With billions at stake, their job is to ensure money goes where it’s supposed to

With billions at stake, their job is to ensure money goes where it’s supposed to
By John Campbell, for SBT
When asked why he robbed banks, notorious bank robber Willy Sutton is reputed to have answered, “Because that’s where the money is.” With expenditures of $1.1 trillion, the same larcenous reasoning appears to apply in the health-care field; the industry is ripe with fraud and abuse — a situation which has not only led to perennial calls for reform, but which has also spawned a healthy fraud-fighting industry.
Based on 1997 figures, the government’s General Accounting Office estimates that health-care fraud, abuse and waste costs taxpayers 10% of annual spending, or $100,000 billion, making estimated Medicare fraud of $13 billion look like a footnote.
While the problem is huge on a nationwide basis, local observers say it’s not so bad in Wisconsin. But there’s still enough activity to support an industry which monitors the spending.
If there’s a positive side of the fraud and waste situation, it may be the job creation in that monitoring industry. Like a huge gravitational planet, the health-care industry has attracted a constellation of satellite services, where its occupants communicate in a language of acronyms and med-speak unintelligible to outsiders.
CPTs (current procedural terminology) are codes that define payments for physicians’ services. UB92 codes, for hospital inpatient charges, and codes for ambulance services (durable medical equipment) are examples of CPTs, just to name a few.
Making sense of all that are those in businesses such as Accurate-Plus Billing in Oconomowoc. Susan Pipps, the owner, is a certified coder. She’s also president of the local chapter of the American Academy of Procedural Coders.
A code designation determines what a health-care payer pays for health-care claims, related procedures and services. But coding changes so frequently that coders like Pipps attend training programs on an annual basis. Her company has hospital and physician clients who pay her to ascertain accurate billing. Errors in coding constitute fraudulent violations, whether the mistakes are intentional or not. A single violation can draw a $10,000 fine. There are about 12,000 certified coders in the United States; 150 in Wisconsin.
“The State Medical Society says there’s more under-coding going on in Wisconsin than over-coding,” Pipps said. “Most Medicare fraud occurs where the largest groups of retired people reside, states like Florida and Texas.”
According to a survey done by the Health Insurance Association of America, three types of fraudulent practices account for 57% of health-care losses: 1) billing for services not rendered, 2) over-coding procedures to raise the level of payment and, 3) billing from two or more providers for the same service to the same patient on the same day.
Pat Rinzel, a former ICU nurse with orthopedic experience, started Rinzel and Associates in Germantown six years ago to work with insurance claims departments as an external auditor.
“The personnel within insurance companies who pay the claims and try to detect abuse, mistakes and fraud are often overwhelmed by volume and medical intensity,” Rinzel says. “Insurance company personnel can often spot errors like wrong coding, but simply don’t have the time and the on-the-street experience to catch a lot of errors and abuse.”
Her firm conducts seminars for clients and their personnel, in addition to investigating claims and doing hands-on-reviews aimed at justifying claim payments.
Medicare fraud decreased 45% from l997 to l998, down to $13 billion from $20 billion based on reports from the Department of Health and Human Services. Perhaps the increased penalties imposed by the 1996 Health Insurance Portability and Accountability Act had some affect. One provider, convicted on more than two dozen fraud counts, was sentenced to 7-1/2 years in prison and fined more than $10 million dollars.
Under HIPPA and newer provisions in the l997 Balanced Budget Act, fines for Medicare fraud increased from $2,000 to $10,000 per violation. Second offenses carry a five-year-suspension from participating in Medicare plus monetary penalties. Third-time offenders get excluded for life, plus criminal and civil charges.
The Office of the Inspector General and the Department Of Health and Human Services issued five fraud alerts involving providers of health-care services:
1) Joint-venture relationships between physicians, hospitals and DME (durable medical equipment) suppliers which could violate anti-kick-back statutes;
2) Routine waiver by physicians of Part B co-payments and deductibles under Medicare;
3) Hospital incentives and perks paid or given to physicians for referrals;
4) Prescription drug companies’ bonuses, rebates and incentives to physicians for prescribing their trade-named-drug versus a generic brand that costs less;
5) Special arrangements for services with outside laboratories.
Examples of those fraudulent practices vary from ambulance companies billing Medicare for transporting dialysis patients who are capable of taking a taxi or driving themselves, to an MRI (magnetic resonance imaging) service with a record of 2,000 claims in two weeks totaling $2 million dollars.
Denise Vollbrecht, a certified coder, operates Accurate Provider Reimbursement, a company that audits health-insurance payers, some of which are self-insured companies. In June she became a managing partner in a new, larger company called Meta Star Claim Check with offices in Madison and Milwaukee.
“Among other services, we offer very sophisticated software programs to detect coding errors like bundling or unbundling charges. For example, the code for reduction of a leg fracture includes application of the cast. Those procedures are bundled under one code. If the claim comes through with two separate charges, unbundling, one for the fracture reduction and another for the cast, the computer kicks it out. With our computer programs we have found self-funded groups overpaying claims by as much as 6%” Vollbrecht says.
Some abuse occurs within the physician referral network that’s questionable and difficult to challenge. Take the case of a 70-year-old patient who had surgery at a suburban hospital.
During his hospital stay he was visited by a psychiatrist, who told the patient he was asked to stop by because the patient appeared depressed after surgery. Later, when the patient received his explanation of medical benefits from Medicare, one of the items paid was $185 for psychiatric services. Medicare paid it without question.
Toni Helgeson has been in the insurance industry for 30 years. In her consulting operations she works with insurance companies and third-party administrators in administrative areas. She has been vice president of claims for what is now Humana in Green Bay and American Medical Security, a third-party administrator near Green Bay, where she established fraud departments for both companies.
Falsifying claims is the most frequent consumer fraud, Helgeson, says. “We’ve had a number of fraud cases in both Appleton and Green Bay,” she notes. “A payment system simply cannot function without a complete program to identify, investigate, resolve and deter abusive and fraudulent activities.”
When asked about the Health Care Financing Administration’s HCFA proposal to eliminate the explanation of medical benefits report to Medicare recipients, Helgeson replied, “That’s the worse thing they can do. How can the public help reduce abuse and waste if they don’t know what Medicare pays for?”
9-9-1999 Small Business Times, Milwaukee