Deeper Than the Headlines: Congressional Hearing

An OIG Special Agent, ZPIC Contractor, and U.S. Attorney all walk into a bar…
Except they didn’t actually walk into a bar. But, they did recently walk into a Congressional hearing to offer testimony on healthcare fraud and abuse investigative efforts. What they had to say was pretty interesting.

On September 28, 2016, the U.S. House Committee on Ways and Means, Subcommittee on Oversight, held hearings on healthcare fraud investigations. The hearings included testimony from an OIG Special Agent, a ZPIC Contractor and a U.S. Attorney. Each of these witnesses had a different perspective but the message was more or less the same: the government’s efforts for data analytics, investigations and enforcement in the healthcare industry is robust, sophisticated and coordinated among various agencies. Basically, they’ve gone full stealth ninja and if you do something sketchy, you’re going to get caught eventually.

Barbara McQuade, United States Attorney, Eastern District of Michigan testified that in fiscal year 2015, the government’s healthcare fraud and prevention efforts recovered approximately $2.4 billion related to healthcare fraud and false claims and returned those funds to CMS, the U.S. Treasury, other federal agencies, and individuals.

Ms. McQuade further highlighted some specific cases that the Department of Justice prosecuted. Among these was the Olympus settlement, which included a $646 million payment to resolve allegations of kickbacks which involved the marketing and selling of its endoscopy equipment. This was the largest amount paid to the Federal Government for violations involving the Anti-kickback statute by a medical device company. In this case, the government alleged that Olympus paid remuneration to physicians and hospitals, including consulting payments, foreign travel (Paris anyone?), lavish meals (happy meals on me), and millions of dollars in grants and free endoscopes to induce hundreds of millions of dollars in the sales of endoscopes and related equipment.

Of significance, and no surprise to any compliance officer, Ms. McQuade specifically testified that Olympus lacked an effective compliance program to monitor or stop this fraudulent conduct. This is exactly why it’s essential that all organizations in the healthcare space develop and maintain effective compliance programs, not just paper programs or “window dressing” programs. Compliance programs should have data and metrics demonstrating the actions and improvements they’ve made over time in order to claim effectiveness. You know, so your compliance officer can put the kibosh on your crazy Euro vacations and steak dinners.

Abhijit Dixit, Special Agent with the Office of Inspector General, also testified before the subcommittee, specifically from a field agent’s perspective. His testimony highlighted that during the 2013 through 2015 fiscal years, the OIG’s efforts have led to the taking of a whopping 2,856 criminal actions, 1,447 civil actions, and 11,343 program exclusions.

He testified that, “The perpetrators of these frauds can range from highly respected physicians to individuals with no prior experience in the healthcare industry. Regardless, they all have one thing in common – greed. Unscrupulous providers motivated by greed often put profit before patients’ health and safety, creating potentially dangerous patient care environments.”

One example that Mr. Dixit highlighted was that of alleged neurosurgeon Dr. Aria Sabit, a Detroit-area physician who performed unnecessary, invasive spinal surgeries and implanted costly and unnecessary medical devices, all at the expense of his patients’ health and welfare. Dr. Sabit lied to patients about the procedures’ medical necessity and what he actually did. He persuaded patients to undergo spinal fusion surgery that included specific medical devices designed to stabilize and strengthen the spine. But he did not perform that surgery. Instead, Dr. Sabit performed a different operation not related to lumbar and thoracic fusion. He also sometimes billed for implants not provided and falsified operative reports that he knew would later be used to support his fraudulent insurance claims. Dr. Sabit subsequently billed Medicare, Medicaid and private insurance companies $11 million for those fraudulent services. In some cases, patients experienced serious bodily injury and ended up in worse condition than before the surgery. Dr. Sabit has pleaded guilty in two separate criminal cases and awaits sentencing.

The third witness was S. Scott Ward, Sr. VP of Health Integrity, LLC, a ZPIC contractor for ZPIC Zone 4 (Texas, Colorado, Oklahoma, and New Mexico). Mr. Ward spoke of the use of data analytics in their organization’s efforts to prevent and detect fraud. Specifically, he referenced the Fraud Prevention System (FPS), which uses predictive models to identify suspicious providers. Health Integrity receives Alert Summary Reports (ASR) from FPS on a daily basis that identifies providers in Zone 4 for possible fraud, waste, and abuse. They utilize this information to conduct additional data analysis and research to determine if the ASR warrants investigation. Proactive leads are identified through data analysis, local knowledge, subject matter expertise, and policy review.

For an example he referenced the Riverside General Hospital Investigation. A complaint on this provider was received by one of Health Integrity’s departments with an allegation that services were not rendered as claimed. Through proactive analysis, it was determined that the facility was supplying an abnormally high number of partial hospitalization services and acting as a community mental health center. Their investigators interviewed beneficiaries and determined that patients were not receiving services as claimed by Riverside. The facility was placed on suspension and 100% prepay review which in turn resulted in a significant overpayment and savings for the Medicare Trust Fund. The provider was referred to law enforcement which resulted in 5 people indicted and convicted (combined 85 years in prison and over $77 million in restitution). Health Integrity provided expert and fact testimony during the trial. In addition, the provider was revoked from participation in the Medicare program.

These are the type of testimonies the U.S. House Committee on Ways and Means, Subcommittee on Oversight is receiving. They are hearing of the success that various enforcement agencies are having and are supportive of the efforts. The funding of government oversight is only likely to increase when they hear of the return of large amounts of funds to government programs for relatively little investment in enforcement dollars. The culture of enforcement in health care is alive and well. Make sure your organization has an effective compliance program to prevent, detect and correct any missteps before they turn into bigger issues.