles in an $11 million HIV/AIDS infusion fraud scheme.

Evidence at trial established that both defendants worked at Saint Jude Rehab Center Inc. ( St. Jude ), a clinic that purported to specialize in treating HIV/AIDS patients. St. Jude was operated and owned by indicted fugitives Carlos Benitez and Luis Benitez, and managed by convicted co-conspirators Aisa Perera and Mariela Rodriguez.

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Evidence at trial proved that between June and November 2003, Alvarez-Jacinto, with the assistance Mateos, ordered hundreds of medically unnecessary HIV infusion treatments at the clinic.

Evidence at trial also established that HIV-positive Medicare patients were brought to the clinic by Carlos and Luis Benitez for the purpose of getting cash payments in exchange for allowing the clinic

to bill for unnecessary treatments.

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Testimony at trial revealed that defendant Mateos and other co-conspirators paid the patients cash kickbacks of approximately $150 per visit.

After patients had been paid, they agreed to allow Alvarez-Jacinto and her co-conspirators to prescribe, and sometimes administer, unnecessary infusion treatments.

According to testimony at trial, St. Jude then billed Medicare for approximately $11 million for the unnecessary services. For those claims, Medicare paid more than $8 million to St. Jude.

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WHO GETS HURT? HIV (Human immunodeficiency virus)

primarily infects vital cells in the human immune system

AIDS (Acquired immune deficiency syndrome) the progression of disease

These individuals mostly die from opportunistic infections or malignancies associated with the progressive failure of the immune

system

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WHO GETS HURT?

The aim of antiretroviral treatment is to keep the amount of HIV in the body at a low level. This stops any weakening of the immune system and allows it to recover from any damage that HIV might have caused already.

AIDS can attack cells in the immune system for example Platelets: Cells that help the blood to clot.

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WHO GETS HURT? $11 million dollars stolen $1,000 per infusion 11,000 patients (2.3%) At the end of 2007, the estimated

number of persons living with AIDS in the United States and dependent areas was 468,578

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March 2009 Arrest in Florida

Two Miami-area residents pleaded guilty today in connection with a $10 million Medicare fraud scheme involving HIV infusion clinics

$11 million dollars stolen $1,000 per infusion 10,000 patients

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March 2009 Arrest in Florida To make it appear that the patients

actually had low platelet levels, Del Cueto admitted that she and her co-conspirators used chemists, including Dagnesses, to manipulate the blood samples drawn from Midway's patients before the blood was sent to a laboratory for analysis.

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More IV infusion Cases November 2004, brothers Carlos and Luis

Benitez conspired to submit about $110 million in false claims to the Medicare program for HIV infusion services. 110,000 patients neglected

Garcia faces a maximum of 85 years in prison. Freire faces a maximum of 65 years in prison if convicted on all charges for $56 million. 56,000 patients neglected.

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The Numbers Tell the Story

Just 4 Cases Alone 187,000 Patients 40% of Patient Living in the US

with HIV/AIDS

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Trigger Points: DATA Data – Volume of claims by provider Reconciliation of infusion claims with

laboratory tests, CMS-1500 Data, UB-92 Data

Address association, vendor trending, billing agent trending, supply trending

Clinical data analysis CDC Statistics on Occurrences

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Nursing Home Owner Convicted in Bedpan Death

February 2009 The owner of a nursing home in Albuquerque, New Mexico, has been found guilty of felony abuse and neglect in connection to charges stemming from an incident on Christmas day in 2005.

As reported by Andrews Publications, Richard Gerhardt, a 76-year-old resident at the nursing home, who was recovering from a broken hip, was placed on a bed pan and left there for 24 hours.

According to reports, the bedpan became imbedded in his skin, causing an open wound that became infected and resulted in his death 5 days later.

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Who Gets Hurt?

Vulnerable population – Elderly

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The Number Tells the Story In 2004, about 159,000 current U.S.

nursing home residents (11%) had pressure ulcers. Stage 2 pressure ulcers were the most common. (CDC)

15,281 Nursing Homes in US 1,368,230 Nursing Home residents 92.3% with deficiencies 9.7% with no deficiencies 17.6% with serious deficiencies

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Trigger Points: Top 10 Issues

Accident Environment 37% Food Sanitation 35% Quality of Care 29% Professional Standards 28% Comprehensive Care Plans 22%

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Trigger Points: Top 10 Issues

Housekeeping 20% Incontinence/Urinary Care19% Pressure Sores19% Unnecessary Drugs19% Infection Control18%

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Doctor experimented on patients, suit alleges February 2009

A whistleblower complaint accuses former osteopathic surgeon Dr. John A. King of experimenting on 26 of his patients.

The federal complaint says King used medical devices in ways that hadn't been approved by the FDA and received illegal kickbacks for doing it.

"King and David McNair [King's physician assistant] were conducting clinical research and human patient experimentation when they performed the anterior lumbar inter-body fusions" on eight patients, the "qui tam," or whistleblower, complaint states.

"King and McNair took studies that failed in laboratory animals, and then, without any reasonable basis to conclude that they would be successful, began to experiment on humans," the complaint says.

King generated 124 medical malpractice lawsuits during his short tenure at Putnam General Hospital between November 2002 and June 2003.

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He's lost his medical license in numerous states, including West Virginia. Putnam General's former owner, Hospital Corporation of America, has paid out approximately $100 million to settle King-generated lawsuits.

These new charges against King are contained in a previously sealed whistleblower complaint filed against EBI Inc. on May 12, 2006, in federal court in Charleston.

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Along with King and McNair, the complaint targets two companies:

Wright Medical Technology Inc. based in Arlington, Tenn., made Allomatrix, a bone fusion material that failed to work properly during two experimental studies performed on rats and rabbits. A third study, using pig-tailed macaques, rare primates native to Southeast Asia, showed "questionable" benefits.

EBI Inc., a subsidiary of Biomet Inc. in Parsippany, N.J., made spine stimulating devices King used during his surgeries. EBI allegedly paid King a bonus each time he inserted one of their "Ionic Spacers" into a patient's spine.

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No consent, no review According to the complaint, King and McNair

undertook deliberate, well-planned experiments on these patients.

For example, they allegedly made sure half the patients were male and half female. They implanted 12 patients with one type of device, and 14 patients with another.

Despite this, patients say they were never informed they would receive an experimental device.

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"If any patients were to have been participants by design in an experimental protocol such as that conducted by King and McNair, appropriate informed consents would have to have been obtained from the patients," the complaint states.

There is no evidence patients were asked to sign a consent form.

"Additionally, institutional review board approval would have had to have been granted by the hospital where the clinical study was undertaken" and all procedures "approved by the research committee of the medical center."

Those procedures were never followed at Putnam General. EBI was fully aware of what King was doing at that time, the

qui tam complaint alleges.

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Who Gets Hurt?

The Patient 30 Plus people and their families

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Trigger Points Data Statistical Sampling of Occurrence Data – Volume of claims by provider Reconciliation of infusion claims with

laboratory tests, CMS-1500 Data, UB-92 Data Address association, vendor trending, billing

agent trending, supply trending Clinical data analysis

Key Patient Documents: Patient Consent Forms

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$425 Million Cephalon Civil Settlement and Criminal Fine;

In America's LargestBiotechnology Medicaid Fraud Case; Qui Tam Whistleblower

Attorney Brian P. Kenney, Esq. Filed First Complaint With Client's Off-Label Marketing Allegations In 2003;

$375 Million Civil Settlement, $50 Million Corporate Criminal Fine Today

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$425 Million Cephalon Civil Settlement and Criminal Fine

Many Schemes: Intensively marketing Actiq (contains fentanyl, an opioid agonist and a

Schedule II controlled substance) to physical medicine and rehabilitation, and pain management specialists;

Encouraging sales reps to make false statements about the efficacy of Gabatril, and providing dosing recommendations when none have been determined for depression;

Leaving "huge doses of Gabatril" with psychiatrists when no approved use or dosage existed for psychiatrists;

Encouraging sales representatives to recruit psychiatrists by paying the physicians honoraria in return for recommending Gabatril to other psychiatrists; and

Assisting physicians in securing Medicaid reimbursement for Actiq when off-label use was ineligible for Medicaid payment.

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Who Gets Hurt? Studies have shown the off label use can

generate more adverse drug reactions

Significant number of studies in off label use with children – specifically psychotropic medications

Market Dilemma: The FDA has stated,1 and the American Medical Association agrees,2 that physicians are free to prescribe approved drugs for any scientifically supported use, whether on- or off-label.

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Trigger Points

Scientifically valid studies Marketing materials CDC occurrence analysis by diagnosis

and prescription medication

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Worldwide injunction granted against American living in B.C.

Thursday, October 23, 2008 Vancouver - A B.C. Supreme Court judge has granted a worldwide injunction to freeze the cash and assets of an American man who has been living in Vancouver for two years and is wanted in the U.S. for a $54-million US Medicare fraud.

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Peter G. Rogan, 62, formerly of Valparaiso, Ind., was detained May 25 by the Canada Border Services Agency when returning to Vancouver from a trip to China.

Paula Faber of the Immigration and Refugee Board in Vancouver said Rogan was detained by the CBSA for "serious criminality" but was released June 3 on terms and conditions after an IRB hearing.

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Rogan sold Edgewater Hospital but continued to control it and medical center through various management companies he owned, U.S. authorities say.

The hospital closed in December 2001 and entered bankruptcy in 2002, when four doctors, a vice president and the management company pleaded guilty to federal criminal health-care fraud charges involving the payment of kickbacks for patient referrals and medically unnecessary hospital admissions, tests, and services.

In September 2006, following a trial, U.S. District Court Judge John Darrah entered a judgment against Rogan for $64,259,032

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Who Gets Hurt

331 hospital beds 2002 Average 183 patients per

hospital bed 607,702 potential victims – one

facility

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Trigger Points for Fraud Data Statistical Sampling of Occurrence Data – Volume of claims by provider Reconciliation of infusion claims with laboratory

tests, CMS-1500 Data, UB-92 Data Address association, vendor trending, billing

agent trending, supply trending Clinical data analysis Key Patient Data: ICD code and CPT

reconciliation, Admitting Diagnosis, POA codes

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Freeport doctor sentenced for health care fraud 2009

Dr. Robert L. Ignasiak Jr. was sentenced today by Senior U.S. District Judge Lacey A. Collier to 292 months in prison, fined $1 million, and ordered to pay an additional $4,300 Special Monetary Assessment.

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Ignasiak was found guilty on Nov. 3, 2008, of 43 charges including: health care fraud; dispensing controlled substances, including fentanyl, hydrocodone, diazepam, chlonazepam, morphine, and alprazolam, the use of which resulted in the death of two persons; and unlawfully dispensing controlled substances, including oxycodone, morphine, fentanyl, hydrocodone, alprazolam, diazepam, clonazepam and carisoprodol

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Freeport doctor sentenced for health care fraud 2009 evidence that Ignasiak prescribed controlled

substances to patients knowing the patients were addicted to the substances, misusing the substances, or were "doctor shopping," and were requesting additional quantities of controlled substances for their drug habits.

Ignasiak attracted patients from across the Southeastern United States because of his willingness to prescribe controlled substances with little or no medical justification

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nearly all of his patients were prescribed controlled substances, even though he claimed to be a family practitioner with no specialty in pain management or in psychiatric medications.

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Who Gets Hurt?

Active Addict Future Addicts Family members of addicts The patient – disability death Lost resources for legitimate

patients

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Trigger Points: Data Statistical Sampling of Occurrence Data – Volume of claims by provider Reconciliation of infusion claims with

laboratory tests, CMS-1500 Data, UB-92 Data

Address association, vendor trending, billing agent trending, supply trending

Clinical data analysis Key Patient Data: ICD code, CPT, Medication

reconciliation, and Admitting Diagnosis,

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'Humanitarian' gets prison term in Medicaid fraud Melee Kermue, 32, pleaded guilty in October to a

scheme in which his Reynoldsburg-based health-care business submitted an estimated 4,800 fraudulent claims to the Ohio Medicaid program.

Must repay the $272,525 in claims as part of his sentence

He came to Ohio in 1997, earned an associate degree and founded Hope Home Health Care Inc., which provided skilled nursing to Medicaid patients in their homes.

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'Humanitarian' gets prison term in Medicaid fraud Federal prosecutors said the company submitted

claims to Medicaid that included false names and dates of service and claims for services provided by hospitals, not in clients' homes.

Kermue deserved leniency, his attorney, Jeremy Dodgion, said, because he returned to the U.S. on his own to face the charges and has lived as a respected politician and humanitarian in Liberia. A nonprofit organization he operated in the western African nation provided housing for 450 people and medical supplies to refugees

Fraud for profit or philanthropy?

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Who Gets Hurt?

2,725 – 3,633 Ohio Medicaid Patients

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AmeriChoice of Pennsylvania, Inc. has agreed to pay $1.6 million

Enter into a corporate integrity agreement Agreed to maintain a claims processing system

that will allow providers to query the status of unsettled claims, to settle allegations by the U.S. Attorney for the Eastern District of Pennsylvania and the HHS OIG that the company violated the False Claims Act.

The settlement requires AmeriChoice to pay 95% of clean claims within thirty days of receiving all necessary documentation to process the claim.

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AmeriChoice of Pennsylvania, Inc. has agreed to pay $1.6 million

The government alleged that from September 1995 through June 1998, AmeriChoice did not pay providers' health claims in a timely fashion or did not pay them at all.

They did not answer recipient call, altered CPT codes, and other issues related to performance guarantee data

The complaint also alleged that the company did not report claims processing data accurately to regulators. AmeriChoice, previously known as Healthcare Management Alternatives Inc.

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Who Gets Hurt?

The patient/beneficiary The integrity of the program Legitimate Providers

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Trigger Points

Hot line beneficiary complaints Provider complaints Excessive denials Performance Guarantee Reports

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Who Gets Hurt? You

303,824,640 US citizens 832 potential victims on a daily basis

6,706,993,152 World Population 18,375 potential victim on a daily

basis

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Emerging Issues in Healthcare Fraud

Rebecca S. Busch, RN, MBA, CCM, CBM, CFE, CHS-III, FIALCP, FHFMA

CEO, Medical Business Associates580 Oakmont Lane, Westmont IL 60559www.medbizassociates.com [email protected] 630.789.9000

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1 emerging issues in healthcare fraud rebecca s. busch, rn, mba, ccm, cbm, cfe, fialcp, fhfma ceo,...

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