Fraud, waste, and abuse related to referral schemes remains prevalent in the news with record claim volumes and dollars impacting the bottom line of health plans and health agencies. Fraud alerts from the Office of Inspector General-Health and Humas Services (OIG-HHS) to physicians regarding Durable Medical Equipment (DME) fraud and the physician’s responsibilities related to the Certificates of Medical Necessity have been issued for more than two decades; however, bad actors continue to exploit system weaknesses and participate in fraudulent practices. Unfortunately, some of these bad actors are the same physicians and medical professionals entrusted with improving the well-being and health of their patients as well as safeguarding health plan dollars by providing or ordering medically necessary services.
Prior to the pandemic, the OIG-HHS identified and prosecuted dozens of individuals associated with telehealth and DME companies along with numerous medical professionals for one health care scheme totaling $1.2 billion in losses. The Department of Justice (DOJ) obtained guilty pleas in September 2023 from two national telemedicine companies related to a $44 million dollar fraud scheme involving telemarketing along with medically unnecessary DME and genetic testing. In late November 2023, a telemedicine nurse practitioner plead guilty to a telemedicine scheme involving medically unnecessary DME.
As part of their measures to address telemedicine and DME fraud, the OIG-HHS issued a special alert in July 2022 advising practitioners to exercise caution when entering an arrangement with purported telemedicine companies. Two months after that alert, the OIG-HHS published a report that identified seven measures to identify fraud, waste, and abuse in telehealth services, one of which was to look for billing for a telehealth service and ordering medical equipment for a high proportion of beneficiaries.
While numerous headlines point to long-term investigations and eventual convictions related to referral schemes, this type of fraud, waste, and abuse is not novel. However, the early discovery and detection of provider referral networks and collusive claims traffic can help health plans and health agencies investigate and mitigate long-term losses using pre-pay as well as civil or criminal actions, as warranted.
What are several signals within your claims data that may point to providers associated with a DME referral scheme?
- Medical practitioners with outlier telehealth modifier utilization compared to their peers
- Utilization of DME codes not within the providers prior billing profile
- Regional DME providers with higher units of service compared to their peers
- Higher frequency of billing common DME products per patient
- Higher paid per patient values by Healthcare Common Procedure Coding System (HCPCS) code compared to all DME peers
- Recent peaks or increasing trends for DME code utilization from new providers
- Patient sharing across similar practices or related businesses
- High concentration of DME referrals from a small group of medical practitioners
Additional signals may be available within your data depending on the depth of provider, member, and claims detail your plan or agency provides your data mining, FWA analytics or artificial intelligence vendors. In addition to rules and pattern-based detection models, robust provider profiles, current claims and business intelligence, and data quality initiatives between your plan or agency and your vendors will improve the opportunities to identify providers with the claims traffic and relationship signals worthy of additional examination.
Based on the 8 signals above, how can Fraud Scope help your health plan or health agency identify providers with signals for potential referral schemes?
Fraud Scope’s pattern-based detection models, such as Outlier Abuse, Suspicious Trends, Time Behavior or Frequent Combinations, identify outlier utilization for rendering and billing providers. These and other detection models can help identify the following signals.
- Utilization of DME codes not within the providers prior billing profile
- Regional DME providers with higher units of service compared to their peers
- Higher frequency of billing common DME products per patient
- Higher paid per patient values by HCPCS code compared to all DME peers
- Recent peaks or increasing trends for DME code utilization from new providers
Fraud Scope’s Query Toolkit empowers users to explore healthcare intelligence at the line, claim, or aggregate levels, which allows them to define criteria specific to their assessment and identify the following signals.
- Medical practitioners with outlier telehealth modifier utilization compared to their peers
- Regional DME providers with higher units of service compared to their peers
- Higher paid per patient values by HCPCS code compared to all DME peers
Fraud Scope’s Provider Dashboard identifies new providers in your claim traffic, established providers with a lapse in claim traffic who recently submitted claims, and providers submitting a code that did not exist in their history. The three modes within the Provider Dashboard provide the users with claim volume intel and other intelligence to help identify the following signals.
- Utilization of DME codes not within the providers prior billing profile
- Recent peaks or increasing trends for DME code utilization from new providers
Fraud Scope’s Association Graph identifies claim relationships between providers by addresses or patients, and then displays provider identifiers, risk scores, and practice intelligence for the user to assess, which includes hyperlinks to all the shared claim data. The Fraud Scope Association Graph toolkit helps the user identify the following signals.
- Patient sharing across similar practices or related businesses
- High concentration of DME referrals from a small group of medical practitioners
References:
Department of Justice, Health and Human Services, Office of Inspector General
Large-scale tele-medicine and DME referral fraud – April 2019
Special Fraud Alert: OIG Alerts Practitioners To Exercise Caution When Entering Into Arrangements With Purported Telemedicine Companies – July 2022
https://oig.hhs.gov/documents/root/1045/sfa-telefraud.pdf
Medicare Telehealth Services During the First Year of the Pandemic: Program Integrity Risks – September 2022
https://oig.hhs.gov/oei/reports/OEI-02-20-00720.pdf
Owner of Telemedicine Companies Pleads Guilty to $44 Million Medicare Fraud Scheme – September 2023
Telemedicine Nurse Practitioner Pleads Guilty to $7.8 Million Durable Medical Equipment Fraud Scheme – November 2023
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