Health Care Fraud Management

The Health Care Fraud Prevention and Enforcement Action Team (HEAT)
And Its Effect on Health Care Compliance and Law Enforcement

Thaedra Frangos
ECM 627-Z1
Fraud Management: Risk and Compliance
Professor Gary Reynolds

Abstract The Health Care Fraud Prevention and Enforcement Action Team (HEAT) was created in 2009 in response to nothing short of an egregious and systemic theft problem bleeding our health care system and the American taxpayers near dry. Peter Orszag, Director of the White House Office of Management and Budget, stated in a media briefing in 2009 that of the $98 billion in improper health care payments, $54 billion could be attributed to Medicare and Medicaid.
(Aldrich 2012) These numbers are not just staggering, but are increasing, and it was this increase in health care fraud that became the catalyst for the creation of HEAT. The multi-tiered nature of health care made it essential to create something greater than simple legislation or various regulations aimed at each individual layer of the health care system. Thus, HEAT became a means by which to not just deter and prevent health care fraud while enforcing current criminal laws around the country; it became a model of how to cooperatively join forces between public and private industry and mitigate health care fraud. The Medicare Fraud Strike Force, a joint initiative announced in May 2009 between the Department of Justice and Health and Human Services, is just one aspect of HEAT. Both HEAT and the Medicare Fraud Strike Force focus their efforts to deter and prevent health care fraud through successful enforcement of current anti-fraud laws around the country. Since the inception of HEAT’s and the Medicare Strike Force, there have been six major national Medicare fraud takedowns which charged nearly 600 individuals in connection with health care fraud schemes totaling just under $2 billion dollars in fraudulent billings. (DOJ 2013) This paper will address how the Health Care Fraud Prevention and Enforcement Action Team has impacted the compliance programs of those in the health care industry as well as how it has been an effective tool for local, state and federal law enforcement.
In an effort to combat health care fraud in the United States, the Department of Justice and the Department of Health and Human Services joined forces and created a Health Care Fraud Prevention and Enforcement Action Team (HEAT). However HEAT is more than just a “team” created to tackle health care fraud. As a cabinet-level directive, the Health and Human Services Secretary and the Attorney General direct HEAT and ensure it is a team with unfretted nationwide reach. In a true collaborative effort, HEAT is essentially a task force comprised of both law enforcement and professional staff with the goal of improving coordination, intelligence sharing, and training among every level of government from analysts and detectives to prosecutors and policymakers. (Doolittle 2012) The STOP Medicare Fraud website, administered by the Office of Inspector General of the Department of Health and Human Services details the mission of HEAT in five separate bullet points. Précis, HEAT facilitates corporation between governmental resources in an effort to prevent fraud, waste, and abuse through the investigation of individuals and organizations that abuse the healthcare system. Thus reducing the cost of health care, and, through educating providers in best practices and maintaining relationships within the law enforcement community, ensures health care affordability through fraud prevention and mitigation. (STOP Medicare Fraud 2013) The effects of the Health Care Fraud Prevention and Enforcement Action Team reach far beyond those individuals and providers ripping off the system. Through HEATs investigations and prosecutions, concrete recommendations for fraud mitigation have been established, and now through education and training, those recommendations can positively affect the compliance department of health care companies and providers alike. Through the Health and Human Services, Office of the Inspector General, HEAT created and disseminated provider compliance training, focusing on proactive mitigation. In addition to on-site and web-based training, HEAT created a pamphlet detailing how to operate an effective compliance program. The pamphlet, sub-titled “Cultivate a Culture of Compliance with Health Care Laws” focuses on six areas crucial to successful compliance programs. Although for ease of reading, the pamphlet outlines the areas essential to a successful health care compliance program separately, it is essential each compliance area is viewed as interdependent, smaller aspect of a whole rather than as an independent item to check off a to do list.
Policies and procedures are the first area that the HEAT pamphlet addresses. Compliance programs should be viewed as a dynamic, adaptive plan, and as such, regular review and updates to company policies is essential. Although it is necessary policies and procedures are written in a clear manner is common for all compliance programs, HEAT’s Take the Initiative pamphlet noted the importance of tailoring policies and procedures to their audience. (HEAT 2011) The tailoring of policies and procedures to the various layers of health care while relaying their interdependence to the greater health care system as a whole is a cornerstone concept in the fight against health care fraud, primarily because of the many layers of individuals and organizations involved. From pharmaceutical companies, to hospitals and doctors’ offices and their billing agencies, to individual patients, healthcare in the United States is a multi-tired system. Thus, cookie-cutter health care compliance programs are never going to effectively combat health care fraud. Other aspects addressed in HEAT’s Take the Initiative pamphlet include how to measure the effectiveness of a compliance program and training. Sound advice for any compliance program includes developing a program with measurable goals and benchmarks along with a means by which to measure successes. When combating healthcare fraud, a measurement of success in compliance could be assessed through comparing current losses in dollars with losses from a period not encapsulated by the current compliance program. Of course a decrease in financial losses equates to an increase in the compliance program’s effectiveness. However, if there is neither an increase nor decrease in financial losses, it goes without saying that an investigation into what may be done to strengthen compliance and decrease fraud should be launched. It is possible that the compliance program in question may not have sufficient funding and support from management. If this is the case, perhaps having management feel they are directly impacting the success of the compliance program through regular updates about risks, audits and investigations (HEAT 2011) may encourage a more vested interest in the programs success.
Management and staff alike must undergo compliance training, not just why compliance is necessary from a loss prevention and legal standpoint, but training as to the actual mythologies to be utilized in combating health care fraud. As with the compliance program itself, training must both be dynamic and required. Documenting successful completion of compliance training for every employee is essential from a legal standpoint. One of the benefits of the HEAT initiative is the creation of compliance training across various platforms. This allows for trends in health care fraud to be disseminated across the country to every level of health care providers in real time. From conferences and webinars, to publications and emails, networking among various levels of providers will allow everyone to stay current in trends and get new insights as to how to mitigate fraud. (HEAT 2011) These various informational platforms weave directly into the importance of open lines of communication, another area detailed in HEAT’s Take the Initiative pamphlet. Communication between various levels of government, organization management, employees, and outside individuals is imperative. An anonymous hotline should be created to report issues to any and every level of health care provider, as well as the creation and enforcement of a whistle-blower policy for employees who report potential problems to their employer. (HEAT 2011) Internal auditing and the enforcement of policies and procedures and prompt response to compliance issues are not just the final two areas that HEAT addresses in its provider compliance training pamphlet, they are the two areas in which HEAT has the greatest impact upon a compliance department in the health care industry. Diagnostic coding, contracts, and quality of care are the areas where health care fraud establishes its roots, yet with proactive reviews of both, fraud mitigation is well on its way. (HEAT 2011) Through ongoing auditing and monitoring, areas of potential risk should be identified and resolved. Although risk areas will differ depending on the type organization, there will be commonalities in their identification, and potentially their solution. For pharmaceutical companies, off-label drug promotion may be their weakest link, yet for a hospital, it may be the improper usage of diagnostic codes for treatment, thus greatly affecting payments for services and taxpayer dollars. Thus, through the use of networking and other compliance resources, ideas for potential solutions can be exchanged. One area the Health and Human Services, Office of the Inspector General (OIG) suggests not to be overlooked when searching for a solution are Corporate Integrity Agreements, which are often negotiated between OIG and the organization themselves. Although designed to outline obligations providers and entities must follow, the end result is their inclusion to participate in Medicare, Medicaid, and other federal health care programs. (OIG 2012) Yet, it is one of the last bullet points in Take the Initiative pamphlet that has, perhaps, the greatest impact on a compliance program in the health care industry, “delegate/empower teams closest to the issues to perform reviews, but be careful of possible conflicts or personal relationships that may interfere with getting an objective review.” (HEAT 2011) Compliance programs and the recommendation they tailor their programs for successfully combat health care fraud aside, the question remains, is HEAT an effective law enforcement tool? Unequivocally, the answer is yes. Health care fraud in the United States is a systemic problem. In 2007 alone, on the higher spectrum of estimations, American taxpayers lost $224 billion of the $2.24 trillion dollars spent on health care to theft by fraud. (NHCAFA 2009) Perhaps that was the true catalyst for universal change in mitigation and enforcement tactics.
During the first three years of its existence, the Health Care Fraud Prevention and Enforcement Action Team and their Medicare Fraud Strike Force criminally charged over eight hundred ten individuals with Medicare fraud totaling just under two billion in taxpayer dollars. (DOJ 2010) Yet the power of a taskforce such as HEAT and a focused strike force such as the Medicare Fraud Strike Force is far more than what is evident by any arrest statistics and monetarily assessed crimes. These cooperative efforts bridge the often otherwise siloed governmental management and law enforcement arenas to create a focused team of professionals with a common goal and little overhead. By nature, a taskforce allows more than local, state, and federal law enforcement to work together under a memorandum of understanding thwarting the usual red tape and jurisdictional sandbox; taskforces combine the skills of law enforcement with the analytical expertise of quasi-law enforcement and other governmental and private industry analysts. I cannot overstate the importance of boots on the ground combined with trend analysis. Expanded data and information sharing is the backbone of any successful taskforce, and this has certainly been the case for HEAT.
Specifically, in a case near and dear to my heart, forty-four members of the Armenian organized crime family Mirzoyan-Terfajanian were charged in two separate indictments with operating roughly one hundred eighteen fictitious medical clinics located in twenty-five states. These clinics submitted under $165 million in fictitious claims to Medicare. To date, it is described as “the largest Medicare fraud scheme ever perpetrated by a single criminal enterprise;” (FBI 2010) and it was investigated by HEAT. Internally, the operation was called “Diagnosis Dollars.” Originating from an allegation of the Social Security Numbers of Medicare being used illegally, it quickly grew to encompass stolen doctor identities that were then used to enroll the victim physicians as providers as Medicare providers. The Mirzoyan-Terfajanian family then created fictitious doctors offices and using the stolen New York Social Security Numbers, began billing for procedures that never occurred.
Fast-forwarding the clock, HEAT and its Medicare Fraud Strike Force are still going strong.
Currently, HEAT’s Medicare fraud Strike Force has expanded to include nine cities across the United States, (STOP Medicare Fraud 2013) and, to say the least, ineffective programs are usually not expanded. Therefore, it is clear that the collaborative efforts of local, state, and federal law enforcement agencies, coupled with the prosecutorial strength of government agencies and analytical knowledge and increased proactive compliance efforts of private industry, health care fraud in the United States is beginning to feel the pressure. The recovery of $4.2 billion dollars from health care fraud and the mitigation of nearly $14.9 in fraud speaks for itself. (HEAT 2013) Although the ultimate goal is not to recover the funds from, but rather prevent the theft of funds, HEAT is on the right track. With the inception of the Affordable Care Act, I believe the focus of HEAT and its Medicare Strike Force will be forced to adapt again. In the world of ever-changing white-collar crime, the methodologies of compliance programs and law enforcement must also stay dynamic. But these are trends that HEAT and the Medicare Strike Force will pick up on, and with continued diligence, will be able to mitigate, saving taxpayers millions of dollars while preserving the integrity of our health care
system.

References:

US Department of Justice – Press Release. (May 14, 2013). Medicare Fraud Strike Frost Charges 89 Individuals for Approximately $223 Million in False Billing. Retrieved from: http://www.justice.gov/opa/pr/2013/May/13-crm-553.html

Protecting Medicare and Medicaid: Efforts to Prevent, Investigate and Prosecute Health Care Fraud. Hearing before Committee on Judiciary: Subcommittee on Crime and Terrorism, United States Senate. (March 26, 2012). Testimony of Ted Doolittle, Director of Center for Program Integrity: Centers for Medicare and Medicaid Services; United States Department of Health and Human Services. Retrieved from: http://www.hhs.gov/asl/testify/2012/04/t20120326a.html

STOP Medicare Fraud: US Department of Health and Human Services and the US Department of Justice. (2013). HEAT Task Force. Retrieved from: http://www.stopmedicarefraud.gov/aboutfraud/heattaskforce/#

Press Release. (October 13, 2010). Manhattan U.S. Attorney Charges 44 Members and Associates of an Armenian-American Organized Crime Enterprise with $100 Million Medicare Fraud: Defendants Also Charged with Racketeering, Identity Theft, and Money Laundering Crimes Armenian "Vor" Charged with Protecting Alleged Medicare Fraud Scheme. Federal Bureau of Investigation – New York Field Office. Retrieved from: http://www.fbi.gov/newyork/press-releases/2010/nyfo101310.htm

United States Department of Justice: The Justice Blog. (August 27, 2010) HEAT: A Year of Tackling Health Care Fraud. Retrieved from: http://blogs.justice.gov/main/archives/934

Aldrich, N.
(August 2012). Medicare Fraud Estimates: A Moving Target? The Sentinel. Retrieved from: http://www.smpresource.org/Content/NavigationMenu/AboutSMPs/MedicareFraudEstimatesAMovingTarget/Medicare_Fraud_Estimates.pdf

HEAT: Office of the Inspector General, Health and Human Services. (Spring 2011) HEAT Provider Compliance Training- Take the Initiative: Cultivate a Culture of Compliance with Health Care Laws… Operating an Effective Compliance Program. Retrieved from: http://oig.hhs.gov/compliance/provider-compliance-training/files/OperatinganEffectiveComplianceProgramFinalBR508.pdf

US Department of Health and Human Services: Office of the Inspector General. (August 7, 2012). Focus on Compliance: The Next Generation of Corporate Integrity Agreements. Retrieved from: http://oig.hhs.gov/compliance/corporate-integrity-agreements/resources.asp

STOP Medicare Fraud: US Department of Health and Human Services and the US Department of Justice. (February 13, 2013). New Tools to Fight Fraud, Strengthen Federal and Private Health Programs, and Protect Consumer and Taxpayer Dollars: Recent Initiatives Help the Government Fight Fraud, Strengthen Health Insurance Programs, and Protect Consumer and Taxpayer Dollars. Retrieved from:
http://www.stopmedicarefraud.gov/newsroom/factsheets/medicare-fraud.html

US Department of Health and Human Services: Office of the Inspector General. Health Care Fraud Prevention and Enforcement Action Team Provider Compliance training. Retrieved from: http://oig.hhs.gov/compliance/provider-compliance-training/index.asp

The National Health Care Anti-Fraud Association (June 2009). Fighting Health Care Fraud: An Integral Part of Health Care Reform. Retrieved from: http://www.nhcaa.org/media/5997/fighting_health_care_fraud_nhcaajune2009.pdf Department of Justice Press Release. (May 14, 2013). Medicare Fraud Strike Force Charges 89 Individuals for Approximately $223 Million in False Billing. Retrieved from: http://www.hhs.gov/news/press/2013pres/05/20130514a.html