Posted and filed under Compliance, Fraud, FWA, Healthcare.

Retired OIG Special Agent and Advize’s Director of Litigation & FWA Support will be stepping in each week to examine current fraud trends from the lens of an investigator. Stay tuned for weekly insights, updates, and information on healthcare’s most expensive crimes.

We have all heard the phrase “a penny wise, but a pound foolish,” but how does it relate to fraud, waste, abuse and compliance? If you aren’t properly investing in good compliance practices, this is where it fits.

Unfortunately, everything has a financial price.  When you cut corners on your compliance to save money, it’s just a matter of time until the OIG comes calling, and all that savings from a lack of proper compliance investment will yield significant financial losses.  Recently, a client of Advize’s had us do a second review of denied claims from the Medicare Administrative Contractor (MAC).  The MAC conducted several probe audits, which had very disastrous results for the client; nearly 80% in denials in both audits.  The provider had an educational call with the MAC, yet still had poor results in a third audit.  It’s common to have an educational call and a repeat audit to test if the educational session worked.

We agreed with the MAC, advising that no appeals be conducted on the denials.  We also suggested a statistical sampling of the overall practice be conducted, which would identify areas for improvement, potential undercoding, but more importantly, the prospect of a self-disclosure.  I’ve discussed self-disclosures several times and am a proponent of doing them.

The provider informed that they were not interested in pursuing any further internal audit and review work, as there was “no budget” for the work.  A penny wise, a pound foolish.  The matter was referred to the Unified Program Integrity Contractor (UPIC) for additional benefit integrity work.  It will likely end up as a referral to the OIG, which will trigger a host of other things.  The provider will then need to budget for attorneys, Advize to come back in, and who knows what else.  A self-disclosure or an overpayment would have the potential of saving a lot of grief, because you remain in the driver seat and control how the process flows.  Once OIG is involved, you are a passenger on a bus that is not stopping merely because you do not like the route.

I was amazed at how the provider just wanted to wait and see where it all went. As many of you already know, it is going to go in a direction that will likely not benefit the provider. The worst part is that Advize was engaged in conjunction with a healthcare law firm that provided very competent and specific legal advice on the entire matter.  Providers do not ever think it will be them, until it is them.  Because they have not been contacted by the UPIC and the MAC had not contacted them in some time, they felt that they were in the clear.  As crass as this sounds, I likened it to a verbal disease; sometimes the government goes dormant, but it never really goes away until there is a cure.

Advize Health LLC is a healthcare advisory and consulting company that provides a breadth of healthcare industry services in the payer, provider, and legal communities. Contact Eric Rubenstein for more information on our Fraud Spotlight series.