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On the Largest Medicare Fraud Case in History – $100 Million
By Deborah Peel, MD
- This case is “the largest single Medicare fraud case” in history.
- “There were no real medical clinics behind the fraudulent billings, just stolen doctors’ identities," says Janice Fedarcyk, FBI assistant director-in-charge. "There were no colluding patients signing in at clinics for unneeded treatments, just stolen patient identities."
- The organization stole the identities of doctors and filed applications to bill Medicare in their names, often providing a clinic address on the application that was, in fact, the location of a mailbox, according to the indictment. The organization then obtained the stolen identities of thousands of Medicare beneficiaries, including the identities of about 2,900 patients treated at the Orange Regional Medical Center in Orange County, NY.
- Members of the organized crime ring also are charged with operating a multi-million dollar scheme to defraud health insurance companies in the New York area by submitting claims for medically unnecessary treatments.
- In some cases, defendants allegedly staged auto accidents to generate fake patients who would then undergo unnecessary and expensive treatments that would be billed and reimbursed.
What I still do not get is the inability of very smart people in government, healthcare, and HIT to miss the REALLY big picture.
Privacy isn’t about preventing tomorrow’s profits or blocking meaningful use of data. It’s about the fact that if Americans lose ALL control over personal information in healthcare, we will lose all our privacy rights in the Digital Age. Period. All of them. For every kind of information / data about us. Our strongest rights to control personal information are our rights to control health information.
If we lose the war over control of personal information in health, the US will become a total surveillance state and we will have lost the most precious right individuals have in Democracies: the right to be let alone. Do you think that we can remain a Democracy if everyone — government and private corporations — knows everything about us? There is a reason for the saying “information is power.”
By the way, I am not in the Tea Party or a radical. Standing up for medical ethics, the law, and the right to privacy is a very conservative position!
The big take-away is that as long as patients’ sensitive electronic health information and demographics are so poorly protected, millions of employees of hospitals, clinics, insurers, pharmacies, and health IT vendors will have open access to steal it. We will continue to see an explosion of multi-million dollar healthcare fraud, identity theft, and medical identity theft, unless we radically redesign our health IT systems, protect health data wherever it flows, and restore the right of consent.
The high-profile of this case is supposed to discourage criminals and potential criminals, but when millions of employees in healthcare, government, and health technology corporations have open access to all patient health data, the likelihood of getting away with data theft is high. The innumerable outside hackers and criminals whose business is stealing valuable health data will never stop.
The only solution is to require comprehensive and meaningful privacy and security for all health data, wherever it flows:
1) Restoring patients’ rights to control electronic health information would end open to the nation’s health data by millions of employees of the healthcare system, insurance, government agencies, and technology industry. Requiring informed consent before ANYONE can see our records is simple, cheap, and easy if we require robust electronic patient consent for all data use or exchange.
2) Requiring and enforcing ironclad, state-of-the-art security for all health IT systems and health data wherever it is held online is essential.
If we don’t require and build trusted systems now, before ‘wiring’ all health data systems together, before systems are ‘interoperable’ and before every American is required to have an electronic health record, we will destroy privacy for generations. Once our sensitive data is ‘out’, like Paris Hilton’s sex video, it can never be made private again. And when healthcare systems cannot be trusted, people refuse to get needed treatment, fearing their jobs and futures will be endangered. Creating a healthcare system that people are afraid to use is a national disaster. Trust takes a long time and is very expensive to rebuild.
The implications for Democracy if we lose the right to privacy in healthcare are dire.
Deborah C. Peel, MD is the founder of Patient Privacy Rights.
Before Extending Software Support Contracts, Consider Alternatives
By Tony Paparella
It’s common for a healthcare organization to become unnecessarily tied to an extended support contract when it retires an HIS in favor of a new system. The old system is not an ideal data storage solution. Although patient accounting and clinical data sets still require some functionality and real-time user access, the legacy application is expensive overkill for what is needed.
Support contracts typically run a year or more in length, meaning they’re oftentimes paid for longer than necessary. Furthermore, it may be difficult to negotiate favorable rates and terms with a vendor facing long-term loss of revenue.
Other times, purchasing a contract isn’t an option; the system may be so outdated that the company that owns the software no longer offers support. This places the organization in a precarious position, facing potential loss of vital data. Furthermore, IT staff may become burdened with legacy system upkeep, deflecting efforts away from the new HIS.
“Doing nothing” or opting for an inadequate option invites serious compliance and financial risks. Millions of dollars (and the jobs of CIOs and department directors!) can be lost to: interruption to account billing/cash flow; inability to respond to a payer audit (such as RAC and commercial insurance audits); noncompliance with Federal and State data retention requirements; loss of access to the legal medical record and; increased hardware/software expenditures.
Additionally, fines for non-compliance with Federal employment record, HIPAA and other retention requirements can be significant. Depending on the statute, data retention requirements range from three to 28 years – meaning a short term, one-dimensional solution won’t do.
Fortunately, signing an extended support contract isn’t the only option for organizations that must access and manage legacy data.
Internal warehousing may be considered as an alternative – metaphorically, a home for data, albeit largely unfurnished. Though data access and management is inherently restrictive, this option is typically the most time- and cost-efficient to implement.
In a full detail conversion, all legacy account data is converted into the new system. If precisely executed, compliance and cash flow are maintained. Often, however, the vendor will decline to bring old data into the new HIS. Hence, the risk of cash flow interruption. A high degree of planning and analysis is required before implementation.
Legacy data can also be migrated to a healthcare active archive specifically designed to allow end users to access and update accounts, run reports and, in some cases, post payments and bill accounts. Advance preparation is essential. In some instances, an organization may need to specifically task an IT team member with helping coordinate the migration of data.
Proper planning and preparation will help your organization sidestep a burdensome legacy system support contract. Understand the risks and investigate your options many months in advance.
Tony Paparella is president of MediQuant Inc.
The Quest for Price and Quality Transparency
By Colin Konschak
What one hospital charges for a particular procedure varies widely based on a host of factors. Understandably, many providers who are otherwise all for transparency when it comes to patient outcomes are reticent to disclose cost data. There are real reasons for concerns on the globalization of medicine. However, health care is largely a local phenomenon.
What are the compelling reasons for being as transparent with prices as with anything else? For one, increasingly, consumers are armed with price information today that exceeds anything they could have assembled even just a few years back. Also, in the mind of many consumers, price equals quality. Logical or not, this notion has become ingrained as a result of their consumer experience in other industries.
Wine under one label is deemed more expensive than wine under another label, even in the case where the wine has proved to be exactly the same, from the same source, processed and delivered in exactly the same manner.
Reputation Enhances Price
At the supermarket, branded merchandise still sells at a premium compared to store or generic brands that offer the same ingredients, molecule by molecule. Your hospital’s reputation could prove to be the deciding factor in whether or not a patient will plunk down more money to be treated by you over others who, based on all comparison measures, offer exactly the same care and service.
Suppose a consumer does his homework and finds that you and a competitor have entirely equal success rates for particular procedure, and you charge 15% more. Is this a reason to fear price transparency? No, because with all the data available for a consumer to peruse to his heart’s content, the decision to choose one provider over another is multifaceted. Price is one factor, albeit an important one, among several.
Many consumers will go with the lowest price. Many will choose the best value – a blend of price and quality. Short term, there is not much you can do about the prices for some of the procedures you charge. In the long run, everything is up for grabs.
More Business, Lower Prices
The more often a hospital performs a particular procedure, and the more experience its doctors accrue, the better it is able to offer that procedure at a lower price. Even in health care, greater business volumes contribute to economies of scale. In the short run, you can’t do that much about the volume you handle for any particular procedure. In the long run, you could seek dominance in your local or regional area by publicizing your experience in a given procedure. Thus economies of scale could result and price transparency would work to your favor.
At Alegent Health, based in Omaha NE, the prevailing attitude is that consumers have a right and ought to be able to easily know how much a provider charges. Three years ago, Alegent launched My Cost, found at www.alegent.com, a consumer-friendly feature that offers cost estimates for a variety of tests, procedures, appointments, and services.
So, You Want Cost Data
Visitors can simply enter the name of their insurance providers and any co-payment or deductible information. The system then presents a cost estimate that is useful in personal health care decisions.http://www.alegent.com, The visitor is also treated to financial assistance information via links provided, and a phone number in case their anticipated procedure is not listed on the site. Now up and running for nearly three years, more than 50,000 cost estimates have been generated at My Cost.
Alegent’s experience in promoting price transparency has been that consumers appreciate the honesty and openness of the organization. Instead of price transparency scaring away potential business, in this case it has led to stronger provider-patient relationships. Alegent’s CEO says transparency “isn’t necessarily easy, and it does take courage, but in the end it is the right thing to do for consumers and the community.”
Make the Commitment
Commitment to transparency takes guts. Yet, what other choice is there? Fortunately, as we’ll see, there is room for creativity and initiative.
Providing information on the results that your hospital achieves for patients, at the medical condition level, is vital. Your data needs to include patient outcomes with an adjustment for risk based on prior conditions, the overall cost of care, and measurements for both extending through the care cycle.
Transparency also encompasses offering the experience your hospital has in treating specific medical conditions, by volume of patients, coupled with delineation of such treatments based on methods of care offered. Your processes, in the long run, can be improved only by understanding how results are achieved, which methods are most effective, how they might be refined to make critical differences, and what the actual outcome of such refinements have been.
Outcomes for a specific medical condition can and should be expressed many ways. For, say, shoulder surgery several validated measures exist such as range of movement, reduction of pain, and ability to function. Still other outcome measures for shoulder surgery include the interval between the initiation of care and return to normal activity such returning to work or playing tennis again.
Data related to the particulars of patients, known as patient attributes, such as gender, age, genetic factors, and prevailing conditions, are vital elements of transparency and are essential for assessing risk. Accurate diagnoses are vital for both the patient and the provider. A transparent provider will publish measures of diagnostic accuracy including cost, timeliness, and completeness.
Outcome measures that only address episodic interventions fall short because they fail to yield results meaningful to the patient. Such short-sighted reporting and consequence scoring can be counterproductive and lead to the publication of misleading data.
Failure is not pretty and human beings instinctively want to avoid reporting their own shortcomings, much like organizations. Still, ineffective treatments – errors in procedure, medication, or treatment – and complications following a procedure need to be identified and scored. As unpleasant as this task may be, it is a step on the path to improved levels of treatment and overall service. You cannot fix a problem that you refuse to acknowledge.
Expand Your Measures
A traditional core measure, “the 30-day readmission rate,” tracked by the government, is of course a potential indicator of poor quality. Who wants too many patients are readmitted within 30 days for the same problem.
You may be able to devise your own kind of data measures by tinkering with traditional data measures. For example, you could align your total quality management efforts, such as your Six Sigma Performance Improvement initiatives, around improving the 30-day readmission rate and devote resources to that. In turn, for each of the core measures which need to be fully transparent, you may wish to devise two, three, four or more strategies to ensure that your scores improve over time. Rest assured, other providers will be doing the same.
Costs Mysteries No More
Unlike most businesses, many hospitals, to this day, don’t know what their actual charges ought to be. They charge for this procedure or that based on tradition, competition, payer contracts, or whatever cost data they can scrape together. A comprehensive understanding of true cost is often lacking. If and when the government mandates that hospitals publish price and quality information, they will need the technical ability to do so.
In almost all cases, some web restructuring proves to be vital. There needs to be a huge consumer section that is highly inviting. Take the bull by the horns and invite the consumer to go patrolling through your data. Just as industrial companies publish annual reports with a profit and loss statement, balance sheet, and cash flow analyses, you might choose to offer a five-year projection as to the life cycle cost of a procedure and its follow up.
Implications for Your Hospital
- Is transparency part of your agenda for your weekly and monthly meetings?
- Has your hospital developed policies and procedures in relation to transparency?
- Within your own office or division, are top officers involved in the transparency discussion?
- Have you attended any conferences and symposiums on transparency?
- Are you monitoring other providers who have already made the conversion to transparency?
- Are you devising plans to capitalize on the inherent opportunities in offering transparent data?
Colin Konschak is the managing partner of DIVURGENT, a management consulting firm. His book on this topic was just released.