DoJ explains the fraudulent scheme: In addition to its standard payment system, Medicare provides supplemental reimbursement, called “outlier payments,” to hospitals and other health care providers in cases where the cost of care is unusually high.
Full Answer
Can outlier techniques be used in health care to target fraudulent activity?
Section 1886 (d) (5) (A) of the Act provides for Medicare payments to Medicare-participating hospitals in addition to the basic prospective payments for cases incurring extraordinarily high costs. To qualify for outlier payments, a case must have costs above a fixed-loss cost threshold amount (a dollar amount by which the costs of a case must exceed payments inorder to qualify …
How do you determine if a case qualifies for Outlier payments?
Hagens Berman successfully represented New Jersey whistleblower Anthony Kite, a health care finance expert who exposed a fraudulent Medicare scheme involving a number of hospitals in the northeastern United States. The federal government initially declined to litigate against several large health care providers named in Kite’s qui tam action, so Hagens Berman’s whistleblower …
What is outlier detection in dental fraud?
· The Centers for Medicare & Medicaid Services (CMS) would be interested in learning about cases where a hospital is fraudulently increasing its charges to obtain an outlier payment. The Office of the Inspector General expressed concern in 2013 that hospitals might be taking advantage of this system. If you have evidence a hospital has submitted false claims, …
What is Medicare fraud and how can you avoid it?
Those cases are the kind that trigger Medicare outlier payments-the extra money Medicare pays on cases in which the cost of treatment far exceeds the DRG reimbursement. That strategy, combined with what the company now acknowledges have been aggressive increases in its listed gross charges, has been a rocket booster for the proportion of Tenet's Medicare revenue …
What are Medicare outliers?
Medicare makes supplemental payments to hospitals, known as outlier payments, which are designed to protect hospitals from significant financial losses resulting from patient-care cases that are extraordinarily costly.
What is a claim outlier?
To qualify as an outlier, the claim must have costs above a fixed loss threshold amount. The Centers for Medicare & Medicaid Services (CMS) publishes the amount in the annual Inpatient Prospective Payment System (IPPS) Final Rule.
What is an outlier threshold?
Outlier Threshold means a dollar amount by which the total billed charges on the claim must exceed the MS-DRG Allowable Fee in order to qualify for an additional Outlier amount.
What is an outlier DRG case?
Outlier cases means those DRG cases, including transfer cases, in which the hospital's adjusted operating cost for the case exceeds the hospital's operating outlier threshold for the case.
How are Medicare outpatient outliers calculated?
Outlier payments are determined by: (1) calculating the cost of services on OPPS claims (multiplying the total charges for covered OPPS services by an outpatient cost-to-charge ratio); (2) determining whether these costs exceed 2.5 times the OPPS payments; and (3) allowing 75 percent of the amount by which the costs ...
How does a claim qualify for the high side cost outlier payment?
To qualify for outlier payments, a case must have costs above a fixed-loss cost threshold amount (a dollar amount by which the costs of a case must exceed payments inorder to qualify for outliers).
How do you calculate outlier threshold?
A commonly used rule says that a data point is an outlier if it is more than 1.5 ⋅ IQR 1.5\cdot \text{IQR} 1. 5⋅IQR1, point, 5, dot, start text, I, Q, R, end text above the third quartile or below the first quartile. Said differently, low outliers are below Q 1 − 1.5 ⋅ IQR \text{Q}_1-1.5\cdot\text{IQR} Q1−1.
How do you find outlier threshold?
In most of the cases a threshold of 3 or -3 is used i.e if the Z-score value is greater than or less than 3 or -3 respectively, that data point will be identified as outliers.
What does cost outlier mean?
A high cost outlier is an adjustment to the Federal payment rate for Long-Term Care Hospital (LTCH) stays with unusually high costs that exceed the typical cost for a Long-Term Care- Diagnosis Related Group (LTC-DRG).
What is a real life example of an outlier?
Outliers can also occur in the real world. For example, the average giraffe is 4.8 meters (16 feet) tall. Most giraffes will be around that height, though they might be a bit taller or shorter.
What is the fixed dollar threshold for outlier payments for 2021?
Outlier Payments (pp. 166-170): To ensure CY 2021 aggregate outlier payments equal 1.0% of estimated total OPPS payments, CMS finalized a fixed-dollar threshold of $5,300 combined with the multiple-threshold of 1.75 times to Ambulatory Payment Classification (APC) payment rate.
FRAUDULENT CHARGES, SOARING PAYMENTS
Kite reentered the health care field in 2001 and noticed that Warren Hospital, where he was consulting, saw its Outlier payments rise by nearly 100% between 2000 and 2001, from $4.8 million to $9.43 million. He noticed a similar dynamic at another hospital in 2002 and became suspicious.
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Potential Violations of the False Claims Act
The scheme will either defraud the government by making routine cases look extraordinarily costly or grossly inflating payments from Medicare in legitimate outlier cases.
About Outlier Payments
Hospital claims for inpatient stays through Part A are processed through the Inpatient Prospective Payment System. Medicare normally reimburses hospitals for patient care according to the appropriate Diagnostic Related Groups. The government pays a flat fee for patient care rather than an itemized bill.
When a major way of defrauding the system is found, what happens?
When a major way of defrauding the system is found competitors soon get the message and it becomes prevalent, first in some localities, and ultimately industry wide. They have to follow to keep up.
What is upcoding in healthcare?
Upcoding is a form of fraud where fees are increased by falsely inserting a patient's care into a better paying bracket than it is entitled to. The Outlier and similar strategies are a variant of upcoding. Patients are classified as sicker that they really so that they qualify for lucrative extra payments. There are many other ways in which upcoding can occur.
What did Senator Grassley do?
His committee set about a broad investigation into Tenet's practices. He was scathing about these and the company's track record. This was a company which had offended spectacularly in the early 1990s and had been operating under integrity agreements and other restraints.
Is fraud a problem in health care?
Fraud is a relevant and rampant problem in health care. The interest in data mining tools for the use of fraud detection in health insurance industry has gathered increased attention in the business world because of the bottom line impacts. Outlier detection, as one of the promising fitting technologies for fraud detection, has not yet been widely researched in the health care domain.
Is fraud detection a problem?
Fraud detection in the U.S. medical insurance industry is a prevalent and costly problem. Outlier detection was shown as useful approach to reveal fraudulent providers, was found to be useful for targeting potential fraudulent cases, and was specifically promising as an interactive technology to guide fraud investigators.
What are the four categories of Medicare fraud?
Illegitimate Medicare spending can be divided up into four categories: Fraud, scams, abuse and waste. Medicare fraud and scams are intentional, dishonest acts. Abuse and waste can sometimes be the result of honest mistakes or neglectful acts with no harm intended, but the effects can be just as damaging:
What is the number to call for Medicare fraud?
1-800-557-6059 | TTY 711, 24/7. The above scenario is just one example of a recent type of Medicare scam. Let’s take a deeper look at Medicare fraud, including the types of scams to be aware of and how you and your loved ones can stay safe.
Is Medicare fraud a scam?
Medicare fraud and scams are intentional, dishonest acts. Abuse and waste can sometimes be the result of honest mistakes or neglectful acts with no harm intended, but the effects can be just as damaging:
What is Medicare scam?
Medicare scams, like the one described above involving Medicare cards, are when individuals pose as health care providers to gather and use a Medicare beneficiary’s personal information to receive health care or money they are not entitled to.
What are some examples of Medicare abuse?
One example of Medicare abuse is when a doctor makes a mistake on a billing invoice and inadvertently asks for a non-deserved reimbursement. Medicare waste involves the overutilization of services that results in unnecessary costs to Medicare.
Can Medicare call you out of the blue?
In other words, Medicare will never call you out of the blue. This is very important to remember as you look to keep yourself safe from Medicare fraud, scams and abuse.
What is the criminal law for health care fraud?
This umbrella law prohibits the defrauding of health care programs and the receipt of money or property owned by a health care benefit program in connection with the delivery of or payment for health care benefits, services or items.
