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Slam Dunks

Some cases seem like slam dunks, like the case against the apparently fictitious Baton Rouge Mental Health Clinics and its seven defendants who allegedly filed $225 million in claims, sold beneficiary information and obstructed justice by attempting to steal evidence from the local U.S. Attorney’s Office3. Yet other cases fall into a gray area.  On May 23 a trial began for a Houston doctor accused of billing $5.2 million in false claims who reportedly claimed that he “didn’t take a strong look” at medical records4. Instead, that defendant is pointing the finger at the home health agency that paid him a salary for referred patients. He claims he did not read every patient request for home health services, but rather relied on the agency to make sound judgments.

Matter of Trust

Although these large claims are more likely to be deemed fraud, we wonder whether the repeated errors doctors sometimes make in documentation, or errors billers and coders sometimes make in billing, could result in an organization being labeled as the next fraudulent entity. Most read these fraud articles thinking, “that won’t happen to us;” as Billy Joel claimed in his 1986 hit, “it’s always been a matter of trust.”

When hospitals or practices hire staff or credentialed physicians, after all, they place trust on those hires to be ethical and to minimize the errors they make. Would a few dollars billed incorrectly for a few thousand patients over a handful of years add up to possibly attract attention as fraud? Ultimately, if the anvil of a fraud accusation falls onto an organization’s head, every employee gets smashed. Whether or not we believe the Houston physician’s testimony, it highlights a key notion we all must consider seriously: oversight.

Avoid the Fraud Label

A manager overseeing employees is held accountable for his or her subordinates’ actions. Therefore, we have developed a set of key steps you must take, and considerations you must make, to ensure that your organization is not labeled as fraudulent.

1)    Educate yourself: How do you know if there is a documentation discrepancy if you don’t know what to look for? You should familiarize yourself with common errors in billing, coding and documentation to help ensure that repeated errors won’t be the root cause of a fraud accusation.

2)    Conduct your own regular billing audits: Like any corporation that hires an auditor to review its accounts, a provider also should conduct regular internal audits, whether using an external company or assembling an internal team to do so. This will help to uncover common errors, discrepancies and even misconduct that could result in a fraud accusation.  Why wait for RAC denials when we can find problems ourselves and fix them?

3)    Invest in documentation: Detailed and accurate patient records are necessary to submit to CMS to demonstrate that items or services were provided as claimed. If you are subjected to an audit and have a severe lack of detail in the patient record, it probably will result in a denial. You should invest in educating physicians on documentation, hiring and educating clinical documentation improvement specialists, and implementing a simple yet thorough EMR to help enhance documentation and organize records.

4)    Never destroy a record: If this does occur and that record is requested, you’ll be facing a criminal offense.

5)    Always tell the truth to investigating authorities: If you should find yourself under investigation, don’t try to conceal simple errors out of your own pride or fear of sudden unemployment. State the truth and admit errors. It’s far better to risk losing your job for making errors than to find yourself with thousands of dollars in fines and criminal charges for committing fraud.

Case in Point

Remember, self-disclosure and honesty are not only the best policies, but also the law. The whistleblower and qui tam laws exist for a reason: to encourage others to speak up if fraud is taking place. Take it from Aaron Beam, the former HealthSouth administrator who recently spoke at the Health Care Compliance Association (HCCA) conference in Las Vegas.

While at HealthSouth, Aaron did not speak up about the issues he saw and allowed a dominant boss and culture to keep things under wraps. He not only lost his job and everything he owned – he went to jail, too5.


About the Author

Gregory Calosso is a senior consultant for PACE Healthcare Consulting. Greg joined PACE in 2011 after receiving his Masters degree in health administration from the Sloan Program in Health Administration at Cornell University. His past experiences include working in hospital planning and business development, organizational leadership consulting, and clinical research. He holds an undergraduate degree from Cornell University’s Division of Nutritional Sciences.

Contact the Author


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1 http://www.cbsnews.com/8301-503544_162-57426455-503544/feds-charge-107-people-in-$452-million-medicare-fraud-crackdown/

2 http://www.reuters.com/article/2012/05/02/us-usa-healthcare-fraud-idUSBRE84117N20120502

3 http://www.justice.gov/opa/medicare-fraud-docs-2012/baton-rouge-us-v-jafri-et-al-detention-memo.pdf

4 http://www.chron.com/news/houston-texas/article/Houston-doctors-says-he-was-deceived-by-those-he-3581263.php

5 Watch his talk here: http://www.youtube.com/watch?v=Aln2tB5BHhQ

Avoiding Referral of a Medical Overpayment to the Treasury


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