The federal government made another loud statement against any toleration of healthcare fraud last week, when HHS announced it charged 412 individuals over a total of $1.3 billion in false billings. The takedown operation was the largest enforcement action from the agency yet.

Hospitals and providers shouldn't wait to take common sense measures to preemptively root out fraud. This includes looking for billing outliers and implementing compliance systems with dedicated staff. Investigators are particularly focused on providers who prescribe large number of opioids, as law enforcement tries to push back against the rapidly increasing number of overdose deaths.

The sting was the latest in the federal government's series of healthcare billing fraud and abuse efforts. Last summer, the Department of Justice swept across 36 federal districts to charge more than 300 medical professionals for the alleged fraudulent billing of about $900 million. Since its creation in 2007, the Medicare Fraud Strike Force has charged more than 3,500 individuals with allegations of defrauding Medicare of over $12.5 billion.

There is undoubtedly opportunity for fraud in the healthcare industry, and the large chunks of money being exchanged can make it lucrative. But it’s also risky. Penalties for individuals can include fines of up to $25,000, potentially lengthy jail sentences and the suspension of a medical license. Organizations can be fined up to $500,000 and become ineligible for future Medicare building. They will also likely be on the hook for restitution and tax penalties.

How improper payments have measured so far

While cracking down on $12.5 billion in losses since 2007 is an accomplishment, consideration should be given to the scope of improper healthcare billings.

Federal improper payment estimates for 2016 totaled $144.3 billion, an increase from $136.7 billion in 2015. The Government Accountability Office (GAO) attributed most of the increase to the Medicaid program. Though 2016's 4.67% federal improper payment rate is higher than 3.53% in 2013, the all-time high was in 2009 at 5.42%.

For HHS' share, Medicare Fee-For-Service still accounts for the largest percentage of improper payments government-wide with $41 billion, or 28%. It's noteworthy this figure is down from 2015 estimates of $43 billion. Medicaid improper payment estimates increased from $29.1 billion to $36 billion in 2016, or 25% government-wide.

It's important to remember not all improper payments are fraud. According to the GAO, about $44 billion of total federal improper payments are caused by insufficient documentation while $34 billion were caused by the inability to authenticate eligibility, where no resource exists to stop a payment based on eligibility constraints.

While $1.3 billion may pale in comparison to the scope of improper payments overall, the massive amount of coordination and orchestration of last week's string is impressive. And it sends a message.

"Healthcare fraud is a huge problem for government programs," Kenneth Yeadon, partner at Hinshaw & Culbertson in Chicago, told Healthcare Dive, adding part of the sting's mission is fraud deterrence by showcasing that false billings are not going to be tolerated by the federal government.

He points to the growing number of federal districts involved in healthcare fraud takedowns year-over-year as evidence the federal government is increasingly putting resources to tracking down fraudsters.

Yeadon says while legitimate providers will continue to face more and more scrutiny over billing claims to reduce waste and fraud, the recent takedown is meant to show those who step over the line that the risk of knowingly participating in false billing practices is not worth the short-term benefits. 

Why a large focus of this raid was opioid prescription misusers

An increasing focus for healthcare fraud is what HHS calls “extreme use and questionable prescribing” of opioids. An HHS OIG study last year found about 400 prescribers with questionable opioid prescribing patterns for Medicare beneficiaries at serious risk of drug misuse. It also found about 22,000 beneficiaries appear to be doctor shopping, and more than 260 prescribers ordered opioids for several people in the category.

“Although high amounts of opioids may be necessary for some patients, questionable prescribing patterns may indicate that the prescriber is ordering medically unnecessary drugs. These drugs may be diverted for resale or recreational use,” according to the report.

Investigators are watching for providers who are among the top prescribers of opioids in number of patients and amount prescribed, as well as those who prescribe to people at serious risk of misuse and those who have prescribed to patients who died from opioid misuse-related factors. For the past two years, CMS has had the authority to exclude providers who meet these criteria, after investigation.

Tips to watch for and mitigate fraud

If you believe you have a fraud situatiol, you're going to be able to find it very quickly, Yeadon says. Looking through billing reports, providers can track which codes are most frequently used. Providers should consider using analytics to find irregularities among billing practices, Bill Bithoney, senior fellow at BDO Center for Healthcare Excellence and Innovation, told Healthcare Dive.

Organizations should look for billing outliers three standard deviations above the mean, Bithoney says. That's the area, if false billing is present, that providers can find "out of the box" or "surprising" or improbable coding combinations. Bithoney notes one of the more outrageous examples would be billing or coding for a man that's pregnant.

"Look at cells and numbers that make no sense," Bithoney says. Yeadon gives an example of a large billing set of patient admissions in an area with a declining population rate. Bithoney adds Medicare Advantage is a huge target for fraud and abuse and ripe with potential problems.

Yeadon notes that if providers don't have a compliance system, they'll want to implement one.

In addition to implementing compliance programs and/or dedicated compliance officers, Bithoney suggests the following for providers looking to put more resources to ensuring proper billing practices:

• Educate clinical and administrative staff on appropriate billing levels. This can be done through on-site or offsite workshops.
• Hire credentialed clinicians. Conduct background checks to help protect your organization.
• Develop and apply billing compliance policies and procedures. Guidelines allow healthcare facilities to set expectations.
• Enforce billing and coding standards. Adherence to the standards sends a message that the organization is serious about such practices.