[Federal Register Volume 61, Number 117 (Monday, June 17, 1996)]
[Notices]
[Pages 30623-30625]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15269]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Inspector General
Publication of OIG Special Fraud Alert: Fraud and Abuse in the
Provision of Services in Nursing Facilities
AGENCY: Office of Inspector General (OIG), HHS.
ACTION: Notice.
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SUMMARY: This Federal Register notice sets forth a recently issued OIG
Special Fraud Alert concerning fraud and abuse practices in the
provision of medical and other health services to residents of nursing
facilities. For the most part, OIG Special Fraud Alerts address
national trends in health care fraud, including potential violations of
the Medicare anti-kickback statute. This Special Fraud Alert, issued
directly to the health care provider community and now being reprinted
in this issue of the Federal Register, specifically identifies and
highlights some of the illegal practices that the OIG has uncovered in
the provision of nursing facility services.
FOR FURTHER INFORMATION CONTACT: Joel J. Schaer, Office of Management
and Policy, (202) 619-0089.
SUPPLEMENTARY INFORMATION:
I. Background
The Office of Inspector General (OIG) issues Special Fraud Alerts
based on information it obtains concerning particular fraudulent and
abusive practices within the health care industry. These Special Fraud
Alerts provide the OIG with a means of notifying the industry that we
have become aware of certain abusive practices which we plan to pursue
and prosecute, or bring civil and administrative action, as
appropriate. The Alerts also serve as a powerful tool to encourage
industry compliance by giving providers an opportunity to examine their
own practices.
The Special Fraud Alerts are intended for extensive distribution
directly to the health care provider community, as well as those
charged with administering the Medicare and Medicaid programs. On
December 19, 1994, the OIG published in the Federal Register the texts
of 5 previously-issued Special Fraud Alerts (59 FR 65372), and
indicated our intention of publishing all future Special Fraud Alerts
in this same manner as a regular part of our dissemination of this
information. Two additional OIG Special Fraud Alerts addressing home
health fraud and fraud and abuse provisions of medical supplies in
nursing facilities was published in the Federal Register on August 10,
1995 (60 FR 40847).
With regard to the provision of health care services reimbursed by
Medicare and Medicaid to nursing facilities, this newly-issued Special
Fraud Alert highlights such fraudulent practices as (1) making claims
for services not rendered or not provided as claimed, and (2) the
submission of claims falsified to circumvent coverage limitations on
medical specialties. A reprint of this Special Fraud Alert follows.
II. Special Fraud Alert: Fraud and Abuse in the Provision of Services
in Nursing Facilities (May 1996)
The Office of Inspector General (OIG) was established at the
Department of Health and Human Services by Congress in 1976 to identify
and eliminate fraud, waste and abuse in Health and Human Services
programs and to promote efficiency and economy in departmental
operations. The OIG carries out this mission through a nationwide
program of audits, investigations and inspections.
[[Page 30624]]
To help reduce fraud and abuse in the Medicare and Medicaid
programs, the OIG actively investigates schemes to fraudulently obtain
money from these programs and, when appropriate, issues Special Fraud
Alerts which identify segments of the health care industry that are
particularly vulnerable to abuse. This Special Fraud Alert focuses on
the provision of medical and other health care services to residents of
nursing facilities and identifies some of the illegal practices that
the OIG has uncovered.
How Nursing Facility Benefits Are Reimbursed
There were 17,000 nursing facilities in the United States, as of
June 1995. An OIG study reported that in 1992, Medicare payments to
nursing facilities included Part B payments of $2.7 billion and Part A
payments of $3.1 billion for covered stays in nursing facilities. When
the Federal share of the $24 billion spent by Medicaid is factored in,
the Federal cost of nursing care reached a total of approximately $20
billion.
Many nursing facilities receive reimbursement from both Medicare
and Medicaid for care and services provided to eligible residents.
Under Medicare Part A, skilled nursing facility services are paid on
the basis of cost for covered stays of a limited length. Nursing
facility residents may be concurrently eligible for benefits under
Medicare Part B. For Medicaid-eligible residents, extended nursing
facility stays may be reimbursed by state-administered programs
financed in part by Medicaid.
Nursing facilities and their residents have become common targets
for fraudulent schemes. Nursing facilities represent convenient
resident ``pools'' and make it lucrative for unscrupulous persons to
carry out fraudulent schemes. The OIG has become aware of a number of
fraudulent arrangements by which health care providers, including
medical professionals, inappropriately bill Medicare and Medicaid for
the provision of unnecessary services and services which were not
provided at all. Sometimes, nursing facility management and staff also
are involved in these schemes.
False or Fraudulent Claims Relating to the Provision of Health Care
Services
The government may prosecute persons who submit or cause the
submission of false or fraudulent claims to the Medicare or Medicaid
program. Examples of false or fraudulent claims include claims for
items that were never provided or were not provided as claimed, and
claims for services which a person knows are not medically necessary.
Submitting or causing false claims to be submitted to Medicare or
Medicaid may subject the individual or entity to criminal prosecution,
civil penalties including treble damages, and exclusion from
participation in the Medicare and Medicaid programs. The OIG has
uncovered the following types of fraudulent transactions related to the
provision of health care services to residents of nursing facilities
reimbursed by Medicare and Medicaid:
Claims for Services Not Rendered or Not Provided as Claimed
Common schemes entail falsifying bills and medical records to
misrepresent the services, or extent of services, provided at nursing
facilities. Some examples follow:
One physician improperly billed $350,000 over a 2-year
period for comprehensive physical examinations of residents without
ever seeing a single resident. The physician went so far as to falsify
medical records to indicate that nonexistent services were rendered.
A psychotherapist working in nursing facilities
manipulated Medicare billing codes to charge for 3 hours of therapy for
each resident when, in fact, he spent only a few minutes with each
resident. In a nursing facility, 3 hours of psychotherapy is highly
unusual and often clinically inappropriate.
An investigation of a speech specialist uncovered
documentation showing that he overstated the time spent on each session
claimed. Claims analysis showed that the speech specialist actually
claimed to spend 20 hours with residents every day, far more time than
possible. Further investigation revealed that some residents had never
met the specialist, and some were dead at the time when the specialist
claimed to have provided speech services to them.
A company providing mobile X-ray services made visits to
nursing facilities, and billed for taking two X-rays when only one was
actually taken. The case also presented serious concerns about quality
of care when the investigation revealed that company personnel were not
certified to take X-rays.
Claims Falsified To Circumvent Coverage Limitations on Medical
Specialties
Practitioners of medical specialties have been found to
misrepresent the nature of services provided to Medicare and Medicaid
beneficiaries because the Federally funded programs have stringent
coverage limitations for some specialties, including podiatry,
audiology, and optometry. For instance:
The OIG has learned about podiatrists whose entire
practices consisted of visits to nursing facilities. Non-covered
routine care is provided, e.g., toenail clipping, but Medicare is
billed for covered services which were not provided or needed. In one
case, an investigator discovered suspicious billing for foot care when
it was reported that a podiatrist was performing an excessive number of
toenail removals, a service that is covered but not frequently or
routinely needed. This podiatrist billed Medicare as much as $100,000
in 1 year for toenail removals. Investigators discovered one resident
for whom bills were submitted claiming a total of 11 toenail removals.
An optometrist claimed reimbursement for covered eye care
consultations when he, in fact, performed routine exams and other non-
covered services. His billing history indicated that he claimed to have
performed as many as 25 consultations in one day at a nursing home.
This is an unreasonably high number, given the nature of a Medicare-
covered consultation.
An audiologist made arrangements with a nursing facility
and affiliated physicians to get orders for hearing exams that were not
medically necessary. The audiologist used this access to residents
exclusively to market hearing aids. In this case, the facility and
physicians, in addition to the audiologist, could be held liable for
false or fraudulent claims if they acted with knowledge of the claims
for unnecessary service.
What To Look For in the Provision of Services to Nursing Facilities
The following situations may suggest fraudulent or abusive
activities:
``Gang visits'' by one or more medical professionals where
large numbers of residents are seen in a single day. The practitioner
may be providing medically unnecessary services, or the level of
service provided may not be of a sufficient duration or scope
consistent with the service billed to Medicare or Medicaid.
Frequent and recurring ``routine visits'' by the same
medical professional. Seeing residents too often may indicate that the
provider is billing for services that are not medically necessary.
Unusually active presence in nursing facilities by health
care practitioners who are given or request unlimited access to
resident medical records. These individuals may be
[[Page 30625]]
collecting information used in the submission of false claims.
Questionable documentation for medical necessity of
professional services. Practitioners who are billing inappropriately
may also enter, or fail to enter, important information on medical
charts.
What To Do if You Have Information About Fraud and Abuse Against the
Medicare and Medicaid Programs
If you have information about the types of activities described
above, contact any of the field offices of the Office of Investigations
of the Office of Inspector General, U.S. Department of Health and Human
Services, at the following locations:
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Field offices States served Telephone
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Boston........................ MA, VT, NH, ME RI, CT 617-565-2660
New York...................... NY, NJ, PR, VI....... 212-264-1691
Philadelphia.................. PA, MD, DE, WV, VA... 215-596-6796
Atlanta....................... GA, KY, NC, SC, FL, 404-331-2131
TN, AL, MS (No.
District).
Chicago....................... IL, MN, WI, MI, IN, 312-353-2740
OH, IA, MO.
Dallas........................ TX, NM, OK, AR, LA, 214-767-8406
MS (So. District),
CO, UT, WY, MT, ND,
SD, NE, KS.
Los Angeles................... AZ, NV (Clark Co.), 714-246-8302
So. CA.
San Francisco................. No. CA, NV, AK, HI, 415-437-7960
OR, ID, WA.
Washington, DC................ DC and Metropolitan 202-619-1900
areas of VA & MD.
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To Report Suspected Fraud, Call or Write
1-800-HHS-TIPS, Department of Health and Human Services, Office of
Inspector General, P.O. Box 23489, L'Enfant Plaza Station, Washington,
D.C. 20026-3489.
Dated: May 29, 1996.
June Gibbs Brown,
Inspector General.
[FR Doc. 96-15269 Filed 6-14-96; 8:45 am]
BILLING CODE 4150-04-P
