@IIAChicago #IIACHI Healthcare Reform & The Ethically ... Seminar Presentations/B2... · Playpen South FL Strip Club Nick Just/Paul Perito Double J Unlicensed FL Wholesaler Costal

IIA Chicago Chapter 53rd Annual Seminar April 15, 2013, Donald E. Stephens Convention Center

@IIAChicago #IIACHI

Healthcare Reform & The Ethically Challenged

Managing Transformation

Rebecca S. Busch, RN, MBA, CCM, CFE, CPC, CHS-III, CRMA, CICA, FIALCP, FHFMA CEO, Medical Business Associates, Inc. www.mbaaudit.com

Overview

• ACA & Healthcare Fraud • Organized Crime & Business Diversification • General Auditor Overview • General Auditor Checklist • Sample Schemes

2 Medical Business Associates, Inc. © 2013

ACA

• More money to prevent and fight fraud • Better screening and compliance • New penalties • Better data sharing • Section 6401 has specific compliance

provisions


ACA – Focus Areas

• DME • Home Health • Hospice • Medicare Advantage • Nursing Home


Organized Crime

• Criminal activity carried out by an organized enterprise


Evolving Fraud Schemes…

Group Health Fraud Financial Crimes

Property & Casualty, Other Insurance

The Anatomy of the Ethically Challenged – Business Diversification Perspective

Any Party Insured Parties

Identities, Bank Accounts, Assets

Bodies, Coverage Plan, Victims, Perpetrators

False Claims, Medical Identity Theft, Pharmacy Mischief…

Identity Theft , Embezzlement, Behaviors…

Accident Rings/Fraud Rings…

Medicare, Medicaid, Private Insurance

Recipe

Bodies, Plan Identification, Victims, Perpetrators

Schemes

Recipe Recipe

Schemes Schemes

Medical Business Associates, Inc. © 2013

Illicit Patients

Illicit Providers visits

bills

Group Health Insurance (multiple programs)

Sells

“Fills”

prescribes

recruits

bills

takes

Rx

Rx

Rx

Rx

fills

Illicit Pharmacies


Illicit Providers

Auto Coverage Insurance

recruit

Provide treatments

Pharmacy Criminals- New Auto Schemes

Broker provides insurance

Fake an Accident

bill

Visits, DME, Diagnostics

Illicit Patients

I don’t have auto insurance!


HCC Overview

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 Care

Office based careHome based care

Provider’s:Hospitals

Professional StaffOutpatient Care

Office based careHome based care

Segmented, Fragmented, Insulated, Lacks Service & Price Transparency

Government Plan Sponsor:

Medicare; Medicaid

Private Insurance Plans

E-Health Data Driven Decisions


Audit Check List • Health Care Continuums

– Primary Healthcare Continuum – Secondary Healthcare Continuum – Information Continuum – Consequence Continuum – Transparency Continuum – Rules Based Continuum

• Information Pipelines

– HIP = identification of health information – ARP = identification of the monetary aspects of the health information – OFA = identification of the procedural aspects of the health information and

the monetary transactions – PMA = identification of products involved in the delivery of healthcare services – SMA = identification of the services involved in the delivery of healthcare

services – CMA = identification of the consumer selection or choice activity in the

delivery of healthcare services

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You Pick

• Left or Right?


You Pick

• Left or Right?


You Pick

• Left or Right?


You Pick

• Left or Right?


You Pick

• Left or Right?


Quality Control?

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


You Pick

• Left or Right?

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

Patient Pharmacy

National Wholesaler

Regional Wholesaler

Gray Market

National Wholesaler

Manufacturer


• Rent-a-Patient Scheme – In this scheme organizations pay for—or “rent”—

individuals to go to clinics for unnecessary diagnostic tests and cursory examinations. The scary thing is that licensed physicians sometimes participate in the rent-a-patient scheme.

– Case and point: Robert Bourseau, 75, was sentenced to 37 months in prison and ordered to pay $4.1 million in restitution for his role in a scheme to defraud Medicare and Medi-Cal. He pleaded guilty in June to paying a recruiter to deliver homeless patients to his hospital for unnecessary medical services.

Types of Schemes


• Pill Mill Scheme – In this scheme, separate health care individuals and

entities (usually including a pharmacy) collude to generate a flood of fraudulent claims that Medicaid pays. After a prescription is filled, the beneficiary sells the medication to pill buyers on the street who then sell the drugs back to the pharmacy.

– Example: Rick Kloxin, pharmacist in charge of Hogan’s Pharmacy in Lyons, Kans., was found guilty in an internet pill mill scheme. Kloxin pled no contest and was found guilty of 14 misdemeanor counts of violating Kansas Pharmacy laws.

Types of Schemes


• Drop Box Scheme – This scheme uses a private mailbox facility as the

fraudulent health care entity’s address, with the entity’s “suite” number actually being its mailbox number. The fraudulent health care entity then uses the address to submit fraudulent Medicare, Medicaid, and other insurance claims and to receive insurance checks.

Types of Schemes


• Third-Party Billing Scheme – The third-party billing scheme revolves around a third-

party biller—who may or may not be part of the scheme—who prepares and remits claims to Medicare or Medicaid (electronically or by paper) for health care providers. It is possible, however, for a third-party biller to defraud Medicare, Medicaid, and others by adding claims without the providers’ knowledge and keeping the remittances or by allowing fraudulent claims to be billed to Medicare or Medicaid through its service.

– Example: Recently, in Miami, Ihosvany Marquez and several alleged conspirators were indicted on charges of having filed $55 million in phony Medicare claims for HIV, AIDS, cancer, pain and varicose vein treatments.

Types of Schemes


Detection: Data Mining • Claims Data

– Address profiling of patient – Address profiling of provider – Cross reference of Facility Professional, DME, and

Rx data bases – Beneficiary profiling

• Claims Data Sample membership_id PAT_ID last_name first_name subscriber_id long_subscriber_id address_1 address_2

15232 01 Doe John 123456789 123456789-001 540 PARKWAY 305215233 01 Doe John 123456789 123456789-001 540 PARKWAY 305215234 02 Bella Jane 123456789 123456789-001 800 PARKWAY 305215235 03 Bella Jane 123456789 123456789-001 800 PARKWAY 305215236 04 Austin Steve 123456789 123456789-001 600 PARKWAY 3052


Detection: Data Mining

• Claims Data Sample – Jane Bella Drug Purchases: 4 Different Pharmacies –

70% with One Pharmacy – 12 month activity • 90 OXYCONTIN • 120 DIAZEPAM • 60 CYCLOBENZAPR • 30 METHADONE • 90 OXYCODONE • 90 OXYCONTIN • 120 DIAZEPAM • 60 CYCLOBENZAPR

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70% with One Pharmacy – 12 month activity continued

• 30 METHADONE • 120 OXYCODONE • 120 OXYCODONE • 30 METHADONE • 60 CYCLOBENZAPR • 120 DIAZEPAM • 90 OXYCONTIN • 90 OXYCONTIN

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70% with One Pharmacy – 12 month activity continued

• 120 DIAZEPAM • 60 CYCLOBENZAPR • 30 METHADONE • 90 OXYCODONE • 14 METRONIDAZOL • 20 HYDROCO/APAP • 12 METHERGINE • 21 METHYLPRED5AZITHROMYCIN • 120 DIAZEPAM


Operational Flow Activity (OFA)Operational Flow Activity (OFA)

(ILLICIT Market Activity)(ILLICIT Market Activity) Pharmaceuticals Table 4.aI

Pharmaceuticals Table 4.aI

Drug Research

FDA Approvals

Drug Manufacture- foreign vs domestic

Drug (re) Distribution primary wholesale

Drug (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

Drug (re) Distribution secondary wholesale

(re) Packaging

(re) Packaging

340B Abuse; Benefit Plan Manipulations; false claims; vendor, employee, corporate

fraud; organized crime; kickbacks

Manipulations of product & pricing; illicit distributions;

introduction of altered products,

counterfeit

Medically unnecessary distribution

False Research;

noncompliance

Marketing & Sales Miss representations throughout

Waste, fraud, abuse

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Follow the Money: What is the offense?

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 Fraud Theory Investigation & Report

What type of Providers?

Hospital

OPS

MD Office

Nursing Home

Other

What type of Payer?

TPATPA/Premium

Other Parties?

Who What Why Where When

Anomaly Data Analysis ProfilerFRAUD PROFILER 27 Medical Business Associates, Inc. © 2013

Sample Documents

• Dates • Content • Intent


• Issues: – Dictated one month after

procedure. – “specimens taken” – Narrative reference to

procedure the next day, “Will Check colonoscopy in the morning” but dictated 3/8/06 – no addendum noted.


• Issues: – Format indicates a

different transcription system and source.

– Dictated, transcribed the same date of procedure


The Story

• Doctor has a habit of submitting unbundled procedure codes

• Included: Procedures that were never performed

• Doctor is pursued in a medical malpractice case

• The irony – if he would have performed the services billed, the patient would have had a different outcome

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Electronic Issues

• Electronic system did not document or track addendums

• The billing codes were not documented in the medical record

• The doctor documents “specimens taken” but no pathology bills exist nor charges for the processing or collection of the specimen


Sample: Sequencing & Content Issues

Issues:

• Dictated 5/23/05 T 5/23/05

• Electronic MD Signature 5/27/05

• Dictated clinical content conflicts with hand written narratives

• Continuation sequence 112421

• Dictator #15432

• Original sequence unclear (3 pages)

• Outsourced Transcription company

• Identifies transcriber



Issues:

• Dictated on 5/17/2005 T 5/23/08

• No MD Electronic Signature Date

• Continuation sequence 113518 (3 pages)

• Not clear what content was changed

• Does not identify transcriber nor dictator



Issues:

• Dictated on 5/17/2005 T 5/20/05

• MD Electronic Signature 8/8/05


• Dictator #15482

• Not clear what content was changed

• Transcriber Identified as outside company



Issues:

• Dictated on 5/17/2005 T 5/23/05

• MD Signature Date 8/8/05


• Dictator #15482

• Transcriber Identified as outside company

• Corrected date 8/1/05


Sample: Copy & Paste


Sample: Copy & Paste 10/8/2003


Sample: Copy & Paste

Issues: Too easy to replicate data and findings Have found wrong data associated with incorrect patient Increase tendency towards medical errors


Questions?

Rebecca S. Busch RN, MBA, CCM, CFE, CPC, CHS-III, CRMA, CICA, FIALCP, FHFMA

580 Oakmont Lane • Westmont, IL • 60559 (PH) 630.789.9000 • (FAX) 630.908.3349 • www.mbaaudit.com

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