Medicaid Fraud in Managed Care - 8 High Risk Claims Groups
medicaid fraud risk groups fall into two categories:
Claims Related to Medical Services and Claims for prescription drugs
Washington’s Medicaid managed care program, jointly funded by the federal and state government, provided health coverage for about 796,000 residents and cost almost $1.4 billion in 2013. The Health Care Authority (HCA) expects federal health care reforms starting in January 2014 will expand Medicaid coverage to about 328,000 more people in Washington in the next five years, most of whom are expected to receive managed care.
Managed care organizations receive from the state monthly per-person payments. They use that money to pay doctors and other providers for client care. The system limits the state’s exposure to increasing medical costs. However, the per-person rate the state pays is based in part on how much spending managed care organizations report. Because overpayments by the organizations inflate those figures, they put the state at risk of paying unnecessarily high premium rates in the future.
The following 8 claims groups are considered "high-risk" for false claims in managed care. If you have concerns about a Washington managed care provider engaging in these illegal practices, contact Seattle Whistleblower Attorneys today.
1. ‘Upcoding’ diagnosis-related group (DRG) codes. Medical billing systems offer several diagnosis-related group (DRG) codes, which ascend numerically as the amount of effort required of the provider increases. High numbered DRG codes pay at a higher rate. They are applied for the greater levels of service performed for inpatient procedures in hospitals.
Potential overpayment issues: A provider who frequently applies higher numbered DRG codes could be a specialist, but it is also possible the provider is misusing the codes to get a greater reimbursement rate. It may also indicate incorrect usage of these codes.
2. Unbundling CT (computerized tomography) scans. Certain related services are bundled into a single payment to the provider. If a claim is submitted for a service that must be bundled with an additional code for one of the procedures included in the bundle, the payment for the additional code should be denied. Some of the CT scan procedure codes are bundled with other related services, generally where a CT scan would be a normal procedure in order to diagnose the illness or injury.
Potential overpayment issues: The potential for overcharging may occur when providers bill additional, separate CT scan codes with the bundled procedures without the proper documentation to support the additional payment. Additionally, services may be charged separately instead of bundled resulting in higher overall charges.
3. One-day inpatient stay. For the same service, inpatient (admitted) hospital reimbursement rates are typically higher than outpatient (not admitted) rates.
Potential overpayment issues: The potential for overcharging may occur when a provider admits the patient into a hospital when it was not medically necessary and treatment could have been provided on an outpatient basis, or when outpatient procedures are incorrectly billed as inpatient procedures.
4. Excessive billing using Modifier 25 code. Providers apply a Modifier 25 code to indicate that on the day of a procedure, the patient’s condition required a significant, separately identifiable evaluation and management service, above and beyond the usual pre- and post-operative care associated with the procedure or service performed. Under normal circumstances, one expects to see the use of the Modifier 25 code only in
exceptional circumstances.
Potential overpayment issues: The potential for overcharging may occur when providers bill additional, separate E&M codes with these procedures without the proper documentation to support the additional payment. The use of codes with an embedded E&M code may indicate that the separately billed E&M did not occur or was not necessary.
5. Duplicate payment of evaluation & management (E&M) codes. These codes are often included within other procedure codes. Many surgical procedure codes build in a component that includes an evaluation & management activity that is performed within one, ten or 90 days of the procedure date.
Potential overpayment issues: The potential for overcharging may occur when providers bill additional, separate E&M codes with these procedures without the proper documentation to support the additional payment. The use of codes with an embedded E&M code may indicate that the separately billed E&M did not occur or was not necessary.
6. Duplicate payment of evaluation & management (E&M) codes. These codes are often included within other procedure codes. Many surgical procedure codes build in a component that includes an evaluation & management activity that is performed within one, ten or 90 days of the procedure date.
Potential overpayment issues: The potential for overcharging may occur when providers bill additional, separate E&M codes with these procedures without the proper documentation to support the additional payment. The use of codes with an embedded E&M code may indicate that the separately billed E&M did not occur or was not necessary.
7. Recurring orders for controlled substance drugs. Controlled substance medications (identified in schedules II, III, and IV) have an increased potential for abuse; they include drugs such as methadone, OxyContin, anabolic steroids, codeine, Valium, and Xanax. They are typically prescribed for short-term use only.
Potential overpayment issues: Recurring orders for multiple months may indicate patients with addiction problems seeking excessive quantities of drugs or illegal selling schemes run by the patient or the provider writing the prescriptions, as many of these drugs have a high street value.
8. Recurring orders for atypical antipsychotic drugs. Similar to controlled substances, certain atypical antipsychotics drugs have an increased potential for abuse. Drugs in this class include Abilify, Seroquel and Zyprexa.
Potential overpayment issues: Recurring orders for multiple months may indicate patients with addiction problems seeking excessive quantities of drugs or illegal selling schemes run by the patient or the provider writing the prescriptions, as many of these drugs have a high street value.
Source: Washington State Auditor's Office - Performance Audit - Health Care Authority Oversight Of the Medicaid Managed Care Program
Managed care organizations receive from the state monthly per-person payments. They use that money to pay doctors and other providers for client care. The system limits the state’s exposure to increasing medical costs. However, the per-person rate the state pays is based in part on how much spending managed care organizations report. Because overpayments by the organizations inflate those figures, they put the state at risk of paying unnecessarily high premium rates in the future.
The following 8 claims groups are considered "high-risk" for false claims in managed care. If you have concerns about a Washington managed care provider engaging in these illegal practices, contact Seattle Whistleblower Attorneys today.
1. ‘Upcoding’ diagnosis-related group (DRG) codes. Medical billing systems offer several diagnosis-related group (DRG) codes, which ascend numerically as the amount of effort required of the provider increases. High numbered DRG codes pay at a higher rate. They are applied for the greater levels of service performed for inpatient procedures in hospitals.
Potential overpayment issues: A provider who frequently applies higher numbered DRG codes could be a specialist, but it is also possible the provider is misusing the codes to get a greater reimbursement rate. It may also indicate incorrect usage of these codes.
2. Unbundling CT (computerized tomography) scans. Certain related services are bundled into a single payment to the provider. If a claim is submitted for a service that must be bundled with an additional code for one of the procedures included in the bundle, the payment for the additional code should be denied. Some of the CT scan procedure codes are bundled with other related services, generally where a CT scan would be a normal procedure in order to diagnose the illness or injury.
Potential overpayment issues: The potential for overcharging may occur when providers bill additional, separate CT scan codes with the bundled procedures without the proper documentation to support the additional payment. Additionally, services may be charged separately instead of bundled resulting in higher overall charges.
3. One-day inpatient stay. For the same service, inpatient (admitted) hospital reimbursement rates are typically higher than outpatient (not admitted) rates.
Potential overpayment issues: The potential for overcharging may occur when a provider admits the patient into a hospital when it was not medically necessary and treatment could have been provided on an outpatient basis, or when outpatient procedures are incorrectly billed as inpatient procedures.
4. Excessive billing using Modifier 25 code. Providers apply a Modifier 25 code to indicate that on the day of a procedure, the patient’s condition required a significant, separately identifiable evaluation and management service, above and beyond the usual pre- and post-operative care associated with the procedure or service performed. Under normal circumstances, one expects to see the use of the Modifier 25 code only in
exceptional circumstances.
Potential overpayment issues: The potential for overcharging may occur when providers bill additional, separate E&M codes with these procedures without the proper documentation to support the additional payment. The use of codes with an embedded E&M code may indicate that the separately billed E&M did not occur or was not necessary.
5. Duplicate payment of evaluation & management (E&M) codes. These codes are often included within other procedure codes. Many surgical procedure codes build in a component that includes an evaluation & management activity that is performed within one, ten or 90 days of the procedure date.
Potential overpayment issues: The potential for overcharging may occur when providers bill additional, separate E&M codes with these procedures without the proper documentation to support the additional payment. The use of codes with an embedded E&M code may indicate that the separately billed E&M did not occur or was not necessary.
6. Duplicate payment of evaluation & management (E&M) codes. These codes are often included within other procedure codes. Many surgical procedure codes build in a component that includes an evaluation & management activity that is performed within one, ten or 90 days of the procedure date.
Potential overpayment issues: The potential for overcharging may occur when providers bill additional, separate E&M codes with these procedures without the proper documentation to support the additional payment. The use of codes with an embedded E&M code may indicate that the separately billed E&M did not occur or was not necessary.
7. Recurring orders for controlled substance drugs. Controlled substance medications (identified in schedules II, III, and IV) have an increased potential for abuse; they include drugs such as methadone, OxyContin, anabolic steroids, codeine, Valium, and Xanax. They are typically prescribed for short-term use only.
Potential overpayment issues: Recurring orders for multiple months may indicate patients with addiction problems seeking excessive quantities of drugs or illegal selling schemes run by the patient or the provider writing the prescriptions, as many of these drugs have a high street value.
8. Recurring orders for atypical antipsychotic drugs. Similar to controlled substances, certain atypical antipsychotics drugs have an increased potential for abuse. Drugs in this class include Abilify, Seroquel and Zyprexa.
Potential overpayment issues: Recurring orders for multiple months may indicate patients with addiction problems seeking excessive quantities of drugs or illegal selling schemes run by the patient or the provider writing the prescriptions, as many of these drugs have a high street value.
Source: Washington State Auditor's Office - Performance Audit - Health Care Authority Oversight Of the Medicaid Managed Care Program