Sunday, October 30, 2016

What is Healthcare Fraud and abuse ?

 What Is Healthcare Fraud?

The 1199SEIU Benefit Funds define healthcare fraud as an intentional deception or misrepresentation that an individual knows to be false, or that could knowingly result in some unauthorized benefit to that individual or another person.

The most common kind of fraud involves a false statement or misrepresentation made in order to take advantage of 1199SEIU Benefit Funds’ benefits. The violator may be a healthcare provider, an employee of a medical provider, a beneficiary or some other person or business entity.

Examples of fraud include:

• Billing for services and supplies that were not provided;

• Misrepresenting the diagnosis for a patient to justify the services or equipment furnished;

• Altering claim forms to obtain a higher payment amount;

• Unbundling (exploding) charges or upcoding; or

• Participating in schemes that involve collusion between a provider and a beneficiary or between a supplier and a provider, which result in higher costs or charges to the 1199SEIU Benefit Funds.

Examples of Medicaid fraud are:

** Billing for Services Not Rendered: A provider bills Medicaid for a treatment or procedure that was not actually performed (e.g., laboratory tests or x-rays that were not taken, full dentures were prior authorized and billed for when a partial denture was actually supplied).

** Billing Without Reporting Other Resources: A provider bills Medicaid the full charge for a service without reporting the amount billed and received from another source (e.g., a private insurance company) or charging the patient for the service or a copay for a covered benefit.

** Billing for a Brand Name Drug Not Dispensed: A pharmacy bills Medicaid for a brand name drug when a generic substitute (at a lower cost) was actually dispensed to the beneficiary.

** Billing for Unnecessary Services: A provider misrepresents the diagnosis and symptoms on a beneficiary's record in order to provide and bill for unnecessary tests and procedures.

** Billing a DOS Other Than the Actual Date the Service was Rendered: A provider indicates a DOS other than the actual DOS that was during a time of beneficiary ineligibility or service noncoverage.

** Receiving Kickbacks: An ancillary provider (e.g., physical therapist, laboratory, pharmacy) may agree to pay a physician, nursing facility, or hospital administrator or owner a portion of his Medicaid reimbursement for services rendered to the physician's patient or a beneficiary residing in the facility. Payments to a physician or facility administrator or owner may be a cash payment, a vacation trip, a leased vehicle, inflated rental for space, etc. Often a kickback arrangement results in
unnecessary tests or services being provided to the beneficiary in order to generate additional reimbursement.

** Fraudulent Cost Reports: A nursing facility or hospital including nonallowable costs or false information (e.g., understate patient census days) or including nonpatient care expenses (e.g., landscaping, interior design, or remodeling at the
administrator's or owner's personal residence) in its cost report to justify a higher per diem or reimbursement rate from Medicaid.

** Social Welfare Act (MCLA 400.111d): A conviction may result in a denial, suspension, or termination of the provider's license or similar action from Medicaid.

** Public Health Code (MCLA 333.16226): A conviction may result in a fine or probation from Medicaid or the denial,suspension, or revocation of a provider's license.

MDHHS encourages provider assistance in reducing and reporting provider fraud and abuse in Medicaid and violation of HIPAA Privacy regulations. Any provider or employee suspecting that a fraudulent activity is occurring should contact the Michigan Department of Attorney General. (Refer to the Directory Appendix for contact information.)

 What Is Healthcare Abuse?

The 1199SEIU Benefit Funds define healthcare abuse as actions that are inconsistent with sound medical, business or fiscal practices. Abuse directly or indirectly results in higher costs to the 1199SEIU Benefit Funds through improper payments for treatments that are not medically necessary.

Common examples of abuse include:

• Performance of medically unnecessary services;

• Failure to document medical records adequately;

• Intentional, inappropriate billing practices such as misuse of modifiers; or

• Failure to comply with a participation agreement.


Under federal law, the Department of Attorney General, Health Care Fraud Division (Medicaid Fraud Control Unit) is mandated to investigate and prosecute instances of patient abuse occurring in any Michigan facility receiving Medicaid funds.

Examples of patient abuse are:

** Physical abuse, involving assaulting, striking, or sexually abusing a patient.

** Threat or perceived threat of physical or sexual abuse.

** Neglect resulting from inadequate medical or custodial care or other situations that create health risks to the patient.

** Financial abuse, including misappropriation of patient’s personal funds, comingling of patient and facility funds.

** Use of patient funds to pay for facility operations, or theft of patient’s property.

The above examples are not all inclusive.

Complaints involving suspected abuse of patients within any Michigan facility receiving Medicaid funds should be reported to the Michigan Department of Attorney General's 24-hour toll-free hotline.

Complaints may also be mailed to the Attorney General's Medicaid Fraud Unit. (Refer to the Directory Appendix for contact information.)

Pursuant to Section 111b of the Social Welfare Act of 1939 (PA 280, as amended, MCLA 400.111b[7]), a provider is required to make available, to authorized agents of the Department of Attorney General, any record required that must be maintained as a condition of participation in Medicaid.

The Michigan Department of Attorney General is also empowered to investigate and prosecute any complaint involving patient abuse by a provider that receives Medicaid funds. It does not matter whether or not the abused patient is receiving Medicaid benefits. (Patient abuse is defined as harm or threat of harm to a patient's health or welfare by a person responsible for the patient's health or welfare that occurs through nonaccidental physical or mental injury, sexual abuse, or maltreatment.)


A provider can contact the local MDHHS office in the beneficiary's county of residence to report beneficiary fraud, or contact the Office of Inspector General’s Recipient Fraud Unit Hotline. (Refer to the Directory Appendix for contact information.)

The provider can also report beneficiary over-utilization of services by contacting the local MDHHS worker or the Benefits Monitoring Program. (Refer to the Directory Appendix for contact information.)

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