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AAA Training Manual for S.O.R.T. (Seniors Organized to Restore Trust)

• Operation Restore Trust
• Seniors Organized to Restore Trust
• What is Health Care Fraud and Abuse?
• General Introduction to Medicare
• Acknowledgements

Operation Restore Trust

Operation Restore Trust (ORT) began as a federal-state partnership formed to combat fraud and abuse in the Medicare and Medicaid programs. It targeted provider fraud in the nursing home, durable medical equipment, home health, and hospice industry in five states where nearly forty percent of Medicare and Medicaid dollars are expended.

ORT combined the efforts of agencies within the U.S. Department of Health and Human Services and state partners to 1) increase public awareness of fraudulent practices, 2) reduce and prevent the incidence of such practices, 3) detect and punish wrong doing, and 4) encourage self-monitoring and reporting of fraud by provider companies.

Efforts begun under ORT have been greatly expanded, in terms of types of providers, geographical areas covered, and mechanisms for preventing, detecting, and punishing unethical business practices, with passage of the "Health Insurance Portability and Accountability Act of 1996" (Kennedy/Kassebaum Act). It also specifically provides for the establishment of a fraud and abuse program.

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Seniors Organized to Restore Trust

Seniors Organized to Restore Trust (S.O.R.T.) began with a grant awarded to the District III Area Agency on Aging by the U.S. Department of Health and Human Services’ Administration on Aging. The award was one of twelve nationwide grants designed to recruit and train retired professionals who would identify fraud and abuse in the Medicare and Medicaid programs. Volunteers work in their own communities and in local senior centers to help identify deceptive health care practices, such as overbilling, overcharging, or providing unnecessary or inappropriate services. There are three primary objectives to the program:

To train 140 aging network professionals who will identify and refer potential health care fraud and abuse to SORT Specialists. These professionals will attend a one-day training session.

To train 50 SORT Specialists who will provide education, advocacy and counseling services to individuals, their families, and the general public regarding potential fraud and abuse within the Medicare and Medicaid programs. The SORT Specialists will also be trained to provide health insurance counseling services as CLAIM volunteers. The volunteers will attend a four-day intensive training which will broaden their understanding of the Medicare and Medicaid programs.

To develop and implement a comprehensive program which will inform, educate and counsel older adults, their families, and the community regarding health care fraud and abuse in their own communities, senior centers, and homes.

Medicare Intermediaries and Carriers

Intermediaries are private insurance companies that process claims for Part A of Medicare. Carriers are private insurance companies that process claims for Part B of Medicare. Both are crucial players in the investigative process. Often, the fraud units develop allegations they receive [either from the public or the Office of Inspector General (OIG)] to the point where fraud is apparent, and then refers the results to the OIG for further pursuit. The fraud units are often key players throughout the process, serving as reimbursement experts and sometimes as witnesses at trials or hearings. The fraud units also refer potential cases that they discover through claims processing and financial audits.

Office of Attorney General

The mission of the fraud unit is to investigate and prosecute Medicaid providers (e.g., doctors, pharmacists, hospitals, clinics, medical equipment suppliers, etc.) who defraud the Missouri Medicaid program. Nationally, it is estimated that such fraud accounts for up to ten percent of all health care expenditures. The Attorney General’s office works in cooperation with insurance companies, Medicare intermediaries and carriers, and Medicaid recipients.

Office of the Inspector General

The Office of the Inspector General conducts whatever investigations are necessary in order to confirm or refute allegations of fraud often working with several Federal law enforcement agencies (e.g., FBI, Postal Inspection Service, etc.) to build a case. Case building involves a variety of investigative techniques, including interviews, record reviews, and law enforcement techniques. Where fraud is apparent, a prosecutor is consulted for a prosecutive opinion. If both civil and criminal prosecution is declined, OIG agents notify the Medicare intermediary or carrier so that appropriate administrative action is taken (e.g., recovery of funds).

United States Attorneys Office

The United States Attorneys make prosecutive determinations based on the results of investigations referred to them. Where criminal prosecution is pursued, charges may be brought based on a complaint sworn to by an OIG special agent. Sometimes testimony relating to the investigation is heard by a federal grand jury and charges (in the form of an indictment) are brought. Where appropriate, arrest warrants are issued by a U.S. District Court Magistrate.

In cases where criminal prosecution is declined, civil prosecution may be pursued by the United States Attorney. A civil complaint may be filed under the False Claims Act. Most often civil cases are settled without formal proceedings. Moreover, it is becoming increasingly common for civil settlements to be negotiated along with criminal pleas.

United States District Courts

United States District Courts are responsible for adjudicating civil and criminal matters brought through the United States Attorney’s Offices.

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What is Health Care Fraud and Abuse?

Fraud: "Is an intentional deception or misrepresentation that the individual knows to be false or does not believe to be true, and makes known that the deception could result in some unauthorized benefit to himself/herself or some other person. The most frequent kind of fraud arises from a false statement or misrepresentation made, or caused to be made, that is material to entitlement of payment under the Medicare program. The violator may be a participating provider, a beneficiary, or some other person or business entity."1 Examples of fraud include, but are not limited to:

Billing for services or goods not provided. This includes billings for "no shows;"

Incorrect reporting of the diagnosis or procedures to maximize payments;

Claim forms which have been altered to obtain a higher reimbursement amount;

Deliberate application for duplicate reimbursement, e.g., billing both Medicare and the beneficiary for the same service, or billing both Medicare and another insurer in an attempt to get paid twice;

Unbundled or explored charges, for example, the billing of a multichannel set of lab tests to appear as if the individual tests had been performed;

Claims involving collusion between a provider and a beneficiary, resulting in higher costs or charges to the Medicare program;

Soliciting, offering, or receiving a kickback, bribe, or rebate (for example, paying for a referral of patients);

Provider completing Certificates of Medical Necessity (CMN) for patients not professionally known by the provider;

Misrepresentation of the dates and/or type of services and/or goods provided;

Misrepresentation of the identity and/or the individual who furnished the services;

Using another person’s Medicare card to obtain medical care;

Repeatedly violating the participation agreement, assignment agreement or limiting charge;

Alteration of claims history records to generate fraudulent payments; and

Billings based on "gang visits", i.e., a physician visits a nursing home, walks through the facility, and bills for 20 nursing home visits without rendering any specific service to individual patients.

Violators can include:

A doctor or provider;

A durable medical equipment supplier;

A Medicare beneficiary;

Any individual or business.

Abuse: is defined in the SNF 106.2 (Medicare Skilled Nursing Facility Manual) as: "practices that, either directly or indirectly, result in unnecessary costs to the Medicare program. Many times abuse appears quite similar to fraud, except it is not possible to establish that abusive acts were committed knowingly, willfully and intentionally.

Following are three standards that CMS uses when judging whether abusive acts in billing were committed against the Medicare program:

medically necessary;

conforms to professionally recognized standards; and

provided at a fair price."2 Examples of abuse include, but are not limited to:

Services or supplies which are not medically necessary and/or are excessive;

Overcharging for services and/or supplies;

Billing for noncovered items or services under billable revenue codes;

Claims for services that were medically necessary but not to the extent rendered (i.e., a battery of diagnostic tests when only a few tests were needed);

Breach of the Medicare participation or assignment agreements (billing beneficiaries for amounts disallowed by the carrier);

Improper billing practices such as:

Exceeding the limiting charge

Billing Medicare at a higher fee schedule rate than for non-Medicare patients

Submitting bills to Medicare where Medicare is not the beneficiary’s primary insurer; and

Violators can include:

medical or health care providers

Physicians

Suppliers of medical equipment

Situations That May Not be Fraud Under Medicare Rules

Beneficiary did not receive service:

This may be a billing or processing error where the Medicare number has been miskeyed. The only way to tell this is to contact the provider’s office that processed the claim so the original claim can be checked for an error.

The service was rendered by a provider the beneficiary may not have seen--laboratory, pathologist, anesthesiologist, radiologist, etc.

The beneficiary may have seen an employee of the physician (i.e., nurse practitioner, physician assistant, physical therapist) even though the claim shows the service was provided by the physician.

High or Duplicate Charges--Hospital Inpatient Bill

This is often a billing or charging error by the hospital. Because hospital inpatient claims are paid under the Diagnosis Related Group(DRG) system, the duplicate charge does not usually affect what Medicare allows or pays.

The beneficiary should contact the hospital to have the incorrect charges removed.

Contact the intermediary if the overcharging seems extreme or unusual.

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General Introduction to Medicare

Medicare was...

The first large federal health insurance program enacted by the United States government. It was a part of Lyndon B. Johnson’s Great Society Program.

Enacted into law in 1965, (Title XVIII of the Social Security Act), and became effective July 1, 1966.

Never intended to pay 100% of medical bills.

Medicare is...

The federal health insurance program of people 65 or older and some disabled people under 65.

Administered by the Centers for Medicare and Medicaid Services (formerly the Health Care Financing Administration) (CMS), an agency of the U.S. Department of Health and Human Services. It is ultimately controlled by the U.S. Congress.

The foundation for the retiree’s protection against heavy medical expenses.

Medicare has...

"gaps" in coverage, where the beneficiary must pay a portion of medical expenses.

items and services that are not covered.

Medicare Parts A & B

Medicare is like two separate insurance policies and is divided into two parts:

Medicare A and B Image

There are covered and noncovered services in each of these categories, with various deductibles and copayments involved. Generally, services considered to be routine are not covered under Medicare. Some exceptions include: flu, pneumococcal and hepatitis B vaccinations, pap smears and mammograms; however, there may be time restrictions to coverage.

Part A: Hospital Insurance

Helps pay for inpatient hospital care, limited care in a skilled nursing facility, home health care, hospice care and therapy services.

For most people Part A is an "automatic" part of Social Security or Railroad Retirement, with no premium charge.

Part B: Medical Insurance

Helps pay for physician’s services, outpatient hospital services, durable medical equipment and home health care.

There is a monthly premium for Part B ($43.80 in 1998), which is usually deducted from the Social Security check.

MEDICARE ELIGIBILITY

American citizens are eligible for Medicare if they are:

65 years or older AND eligible for benefits under either Social Security or the railroad retirement system, or is a federal, state or local government employee insured on his/her own record or that of a spouse.

Any age and disabled AND eligible for Social Security or Railroad Retirement Disability benefits for 24 months or more.

Any age AND receiving regular dialysis or having received a kidney transplant due to kidney failure.

Any age AND certain government employees or family members who are disabled more than 29 months.

Anyone 65 or over who is not eligible for Social Security benefits may buy Medicare coverage if that person is:

An American citizen; or

An alien lawfully admitted for permanent residence, who has resided in this country five consecutive years before applying for Medicare.

Eligibility is determined by the Social Security Administration.
Beneficiaries with questions regarding Social Security eligibility and enrollment should call 1-800-772-1213.

MEDICARE TERMINOLOGY

Assignment: A method of provider payment used in Medicare Part B in which the provider or supplier of a covered service agrees that his or her total charge for the service will not exceed the allowable charge approved by the carrier.

Benefit Period: The time period in which a beneficiary is entitled to a certain amount of Part A coverage for the health care (s)he receives. It begins on the first day a beneficiary receives inpatient hospital care and ends after the beneficiary has been out of a hospital or skilled nursing facility for 60 consecutive days.

Carrier: A private health insurance company under contract with the Centers for Medicare and Medicaid Services (formerly the Health Care Financing Administration) (CMS) to handle claims processing for Medicare Part B.

Co-insurance (co-payment): The portion of Medicare approved charges you must continue to pay after Medicare has begun paying.

Custodial Care: Services which give assistance with personal needs such as bathing, walking, dressing, etc., and are provided by persons without professional skills or training.

Deductible: The portion of Medicare approved charges you must pay before Medicare begins to pay.

Explanation of Medicare Benefits: (a.k.a. EOMB, EOB, or MSN/Medicare Summary Notice) The form a Medicare beneficiary receives from the carrier or intermediary explaining the amount of Medicare reimbursement for a claim.

CMS: (a.k.a. Centers for Medicare and Medicaid Services (formerly the Health Care Financing Administration)) A bureau of the U.S. Department of Health and Human Services which handles the administration of the Medicare and Medicaid programs.

Intermediary: A private health insurance company under contract with CMS to handle claims processing for Medicare Part A.

Medicaid: The federally assisted, state-administered program to finance health care services for low-income persons of all ages.

Medicare: The federal health insurance program for persons age 65 and over, certain disabled persons and persons with end-stage renal disease. It consists of two parts: Part A - Hospital Insurance and Part B - Medical Insurance.

Medicare Approved Charge: Medicare establishes a "reasonable" charge for each medical service. All Medicare payments are based on these charges (also called "allowable" charges or expenses).

Medicare Summary Notice: (a.k.a. EOMB, EOB, or MSN) The form a Medicare beneficiary receives from the carrier or intermediary explaining the amount of Medicare reimbursement for a claim.

Nonassignment: A method of provider payment used in Medicare Part B in which the provider or supplier of a covered service does not accept the Medicare allowable charge as payment in full for their service. In this case, the provider or supplier can charge the beneficiary up to 115% over the Medicare allowed charge.

Nonparticipating facility: A health care facility which does not participate in the Medicare program and generally does not accept Medicare payment for services received in the facility.

Peer Review and Quality Improvement Organization: (a.k.a. PRO or QIO) A private, not-for-profit organization dedicated to improving the quality of patient care, to furthering disease prevention and health promotion, to assuring a senior population capable of exercising its rights as patients and making informed decisions about health care, and to providing the highest level peer review services in the state.

Reasonable and Necessary Care: The type of health services generally accepted by the health community as being required for the treatment of a specific disease or illness.

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ACKNOWLEDGEMENTS

The information in this manual was adapted from materials written by Linda Baker, CLAIM Program Training Specialist in cooperation with the Centers for Medicare and Medicaid Services (formerly the Health Care Financing Administration), the Administration on Aging, Missouri’s Medicare Intermediaries and Carriers, the Missouri Attorney General’s Office, the Office of Inspector General and the United States Attorney’s office.

Special thanks to Carrol Griggs, Medicare Fraud Information Specialist, Part A and B-Region VII for her guidance and support in planning these trainings.

This document was supported, in part, by a grant, no. 90-AM-2089, from the Administration on Aging, Department of Health and Human Services. Grantees undertaking projects under government sponsorship are encouraged to express freely their findings and conclusions. Points of view or opinions do not, therefore neccessarily represent official Administration on Aging policy.

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