IMPROPER AUTHORIZATION OF MEDICAL PROCEDURES


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Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Scott Lampert, Special Agent in Charge of the New York Regional Office for the Office of Inspector General for the Department of Health and Human Services (“HHS-OIG”), announced today that the United States simultaneously filed and settled a civil fraud lawsuit against benefits management company CaRECORE NATIONAL LLC (“CARECORE”), now part of eviCore healthcare, for authorizing medical diagnostic procedures paid for with Medicare and Medicaid funds over a period of at least eight years without properly assessing whether the procedures were necessary or reasonable. The settlement, approved in Manhattan federal court by U.S. District Judge Richard J. Sullivan, resolves CARECORE’s civil liabilities to the United States under the federal False Claims Act. Under the settlement, CARECORE must pay a total of $54 million, of which $45 million will be paid to the United States and $9 million will be paid to the states that are named as plaintiffs in the suit. CARECORE also admitted and accepted responsibility for, among other things, improperly approving prior authorizations requests for hundreds of thousands of diagnostic procedures paid for with Medicare Part C and Medicaid funds.

Acting U.S. Attorney Joon H. Kim said: “Benefit management companies are supposed to determine whether medical diagnostic procedures paid for with Medicare and Medicaid funds are necessary and reasonable. Instead, CareCore blindly approved hundreds of thousands of medical procedures over a period of many years, leaving Medicare and Medicaid to foot the bill. This lawsuit and settlement shows our commitment to ensuring that fraud and waste involving federal funds will be identified and stopped.”

Health care is claiming an ever-increasing share of national wealth. In recent years, healthcare expenditure in Organization for European Cooperation and Development (OECD) countries has been rising at a rate one to two percentage points faster than GDP. If this trend were to continue, healthcare would represent more than 25 percent of France’s GDP—and more than 35 percent of the US’s—by 2050. Clearly, action is needed to bring costs under control.

Moreover, medical errors and other safety lapses persist even in the strongest health systems and are often caused by inconsistencies in care and lack of adherence to good practices. Outcomes vary enormously across healthcare systems and among the care providers within them. For instance, maternal mortality is four per 100,000 births in Italy, but more than three times higher in the US, at 14. Postoperative pulmonary embolisms and thrombosis affect 865 of every 100,000 patients leaving a hospital in France, but just 107 in Belgium, a difference of 706 percent. Regular albumin screening to prevent complications is provided annually for 88 percent of diabetics in the Netherlands, but for fewer than 30 percent of those in France.

Medical errors are the third-most-common cause of death in the US after cancer and heart disease, accounting for more than 250,000 deaths every year. Addressing these issues and the variations in care practices and quality that cause them is another priority for all countries.

As payment and care delivery models shift from episodic, fee-for-service care toward population health and value-based reimbursement, health care leaders are focused more than ever on patient engagement as a key to driving down costs and improving outcomes. And yet, as so many of us know who have attempted to manage our own care or tend to sick family members, the health care system rarely feels like it’s been set up to help us succeed.

What’s needed is a fundamental redesign of the patient’s role — from that of a passive recipient of care to an active participant charged with defined responsibilities, equipped to dispatch them, and accountable for the results. In other words, we need to view the patient’s role as a job and then design that job in such a way as to drive the best health outcomes possible.

The most profound reforms of a public health service may come from initiatives that operate in the shadows with little financial resources because they attract less attention from vested interests. Reform projects that operate away from scrutiny can develop resourcing space that allows for rapid change with little negotiations and minimal coordination cost.

Public health reform initiatives which attract little attention can achieve bigger results because they are relatively shielded from too much interference. Change can come despite, and perhaps even because of, a lack of resources. Usually, organizational change entails a shift in resource control, and this prompts resistance by people who feel this can undermine their resource-derived authority.

Patient advocates and others who have studied the U.S. health care system have catalogued the degree of unpaid, and unsupported, work patients take on in service of their own care. The average, low-risk patient must follow up on referrals to specialists, fill and manage medications, and comply with physical therapy and other regimes. With legacy, pre-internet software systems still the norm in most hospital environments, patients also become unpaid couriers, shuttling critical health data from one provider to the next.

Nearly 30% of patients physically carry x-rays, test results, and other critical health data from one provider’s office to the next. And 55% say their medical history is missing or incomplete when they visit their doctor.

For patients who suffer from chronic or complex conditions, the burden of treatment must be shouldered alongside the burden of illness. The self-management of a chronic illness demands, on average, two hours of patient work each day — work that is often poorly supported, stressful, and frustrating in nature. Rather than having patients as passive recipients of care, they must be active producers of their care, in partnership and coordination with physicians and clinical staff.

We need to acknowledge and account for all the patient work that now goes unrecognized and unsupported. This means grappling with the complexity of tasks patients take on as they seek care across an ever-expanding number of settings — work that varies widely depending on acuity level, disease state, demographics, insurance type, socioeconomic conditions, and so on.

For years, hospitals and medical groups, looking to move the needle on patient satisfaction, have focused largely on managing and optimizing isolated episodes of care. Surveys focus on patient satisfaction with individual encounters within a single institution. But the way we access and experience care has changed. Where we used to have a lifelong relationship with a family doctor, we now switch doctors frequently due to scheduling issues, changes in insurance coverage, and other factors. We’re also more likely to seek care outside the walls of health systems or the boundaries of specific networks — whether it be through urgent care visits, virtual consults, or alternative therapies. And we know that much of what affects our health, for better or worse, happens between visits.

As we shift toward population health, with provider reimbursements tied directly to improved outcomes, we need to move from managing episodes of care to managing the entire patient journey across the full ecosystem of care. The patient journey becomes the operational backdrop against which patients, physicians, and other staff and caregivers must play their respective parts.

If the patient is to have a job in the care-delivery process, we must apply the same principles of intentional work design to their jobs as we do to those of physicians and clinical staff. Only 20% of doctors report high levels of engagement in their jobs. Those who are highly engaged, however, point to a few key drivers: trust in leadership and the system, open communication and feedback, and an operationally effective work environment that allows them to deliver high-quality patient care. It’s not a stretch to suggest that patients would be engaged and motivated by the same drivers.

The roles and responsibilities of patients currently are almost never clearly defined or fully supported. Patients routinely take on frustrating tasks, such as the transfer of vital information from one provider to another, that technology should be designed to handle. They struggle to get access to the information they need to tend to their own care, and get little feedback or satisfaction from seeing their actions move the needle on results. For patients to be satisfied with care, motivated to play their part, attentive to required screenings, and compliant with care, they need the support of a system designed to help them do their jobs effectively.

Saying that the patient has a job to do does not in any way suggest that patients must shoulder the burden of their responsibilities unsupported. Technology is the key enabler of patients’ success, providing the information, visibility, and feedback they need to do their jobs.

The goal should be to understand all the key points of engagement that are needed in order to support the patient before, during, and between visits. Naturally, the patient journey and points of engagement look very different for a healthy 28-year-old than they do for a 55-year-old smoker with diabetes and hypertension. But both have jobs to do that can only be done effectively with the support of surrounding technology.

For example, data aggregated from a multitude of sources — from electronic health records to insurance data — can be used to paint a complete picture of the patient. Smart scheduling systems and patient portals help patients access care on demand. Reminders via text and other modes help the patient arrive on time and prepared. Open data exchange allows personal health information to travel from one provider or encounter to the next so the patient isn’t playing courier.

For high-risk patients, wearable devices and care management apps help them stay compliant and connected to care teams 24/7. Technology can’t do patients’ job for them. They still need to embrace behavior change and take accountability for their own care. But it can make their job easier to do, more likely to be effective, and more satisfying and rewarding.

It’s widely accepted that we will never realize the goals of health care’s Triple Aim — reducing costs, improving the health of populations, and improving the patient experience — without putting patients at the center of their care. To do this effectively, however, health care leaders must do more than retool old mission statements or retrain physicians and frontline staff. They will need to reorient their thinking to acknowledge the critical job of the patient, design it thoughtfully into new operational frameworks, and invest in the networked technology required to support it all. Only when patients, physicians, and staff are all working together, fully engaged and enabled to do what each does best, will we achieve the clinical and financial outcomes we are all aiming for.

 

Harnessing the full potential of digital innovations in healthcare could have a profound impact on the quality and financial sustainability of health systems. It would also involve profound changes for care providers and healthcare professionals. To shift mind-sets, healthcare authorities will require a clear and compelling vision and ambitious action. But the benefits for both quality and economics will be well worth it.

REWARDING DOCTORS FOR KEEPING PATIENTS HEALTHY

Right now, the majority of health care is paid for by fee for service. Doctors are paid each time they order a service, such as medical tests, surgery, or medications. The danger is that this can lead to too many tests, too many procedures, too many medications. And since everything in medicine has risks and benefits, we know that doing too much can actually harm patients. Too many prescriptions can lead to harmful side effects or unanticipated interactions among drugs. Doing unnecessary screening tests lead to false positives, images or lab results that indicate there might be a problem, when there really isn’t a problem. This then leads to more and often invasive tests, which carry their own risks. The current system rewards doctors for providing more care and more services, with little regard for whether those services provide any value.

Most physicians are very concerned about antibiotic prescribing and think it’s a bad thing, but when you look at their electronic records, you see they’re doing it fairly often!

Antibiotic resistant illnesses, sometimes called superbugs, are on the rise — affecting 2 million Americans, with as many as 23,000 dying from them each year. And nearly half of the antibiotics prescribed outside the hospital aren’t appropriate or medically necessary.

A lot of people just go to their doctor and say I can’t miss work, I can’t miss school — may I have an antibiotic? Not realizing antibiotics aren’t risk free. They hand them out like M&Ms in a candy jar. We just want doctors to be really mindful when they prescribe.

Many of the problems we face in medicine are doctors’ doing. Physicians are people, too. Not all their decisions are driven by their understanding of disease — they also respond to social cues and the behavior of their peers in making decisions.

Many patients are harmed. Colonoscopies, which are used to detect colon cancer, are one example. They can be effective as a screening tool for people in their 50s and 60s. But as you get older, the lining of the colon thins. So the benefits begin to be outweighed by the risks that the colonoscopy could damage your intestines. A perforated colon requires surgery, and can result in sepsis or even death, while a small cancerous polyp might never kill an elderly person.

Mammograms can also be effective in catching breast cancer early. But they can result in false positives, biopsies, even surgery that does more harm than good. Another example is total hip or knee replacements. For the right patients, replacements can make people active again, which is terrific. But for some people, the risks of infection and other complications may outweigh any benefits. The problem is that the current fee-for-service model encourages even well-intentioned doctors to do procedures that may do more harm than good.

The profession is beginning to recognize this. For example, the American Board of Internal Medicine (ABIM) has developed an initiative called Choosing Wisely with a list of procedures and tests that are over-utilized given lack of evidence that they benefit patients. Examples include routine imaging for low back pain and use of antibiotics for upper respiratory infections.

Now there is a new approach called Accountable Care Organizations, or ACOs. The idea is simple. Instead of rewarding doctors and hospitals for the volume of services they provide, the system rewards them for keeping patients healthy—keeping them out of the hospital, for example, and for preventing illnesses and complications. ACOs are accountable both for the cost and quality of care for patients.

Hospitals or doctor groups that decide to become ACOs must agree to meet quality measurements. With all patients, the strategy is to engage them, to give them the most complete information, to support them in their treatment plan, and to prevent unnecessary hospitalizations or readmissions. It is called shared decision-making. In the case of cancer, patients should be given information about all the treatment options—chemotherapy, radiation, surgery, or watchful waiting—and then decide, in collaboration with their doctors, what’s best for them.

HHS-OIG Special Agent in Charge Scott J. Lampert said: “CareCore’s irresponsible behavior compromised the integrity of the Medicare and Medicaid programs, and wasted millions of taxpayer dollars. HHS-OIG will continue to ensure that companies that do business with federally-funded health care programs do so in an honest fashion.”

The United States Complaint-In-Intervention (the “Complaint”) alleges that starting in as early as 2005, CARECORE, which performs prior authorization review for diagnostic procedures on behalf of many insurers, including those providing insurance through Medicare Part C and Medicaid Managed Care, was unable to review prior authorization requests in a timely fashion, and in order to avoid contractual penalties for failing to timely process the requests, CARECORE instituted a practice of improperly approving prior authorization requests. By 2007, CARECORE had formalized this practice into the “PAD program.” Between 2007 and 2013, through the PAD program, CARECORE improperly authorized over 200,000 diagnostic procedures.

As part of the settlement, CARECORE must pay $54,000,000 to resolve both federal and state false claims act claims, the latter of which will be the subject of a separate settlement agreement between CARECORE and the states. In the settlement, CARECORE admits, acknowledges and accepts responsibility for the following conduct:

  1. CARECORE provides services to health insurers, including managed care organizations that provide services to beneficiaries of the Medicare Part C and Medicaid programs (collectively, “MCOs”). CARECORE provides prior authorization services, which consist of screening prior authorization requests for certain procedures for medical reasonableness and necessity. During the times pertinent to this matter, CARECORE’s Clinical Reviewers, who generally were nurses, received information from the treating physicians and input that information into CARECARE’s proprietary software system. That software system, based on the information provided, either recommended approval of the prior authorization or recommended further review by a physician.
  1. Under the applicable regulations and contractual provisions, if a plan decides to implement prior medical necessity review in order to cover physician-ordered services, only a physician or other appropriate health care professional with sufficient expertise has the authority to deny a procedure. Thus, if a prior authorization could not be issued based on the information currently supplied by the treating physician, the prior authorization request, including all of the related information, was placed in an electronic queue, the Medical Review Queue. The prior authorization request could be accessed in the Medical Review Queue by a CAERCORE Medical Director, who is a physician retained by CARECORE, who would review the information and determine whether to conduct a peer call with the treating physician or appraise information gathered after the initial request in order to determine whether prior authorization of the procedure was appropriate, or should be denied.
  1. In order for the MCOs to meet timelines in the applicable regulations and/or pursuant to its contractual obligations and provisions, CARECORE was required to issue a determination on prior authorization requests within fixed time periods known as “Turn Around Times,” or “TATs”, often as little as 4 hours for urgent requests, and 48 hours for non-urgent requests. CARECORE was also subject to contractual monetary penalties if it failed to maintain performance standards, including meeting the processing deadlines set forth in the regulations and contracts.
  1. Starting in at least 2007, CARECORE developed the “Process As Directed,” or “PAD” Program. Under the PAD Program, CARECORE’s Clinical Reviewers would approve certain prior authorization requests awaiting physician review that had been on the queue for nearly the entire applicable TAT. The PAD Program consisted of Clinical Reviewers improperly approving certain prior authorization requests on the Medical Review Queue without having obtained any new objective medical information about the request, and without a Medical Director having independently reviewed the prior authorization request. These prior authorization requests (“padded requests”) were then transmitted to CARECORE’s client insurers, including MCOs, as preauthorized requests.
  1. In 2007, the PAD Program was formalized into corporate policy, which included detailed training materials and daily reporting of the number of padded requests to high-level executives then-employed at CARECORE. When daily regular review of the Medical Review Queue showed the volume of cases in the Medical Review Queue was too high to make a timely decision for a significant volume of requests for prior authorization, certain Clinical Reviewers were directed by then-management to approve requests for prior authorization without obtaining or considering any new medical information.
  1. From 2007 through June 13, 2013, CARECORE padded between 200,000 and 300,000 prior authorization requests.
  1. In CARECORE’s role managing the prior authorization process, it had medical information of the beneficiaries seeking prior authorization. When CARECORE approved padded requests, CARECORE made a representation that it had appropriately reviewed the requests when it knew it had not. Thus, those padded requests incorporated CARECORE’s false representation that it had approved a case after completing the required review process. The MCOs thereafter provided coverage based on CARECORE’s approval of the prior authorizations.
  1. MCOs would only pay for procedures that require a prior authorization if the prior authorization was granted in a manner consistent with the MCO’s policies and procedures. Thus, the PAD Program resulted in insurance claims related to the padded requests being presented to the MCOs for payment with federal and/or state government funds, and MCOs actually paid insurance claims made in connection with the padded requests.

The Complaint in this case was filed under the federal False Claims Act, which punishes violators who submit false claims or make false statements material to claims submitted to entities administering programs funded by the government. The allegations of fraud stated in the Complaint were first brought to the attention of the government by a whistleblower, who filed a lawsuit under the qui tam provisions of the False Claims Act. Those provisions allow private parties who have knowledge of fraud committed against the government to file suit on behalf of the government and share in any recovery. The United States may then intervene and file a complaint, as it did here.

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