SHIBA and the Senior Medicare Patrol SMP Fraud

SHIBA and the Senior Medicare Patrol (SMP) Fraud prevention, detection and reporting 07 October 2020

SHIBA mission SHIBA provides free, unbiased information about health care coverage and access to help improve the lives of all Washington state residents. We cultivate community commitment through partnership, service and volunteering. SHIBA and the SMP 07 October 2020 2

Who’s affected? All of us! Medicare and Medicaid clients How? • Diminished quality of treatment • Less money for needed benefits Taxpayers How? • Billions of tax dollars wasted SHIBA and the SMP 07 October 2020 3

Senior Medicare Patrol From idea to national program Through public law 104 -208 (est. 1997) • Administration on Aging established 12 demonstration projects o To recruit & train retired professionals to detect & report potential error, fraud & abuse • • Today we have 54 SMP projects in all states, Wash. DC, Puerto Rico, Guam & U. S. Virgin Islands Washington state SHIBA program sponsors SMP in our state SHIBA and the SMP 07 October 2020 4

Three roles of SHIBA and SMP 1. Distribute fraud prevention and identification information SHIBA and the SMP 2. Assist clients in resolving issues & complaints 3. Refer suspected cases of fraud, waste & abuse to investigative entities 07 October 2020 5

Protect, detect, report Purpose of SHIBA’s fraud awareness program: • Educate clients/community (Protect) • Perform 1: 1 counseling (Detect) • Refer cases for investigation (Report) SHIBA and the SMP 07 October 2020 6

Little quiz • How much does Medicare pay in claims every year? Answer: Over $500 billion • Which state is #1 in losses due to Medicare and Medicaid fraud and abuse? Answer: Florida • #2, #3, #4 states? Answer: California, New York and Texas SHIBA and the SMP 07 October 2020 7

Medicare statistics • Total Medicare clients (beneficiaries) nationwide: 56 million • Total Medicare clients in WA state: 1. 1 million o 80 percent are over age 65 o 20 percent are under age 65 SHIBA and the SMP 07 October 2020 8

Identify theft is the door to Medicare fraud SHIBA and the SMP 07 October 2020 9

Identify theft § The number on your Medicare card is your Social Security Number § This number is as important to thieves as a credit card SHIBA and the SMP 07 October 2020 10

Guard your card! Think of your Medicare card as your health care credit card! = SHIBA and the SMP 07 October 2020 11

Guard your card! (cont. ) • • A woman was very excited to be retiring. She was 65 and received her Medicare ID card in the mail. She took a selfie smiling with the card. Then she posted it to social media. Luckily, an observant friend reminded her she’d just posted her social security number for the whole world to see! The woman promptly removed the photo! Remember – Guard your card!!! SHIBA and the SMP 07 October 2020 12

What can happen if you become a Medicare fraud victim • Stolen Medicare numbers can lead to false claims. • Medicare may note your file as a problem, and as a result: o Your benefits may stop o It’ll flag your Medicare number as a “Compromised Number” • A stolen Social Security Number can lead to theft of your banking information. SHIBA and the SMP 07 October 2020 13

New Medicare cards • Currently Medicare ID cards contain Social Security numbers (SSNs). • In 2015, Congress passed the Medicare Reauthorization Act. • This law requires removing SSNs from all Medicare ID cards by December 2019. • Starting April 2018, Medicare clients will receive a new Medicare card with a randomly generated Medicare Beneficiary Identifier (MBI) that won’t be tied to SSNs. SHIBA and the SMP 07 October 2020 14

New Medicare cards (cont. ) • • The purpose is to decrease identity theft. The new MBI will contain uppercase alphabetic and numeric characters. Every Medicare client will have their own unique MBI. Medicare will mail the new cards in phases over time. SHIBA and the SMP 07 October 2020 15

New Medicare cards (cont. ) • • The transition to the new cards is expected to end Dec. 31, 2019. Medicare clients can continue to use their existing Medicare card until they receive their new card. SHIBA and the SMP 07 October 2020 16

New Medicare cards - Outreach • Medicare’s started it outreach campaign to educate Medicare clients about the upcoming change. • Medicare & You 2018 books feature information about the transition to the MBI. • Medicare & the Senior Medicare Patrol will educate clients about the possible fraud related to the roll out of the new cards. • Medicare never contacts you by phone or email to ask you for personal information or your Medicare number – they already have it! SHIBA and the SMP 07 October 2020 17

New Medicare cards – Scams on the rise • • • Scams are already occurring that relate to the roll out of the new Medicare cards. Scammers call clients and ask for their banking or credit card information to pay for the new Medicare card. They ask clients to confirm their current Medicare card number and steal their Social Security number. SHIBA and the SMP 07 October 2020 18

Medicare fraud schemes SHIBA and the SMP 07 October 2020 19

Every Medicare benefit can be a potential fraud area • • • Ambulance services Clinical lab/independent physiology labs Durable Medical Equipment (DME) suppliers Home health agencies Hospice care Hospital services Medicare Advantage/Managed care plans Medicare prescription drug plans Mental health services Nursing facilities Physician/practitioner services SHIBA and the SMP 07 October 2020 20

Who commits Medicare fraud & abuse? • People or providers who bill Medicare OR benefit from Medicare getting billed • Doctors and health care providers • Durable Medical Equipment (DME suppliers) • Employees of doctors or suppliers • Home health agencies, hospice • Medicare clients SHIBA and the SMP 07 October 2020 21

Examples of fraud • Altering claim forms to get a higher payment amount (called “upcoding”) o Example: Flu shot billed as a Shingles shot • • Billing twice for same service or item Billing separately for services that should be included in a single service fee (“unbundling”) o Example: Comprehensive blood panel billed as individual tests • Billing for services not rendered or supplies not provided SHIBA and the SMP 07 October 2020 22

Fraud example: False diagnoses • A Palm Beach, Florida doctor partnered with another doctor in a kickback scheme. • The Palm Beach doctor falsely diagnosed benign freckles, warts and irritated skin as cancer. • From 2008 to 2014, the doctor sent over 35, 000 Medicare biopsy specimens to a pathologist. • The pathologist would then receive kickbacks/payments from the doctor false readings. SHIBA and the SMP 07 October 2020 23

Fraud example: False diagnoses (cont. ) • • The doctor allegedly charged $18 million in false claims to Medicare. The federal government is working to recover the money, but acknowledges it will likely only recover about $5. 2 million The doctor’s sprawling 12, 700 square foot oceanfront mansion is valued at $28 million. The feds can’t seize it under the laws that protect homesteads in Florida. SHIBA and the SMP 07 October 2020 24

Fraud example: A conviction LA doctor convicted of multi-million dollar Medicare fraud case: • • • Operated a health and beauty clinic Performed radiofrequency laser and liposuction Stole Medicare numbers from patients Got Medicare numbers from others via recruiters Submitted fraudulent claims for: o Revascularization o Ablation of a bone tumor o Placement of radiotherapy catheter in breast SHIBA and the SMP 07 October 2020 25

Fraud example: Pharmacy fraudsters • In a family operation, an adult son, his mom and all his aunts are all licensed pharmacy technicians. • • They ran 8 small pharmacies in Miami, FLA that served as fronts for fraudulent activities. The son paid patients and recruiters to gain access to Medicare ID numbers and then billed Medicare for medications never dispensed. SHIBA and the SMP 07 October 2020 26

Fraud example: Pharmacy fraudsters (cont. ) • The son pleaded guilty to conspiracy to commit health care fraud. • • The Justice Dept. snared him and his family as part of nationwide crackdown on Medicare and Medicaid fraud. The Justice Dept. charged 243 people with $712 million in false billings. The family scammed Medicare for $21 million. He alone was responsible for $5. 5 million worth of fraud. SHIBA and the SMP 07 October 2020 27

Fraud example: Pharmacy fraudsters (cont. ) Attempting to launder the proceeds and hide money from the authorities, the 24 -year old son purchased: • • • A Rolls Royce Ghost A Bentley A Range Rover A Mercedes Benz S 63 AMG, 2 other luxury cars and more than a dozen trucks Two homes, $100, 000 in jewelry, and charged over $2 million on credit cards SHIBA and the SMP 07 October 2020 28

Fraud example: Louisiana conviction • • • Two people owned psychological service companies. The companies contracted with nursing homes in Louisiana, Mississippi, Florida and Alabama. From 2009 -2015, the companies billed Medicare more than $25 million for services it didn’t perform or need. Medicare paid more than $13. 5 million on the fraudulent claims. One scammer will forfeit their home and at least $525, 000 in seized currency. They have an $8. 9 million judgment against them. SHIBA and the SMP 07 October 2020 29

Fraud example: Large insurers United. Health Group is accused of allowing its subsidiaries and other insurers to improperly overcharge Medicare by “hundreds of millions – and likely billions – of dollars” according to a lawsuit made public at the Justice Department’s request. The whistleblower, a former well-placed official at United. Health Group, claims big insurers have been bilking Medicare Advantage for years, reaping billions of taxpayer dollars by gaming the payment system. SHIBA and the SMP 07 October 2020 30

Fraud example: Large insurers (cont. ) • The Justice Department takes the claims so seriously, it intends to sue United. Health Group. • Whistleblower revealed finance directors, like himself, monitored projects designed to make patients look sicker than they really were. • To receive higher reimbursements, they scoured online patient health records and adjusted the diagnosis codes. • The sicker the patient, the more the Medicare Advantage program paid United. Health Group. SHIBA and the SMP 07 October 2020 31

Compromised Medicare number It happened to her SHIBA and the SMP • Someone used her Medicare number to submit fraudulent claims for a wheelchair • Medicare paid the claims to the fraudster • When she really needed a wheelchair, Medicare denied her legitimate claim 07 October 2020 32

Fraud example: Durable Medical Equipment (DME) • A woman, who helped manage a home for seniors, attended a health fair with her residents. • She noticed some of her residents and others at a table giving the representative their Medicare ID numbers and other personal information for a free wellness item. • About a week later, a large truck showed up at the senior home at night to deliver over a dozen motorized wheel chairs that her residents never ordered. SHIBA and the SMP 07 October 2020 33

Fraud example: DME (cont. ) • She contacted the authorities and eventually the FBI was notified. • The FBI set up a sting. • Undercover agents filmed the fraudsters at another health fair doing the same thing and then subsequently delivering the motorized chairs. • The FBI arrested the individuals and they were prosecuted for fraud. SHIBA and the SMP 07 October 2020 34

Fraud example: DME (cont. ) The DME supplier: • Gained access to skilled nursing facilities, and boarding & care homes • 95% of his submitted claims were for power wheelchairs • Many clients never received the equipment or didn’t need it • Most of the Medicare numbers were provided by patient recruiters who received kickbacks SHIBA and the SMP 07 October 2020 35

Durable Medical Equipment (DME) Why DME? • Until recently: o No professional licensing requirements o Suppliers could set up shop with very little investment o Huge potential for quick profit SHIBA and the SMP Look for: • Unauthorized, unsolicited supplies sent to you or a family member 07 October 2020 36

DMEPOS aims to slow down DME fraud • Implemented in 2 WA state regions in 2013 • Requires competitive bidding and lower prices from equipment suppliers • Forces suppliers to have surety bonds and legit places of business • Reduces the number of suppliers SHIBA and the SMP 07 October 2020 37

Fraud and hospitals • Inpatient vs. outpatient status • Hospitals charge for a significant amount of line items • Typically you don’t get an itemized statement when you’re discharged • One hospital statement could involve multiple people generating a single patient’s bill • “Nearly 20% of claims have errors. ” -- American Medical Association SHIBA and the SMP 07 October 2020 38

Scam: Using homeless to fill hospital beds Picked up at downtown emergency drop-in center by fraudster Homeless Medicare client on Skid Row Transported to local hospital with questionable diagnosis Moved to skilled nursing facility; promised 90 days of housing paid by Medicare SHIBA and the SMP 07 October 2020 39

Fraud and lab services Why lab services? • • Doctors don’t see what’s billed to Medicare Labs aren’t required to submit diagnosis information to support the need for the services What to look for: • • SHIBA and the SMP Medically unnecessary services billed Providers “strongly urging” patients to go to a specific clinic Unbundling (e. g. , one blood panel listed by individual test) Tests not ordered, but performed and billed 07 October 2020 40

Fraud and pharmacies • Part D prescription drug program started in 2006 o $50+ billion dollar program • Most likely fraud cases: o Billing hundreds of Rx for a single client o Dispensing less than the prescribed amount of pills o Claims for brand name drugs but dispensing generics o Large amount of claims for refills, but never requested SHIBA and the SMP 07 October 2020 41

2013 CVS Caremark Corp. fraud investigation • Second largest drug store chain in the U. S. • Customers were surprised to find that CVS renewed their prescriptions and billed their insurance without their consent SHIBA and the SMP 07 October 2020 42

The Affordable Care Act (ACA) • • Adds ability for Dept. of Health & Human Services to disallow provider enrollment Implements a “smart, automated system” to proactively ID fraudulent claims o Fraud prevention system • Integrates Medicare and Medicaid • Partners with private insurers and MA plans • Increases law enforcement – Office of Inspector General SHIBA and the SMP 07 October 2020 43

Protect, detect, report • Educate clients (Protect) • Perform 1: 1 counseling (Detect) • Refer cases for investigation (Report) SHIBA and the SMP 07 October 2020 44

Protect • • • Treat your Medicare card • as your credit card or SSN card Don’t carry it with you until you need it for visits • to the doctor, clinic or pharmacy Never give your Medicare number to a stranger SHIBA and the SMP Record doctor visits, tests & procedures in a personal health care journal or calendar Save MSNs and Part D EOBs; shred when you no longer need it Remember: Medicare does NOT call or visit sell you anything. 07 October 2020 45

Detect • Review MSNs & Part D Explanation of Benefits (EOBs) for possible mistakes • Access my. Medicare. gov account SHIBA and the SMP • • Compare MSNs & EOBs to personal health care journal and Rx drug receipts to ensure they’re correct Look on billing statement for: o Charges for item/service you didn’t receive o Billing for same thing twice o Services your doctor didn’t order 07 October 2020 46

Report • • Ask questions Seek help Use written records Contact SHIBA • Collect evidence o o Marketing flyers Business cards MSNs Narratives Report fraud to SHIBA at: 1 -800 -562 -6900 SHIBA and the SMP 07 October 2020 47

Volunteer for SHIBA! Do you want to help explain health care benefits or options to: • • Friends? Neighbors? You community? Help people become better informed consumers? Become a volunteer! Call: 1 -800 -562 -6900 SHIBA and the SMP 07 October 2020 48

Need help with other insurance questions? The Office of the Insurance Commissioner can also help you with questions, information, and complaints about all types of insurance, such as: • Homeowner • Auto • Life • Annuities • Health • And more! Call our Insurance Consumer Hotline: 1 -800 -562 -6900 Visit us at: www. insurance. wa. gov SHIBA and the SMP Rev. 6/12/2017 07 October 2020 49