State and Federal enforcement agencies anticipating more complex investigations as COVID-era practices emerge

Featured speakers: Toby R. Unger, Chief of Medicaid Fraud Division, Office of the Massachusetts Attorney General; and Patrick Callahan, Healthcare Fraud Unit, US Attorney’s Office. Moderated by David Schumacher, Partner, Hooper, Lundy & Bookman 

Unger and Callahan addressed the Massachusetts Health and Hospital Association’s Healthcare Legal Compliance Forum in December 2021. (Read a summary.) This recap of their remarks looks at the types of cases they are investigating, the ways health organizations can effectively partner with law enforcement, and their take on effective Compliance functions. To access the full session recording, please contact the Massachusetts Health and Hospital Association.  

Current mix of investigations

Unger reported that her unit is focused on about 65% Medicare fraud and about 35% abuse and neglect. “When people defraud the system they don’t just defraud Medicaid, they also get Medicare and private insurance. Once I’m in there I can prosecute all of it,” she said. Her office has seen an increase in elder abuse reports since the beginning of the pandemic. “Reports of fraud decreased, and all that we were hearing about was potential abuse and neglect happening in nursing homes and home care,” she said. She noted that the balance is moving toward 50-50 as evidence of fraudulent activity during the pandemic surfaces.  

Callahan said his office has stayed focused on fraud and continued to see False Claims Act violations such as upcoding, billing and wire fraud, and Medicaid fraud by providers. “We are always looking at arrangements between doctors, providers and industry, like consulting arrangements,” he said. “We want to be sure the decisions providers are making are what’s best for the patients. That also includes kickback investigations.”  

Both Unger and Callahan reported that whistleblowers are a significant source of complaints. They also get public complaints and referrals from state, local and federal agencies. Many of these come from people looking at usage data and spotting irregularities. “Data analysis is really important to our work- individuals see irregularities, high prescribers out of whack with what the rest of the folks in their peer group are doing,” Callahan said.  

They both appreciate when a healthcare organization brings this data to them, along with a plan for addressing irregular behavior. “We really appreciate hearing from you,” Callahan said. “We get a call about something someone saw in the operating room or purchasing department. Sometimes there’s nothing there, but sometimes it’s something we need to look at. We all want to do our best to combat fraud and doing our best to make sure patients are protected.” 

Working with law enforcement agencies

Unger and Callahan both know healthcare professionals may have some discomfort about working with law enforcement, especially if they’ve never done it before. They generally see the best outcomes when Compliance and Legal teams bring issues to them or work quickly with them to find data and resolve issues.   

“The gold standard is a voluntary disclosure,” Unger said, “However, I understand the politics against that. But if you voluntarily disclose you are going to get the best deal you can get, as long as it’s timely and thorough. The next best would be that we bring something to you, and you then run with it. You start an internal investigation and figure out what’s going. Timely report back to us, we figured out what’s going on, we’ve fixed it and here’s how. If you do that while we’re in process of investigating, we will give you maximum cooperation credit.”

The third best scenario, in Unger’s experience, is when hospitals at least cooperate on requests for documents and interviews to help them get to the bottom of an issue quickly. “That also gets cooperation credit.” 

COVID related investigations

Unger and Callahan expect to have their hands full as they get a clear view of fraudulent activity during the pandemic. “We’re just touching the surface on this,” Callahan said. The early cases were simple and included fraudulent billing for appointments that couldn’t have happened – nonessential appointments like dentist, physical therapists and optometrists that were billed in the first three months – “there was no way they were happening,”  

Now they’re looking at harder cases, like telehealth standards. “We get allegations of providers going down their patient lists, leaving voice messages and billing for a 30 minute appointment,” Unger said. Current investigations also include overtesting – requiring a flu test along with every COVID test – Provider Relief Fund abuse, and PPE hoarding or price gouging.  

Provider workload and compliance

Callahan and Unger both see cases where providers are unwittingly involved in fraud schemes – when they rubber stamp renewals on home health care services or prescriptions.  

Take home healthcare services: “Physicians have to authorize these every 60 days. Home health services may send extension requests to the provider even when the patient no longer needs or receives services. We need the providers to follow up with the patient before authorizing an extension.”  

The same can go for urine drug tests and prescription refills. 

Callahan is seeing cases where independent pharmacies identify a relatively harmless drug that reimburses at a high rate. They submit refill requests on behalf of the patient – without the patient knowing. Providers sign off without investigating because the drug isn’t high risk – it might be a multivitamin, indigestion treatment, or compounded pain cream – drugs that don’t raise a lot of concern. “Millions in dollars in fraud are happening this way,” Callahan said.  

The speakers all acknowledged that providers are burned out and don’t have time to follow up on every request. Still, they were clear that someone in the healthcare organization needs to know what the provider is signing. These tasks can’t be outsourced to members of industry. “People do have to be diligent about making sure they’re looking at what they’re signing,” Callahan said. Third-parties will expect that they know what they signed, and providers can suffer a lot of embarrassment if they have to acknowledge they didn’t know the circumstances when they signed.  

Unger offered this support: “If doctor says no and gets harassed by lab or home health agency, please report the behavior.” 

Signs of a great Compliance department

“A good compliance department doesn’t need to be huge with a lot of people and formal processes,” Callahan says. “A good department is one that has a real effect when they ask leadership to make a change. They have a voice that gets leadership’s attention, and they can have questionable practices stopped during an investigation. When they ask to press pause, they are listened to.”  

“We don’t like it when Compliance raises a concern about a doctor, and nothing is done about it. That’s almost worse than having no compliance department at all.”  

Unger agreed. “Culture is key,” she said. “Your folks have to feel like their compliance professional gets it, and that if they bring something to you, that something will happen.” 

YouCompli sponsored MHA’s 2021 Healthcare Legal Compliance Forum. We provide a complete solution to help healthcare compliance organizations manage regulatory change. Find out more about YouCompli.  

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