For Dr. Carla L. Kakutani, it has become increasingly challenging to obtain durable medical equipment (DME) for her Medicare patients.

In addition to proving equipment is medically necessary, a 2013 rule requires physicians to document that a face-to-face encounter occurred between a patient and doctor or other health provider within 6 months of the DME order. (Enforcement of the rule has been delayed, but many physicians are currently complying with this policy.) Dr. Kakutani understands the added regulations are meant to prevent fraudulent billings, she said, but the heavy paperwork and additional red tape are burdensome.

“The problem is, [the process] turns into this back and forth between you, the equipment company, and Medicare,” said Dr. Kakutani, a family physician in Winters, Calif. “Meanwhile, the patient is waiting, and you’re being distracted from other things. The bad apples are making life rough for the rest of us.”

As Medicare turns 50 this year, Dr. Kakutani is not alone in her frustrations. In recent years, the U.S. Department of Health & Human Services has greatly expanded its efforts to combat Medicare fraud, and physicians across the country are feeling the effects.

The government’s primary antifraud tool is the Health Care Fraud Prevention and Enforcement Action Team (HEAT), created in 2009 to identify and investigate health fraud and abuse. CMS also works with an array of contractors to detect Medicare fraud, including comprehensive error rate testing (CERT) contractors, Medicare administrative contractors (MACs), Medicare drug integrity contractors (MEDICs), recovery audit program auditors (RACs), and zone program integrity contractors (ZPICs). In 2010, CMS launched the Fraud Prevention System (FPS), a predictive analytics technology that runs algorithms on all Medicare claims prior to payment. And in 2012, CMS created the Program Integrity Command Center that brings together investigators from Medicare, Medicaid, and the law enforcement community to develop predictive analytics that identify fraud and mobilize a rapid response.

Just how much Medicare fraud is happening at any given time is difficult to measure. In 2014, the federal government recouped $3 billion in Medicare- and Medicaid-related fraud settlements and judgments, according to an HHS analysis. In 2013 and 2012, the government recovered about $4 billion each year. And it’s nearly impossible to determine the volume of Medicare fraud committed by doctors, said Dr. Julie Taitsman, chief medical officer for the HHS Office of Inspector General.

“Getting at the actual amount of Medicare fraud in general, or Medicare fraud by physicians, is incredibly difficult,” Dr. Taitsman said in an interview. “We can tell you about the fraud we’ve identified, but we don’t know the total body of fraud.”

Dr. Taitsman stressed that all physicians play a major role in preventing health fraud and improving the quality of the Medicare system.

“Why it’s so important for physicians to practice with integrity – and we do believe that the vast majority of physicians practice with integrity – is because physicians control the bulk of care and services that [Medicare] patients receive,” Dr. Taitsman said. “That’s why it’s so important for physicians to be our partners in promoting high-quality care, promoting efficiency and compliance with the rules.”

But continually changing rules and guidelines make it difficult for many doctors to do just that, said Dr. James Szalados, an anesthesiologist and critical care physician based in Rochester, N.Y. Updates to payment rules, new OIG work plan targets, and growing documentation requirements can be overwhelming for practices.

“It’s not just the number of regulations, but it’s also the rate of change,” said Dr. Szalados, who is also an attorney. “For most doctors, it’s terrifying. They can’t keep up.”

Adhering to the latest regulations generally means hiring outside attorneys, consultants, and financial auditors who can help doctors self-police their practices, Dr. Szalados said.

Physicians also face Medicare fraud accusations from more directions than in the past, said Michael E. Clark, a Houston-based health law attorney and chair of the American Bar Association health law section. In addition to government claims, whistle-blower provisions under the False Claims Act allow individuals to file lawsuits alleging fraud and abuse on behalf of the government. If the government intervenes and the suit is successful, a whistle-blower can take home 15%-25% of money recovered. In 2014, the number of whistle-blower suits exceeded 700 for the second year in a row, according to the Department of Justice.

“A lot of people bringing these false claims actions are former or disgruntled employees or other doctors,” Mr. Clark said. “You might have a technical, regulatory type of theory, and yet it can be quickly changed into a fraud and abuse case.”

New laws have added to the challenge, Mr. Clark said. The Fraud Enforcement and Recovery Act (FERA), enacted in 2009, expands potential liability for false claims by applying the FCA to more entities and a larger range of transactions. The law also reduces the proof required to establish fault.

“FERA took away a lot of defenses that had been used successfully by defense counsel over the years on technical issues,” Mr. Clark said.

The antifraud climate has led many physicians to leave private practice or merge with hospitals or larger health systems, Dr. Szalados said. Other doctors have resorted to intentionally underbilling to avoid claim scrutiny, according to Dr. Robert A. Lee, who serves on the board of directors for the American Academy of Family Physicians . After a third-party compliance review, Dr. Lee’s private practice felt the best course of action was to bill more conservatively, he said.

“We kind of overdocument and undercode,” Dr. Lee said in an interview. “Of course that’s not fair to the physicians because they’re not billing for what they did do.”

On a more positive note, physicians are getting better at internal auditing and developing stronger compliance programs that address billing errors, said Alex T. Krouse, a health law attorney based in Mishawaka, Ind.

“I do think health care providers are getting more sophisticated and are really believing in the compliance-related function,” Mr. Krouse said in an interview. “That is helping and reducing the risk quite a bit.”

While antifraud enforcement will likely increase in the future, physicians that follow regulations and implement recommended protocols shouldn’t be too worried, Mr. Krouse added.

“If you’re a group, and you’re doing internal audits and you’ve got a compliance program in place, and you’re really working to have a compliant organization, the government’s aggressiveness and fraud detection is going to be minimal,” he said. “The aggressive tactics are really for those groups or organizations that have a blatant disregard for these processes.”

8 pro tips for avoiding fraud accusations

The possibility of coming under Medicare fraud scrutiny strikes fear in the heart of most physicians. Here’s what health law experts and federal officials recommend to stay in the clear:

• Designate a compliance officer. Assigning a specific employee to keep track of changing laws and regulations can help physicians remain compliant with antifraud regulations, said Mr. Krouse. The compliance officer should lead compliance efforts, inform staff of relevant rule changes, and take charge if billing practices come under government scrutiny.

• Retain a health law attorney. Seek the guidance of an experienced health law or Medicare fraud defense attorney should questions or billing problems arise, Mr. Clark recommended. Business or staff attorneys do not always have the needed expertise and can sometimes lead practices astray during critical times. Consider retaining a qualified, go-to health law attorney to answer questions and assist during crises.

• Develop a compliance program. Create strong compliance plans to address potential fraud, abuse, and billing issues, Dr. Taitsman advised. There is no one-size-fits all compliance plan, but the government offers suggested guidance about what plans should entail. No practice is too small to set up a compliance plan, she said.

• Perform internal audits. Internal audits should be a regular practice – annually or biennially – for all physicians, Mr. Krouse said. They can be completed by staff or a consultant.

• Send audit results to an attorney. If an internal audit is completed, the results should be conveyed first to an attorney, Mr. Clark said. Audit results shared directly with members of the medical practices are not privileged and could be communicated to the government. If an attorney shares audit results with physicians and practice leaders, the information is protected by the attorney-client privilege. The process limits the ability of staff members or disgruntled employees from sharing audit information or seeking whistle-blower claims.

• Build a strong disclosure protocol. The government is usually more lenient with health providers who are forthcoming about billing mistakes, Dr. Szalados said. Disclosing potential health fraud or billing errors can save the stress, time, and money associated with a government-initiated investigation. Under the Affordable Care Act, providers must return overpayments within 60 days of identifying them. Failing to report overpayments can lead to liability under the False Claims Act .

• Address billing errors immediately. If overbilling errors or systemic mistakes are found, doctors must do more than simply repay the government, Mr. Krouse said. Practices also must change their billing practices and develop an improvement plan. Have a process in place for how billing and coding issues will be addressed in the present and in the future, he recommended.

• Formulate a correction plan. Should a practice come under Medicare fraud suspicion, physicians should immediately analyze past billings. Conduct a thorough internal investigation that includes the extent of the problem and the scope of its threat to the practice, Mr. Krouse added. Create a corrective action plan and outline it to the government. A strong corrective plan goes a long way in negotiating settlements with the government, he said.

Various online resources are available to help physicians prevent Medicare fraud including a roadmap from CMS and guidance for new physicians by the OIG. On Twitter @legal_med


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