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Medicare Program Promotes Bounty-Hunter “Zeitgeist” Mentality

[By Dr. David Edward Marcinko; MBA]

Publisher-in-Chief 

According to a recent report in the Wall Street Journal, hospital groups have launched a vigorous campaign against expanding a pilot program to audit Medicare claims. And, it seems the most onerous aspect of the program is a contingency fee-schedule that encourages auditors to be aggressive.

Evolving Program Details

The program initially launched in California, Florida and New York and soon to be expanded nationwide, recouped $247.4 million in overpayments in fiscal year 2007 alone. It relies on private-sector auditing firms to examine claims filed by hospitals and other medical providers and then pays them contingency fees based on how much the government saves. 

Outcomes-to-Date

As an example of its success, the WSJ reported that in FY 2007, auditors identified $357 million in overpayments [$17.8 million or 7.1% of which were overturned on appeal], according to the Centers for Medicare and Medicaid Services [CMS]. Payments for contingency fees and other administrative expenses totaled $77.7 million. Auditors also found $14.3 million in Medicare underpayments.

Support versus Criticism

While supporters of the program say the contingency fees serve as an incentive, critics say it encourages auditors to rely on a “‘bounty hunter’ payment mechanism.”  

Same old Economic Song

Of course, most long-time observes of the compliance and audit scene realize that this zealous zeitgeist mentality is not new.

For example, under the Health Insurance Portability Accountability Act [HIPAA], the Department of Health and Human Service [HHS] started an “Incentive Program for Fraud and Abuse Information” [IPFAI] almost a decade ago. 

In that January 1999 pilot program – which continues in modified form – HHS paid fees ranging from $100-1,000 to Medicare recipients who reported abuse. To assist patients in spotting fraud, HHS even published examples of physician potential fraud, which include: 

• Medical services not provided
• Duplicate services or procedures
• More expenses services or procedures than provided (upcoding / billing)
• Misused Medicare cards and numbers
• Medical telemarketing scams
• Non-medical necessity, etc. 

To discourage flagrant allegations regulations require that reported information needed to directly contribute to monetary recovery for activities not already under investigation. 

Assessment

Nevertheless, expect a further erosion of patient confidence, as CMS continues to view all healthcare providers – and now hospitals and related healthcare organizations – in the same light as “bounty- hunters”. 

Ironically, this precise same phenomenon was reported in both the first and second editions of the book “The Business of Medical Practice”. 

And so, please remember all medical colleagues – forewarned is forearmed. 

More information: http://www.springerpub.com/prod.aspx?prod_id=23759 

Speaker: If you need a moderator or a speaker for an upcoming event, Dr. David Edward Marcinko; MBA is available for speaking engagements. Contact him at: MarcinkoAdvisors@msn.com

Filed under: Risk Management | Tagged: Coding and Compliance | 6 Comments »