Providers fear fraud allegations

Providers are facing a wider magnify glass these days, as government officials employ a controversial payment recovery strategy--the "credible allegation of fraud" provision, which essentially puts a freeze on payments for allegations that may or may not be true. The results of such payment freezes could financially ruin providers.

"It's like having an atom bomb dropped on my business. I could lose everything," one anonymous physician involved in a Medicaid fraud investigation told The Texas Tribune. "I've had to cut wages. People are worried about their jobs. We're pariahs at this point. It's been real hell." 

In recent years, authorities have taken a hard-line stance on fraud, waste and abuse, which drains precious healthcare dollars. Under the Patient Protection and Affordable Care Act, the Centers for Medicare & Medicaid Services can suspend payments when there are "credible allegations of fraud." The language is intentionally vague to allow states the flexibility to interpret it differently, the U.S. Department of Health & Human Services explained in March 2011 soon after the final rule came out.

Who can make an allegation? Pretty much anyone. Sources include fraud hotline complaints, claims data-mining, provider audit patterns, civil false claims cases and law enforcement investigations. For example, if a physician alleges another physician has been fraudulently billing at higher-level services than actually rendered, that might be considered a credible source of information.

Even if the provider argues the total payment suspended is unfair and disproportionate to the scope of the alleged fraud, the state has the authority to impose a partial payment if it believes there's good cause, CMS noted.

"The message to those providers out there who see the Medicaid program as an ATM, who use it to make monthly withdrawals to buy jets and $8 million houses, is that there's a different inspector general's office now," Texas Deputy Inspector General Jack Stick said in the Texas Tribune article.

The Office of Inspector General used to approach these types of cases like law enforcement, conducting lengthy investigations for criminal prosecution. But now, the agency is acting faster to stop criminals in their tracks, that is, before payment is doled out, said Douglas Wilson, who took over as Texas Health & Human Services Commission inspector general last year.

The American Hospital Association has noted that there is a difference been honest billing mistakes and fraud. AHA said because of the sheer volume of claims hospitals submit, errors are bound to happen and should not be treated as fraud cases.

"To any provider who says, 'We're being targeted blindly,' our message is, 'we aren't targeting anybody.' The data tells us who to look at," Stick said. "There are intentional acts and there are inadvertent acts, unknowing acts. We recognize the difference."

OIG allows providers informal review to make their case at any time. Providers also can settle to resolve the case sooner.

For more information:
- read the Texas Tribune article
- see the CMS final rule information on credible allegations of fraud (.pdf)

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