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Prior Office of Inspector General (OIG) audits found hospitals did not fully comply with Medicare requirements for inpatient claims paid with certain Medicare Severity Diagnosis-Related Groups (MS-DRGs) that required enrollees to have received 96 or more consecutive hours (i.e., 4 days or more) of mechanical ventilation.  As a follow up to this previous audit, the OIG’s objective was to determine whether Medicare payments to hospitals for inpatient claims with certain MS-DRGs requiring more than 96 consecutive hours of mechanical ventilation complied with Medicare requirements.

• The OIG found that Medicare improperly paid hospitals an estimated $79 million for enrollees who received mechanical ventilation according to the 2024 OIG report. 
• Hospitals attributed the improper billing to incorrectly counting the hours that enrollees had received mechanical ventilation or clerical errors in selecting procedure or diagnosis codes.

CMS has been directed to recover these overpayments which could have been prevented 

by performing prebilling audits of high-risk error claims to prevent overpayments.

Open Payments - Congress enacted the Sunshine Act to make drug and devices companies' involvement with doctors more transparent. Doctors often work with drug and device companies to improve the quality of patient care through research and education. These relationships encourage new ideas and treatments and also help doctors keep up to date on the newest drugs and devices. The Sunshine Act created a government-run website, called "Open Payments" that lists payments made to physicians by drug and device companies. 

Open Payments is a federally mandated program that collects and publishes information about payments that reporting entities make to covered recipients. The Open Payments database is publicly accessible.  Patients can access the Open Payments website to search to see if their doctors have any relationship with drug or device companies.  This gives patients an opportunity to discuss the relationship with their provider.

Originally enacted in 2013, the policies governing Open Payments continue to evolve. The final rule is updated occasionally through official rule making. CMS and the OIG may audit applicable organizations for compliance.  Records documentation must be maintained for at least 5 years from the date the payment or other transfer of value, or ownership or investment interest is published publicly on the Web site.

§ 403.912 Penalties for failure to report - If your organization is required, but fails to report, civil monetary penalties (CMPs) can be imposed. According to §403.912 “Any applicable manufacturer or applicable group purchasing organization that fails to timely, accurately or completely report the information required in accordance with the rules established under this subpart is subject to a civil monetary penalty of not less than $1,000, but not more than $10,000, as adjusted annually under 45 CFR part 102 for each payment or other transfer of value or ownership or investment interest not reported timely, accurately, or completely.”

• For more information - Click Here for the CMS FAQ on Open Payments Data
• Free Education - Watch the CMS video “Open Payments Natures of Payment” to learn more

All insurance carriers, not just the Federal healthcare programs, are focused on reducing Fraud, Waste and Abuse. Both the Centers for Medicare and Medicaid Services (CMS) and the Office of Inspector General (OIG) focus on the accuracy of claims your organization files for reimbursement.

Revenue cycle management (RCM) is also called Accounts Receivable (A/R) management, a complex process which is often underestimated.  An important, critical function is striving for efficiency by implementing prevention strategies, compliance training of the medical billing workforce, providing feedback to providers regarding why claims are denied, conducting comprehensive data analysis using advanced analytics tools, conducting billing audits.

The Federal Bureau of Investigation (FBI) is the primary agency for investigating health care fraud for both federal and private insurance programs.  The FBI investigates these crimes in partnership with Federal, state, and local agencies; Healthcare Fraud Prevention Partnership; Insurance groups such as the National Health Care Anti-Fraud Association, the National Insurance Crime Bureau, and insurance investigative units.

Pre-and post-billing audits can correct potential fraudulent claims through prevention or by quick identification and refunding overpayments through monitoring credit balance reports.  According to the FBI, examples of common types of health care fraud committed by medical providers are listed as:

• Double billing: Submitting multiple claims for the same service
• Phantom billing: Billing for a service visit or supplies the patient never received
• Unbundling: Submitting multiple bills for the same service
• Upcoding: Billing for a more expensive service than the patient actually received

Compliance Programs and Audits

• Implement a functioning, comprehensive compliance program with clear policies and procedures regarding billing practices and patient care. The Revenue Cycle Manager should be heavily involved in this process.
  • Utilize data mining and predictive analytics to identify patterns and anomalies in billing data that may indicate fraudulent activity.
  • Monitor provider billing trends, including high-volume outliers, unusual coding patterns, and suspicious referral practices.
  • Implement claims scrubbing tools to identify and prevent invalid or improper billing codes.
• Conduct regular internal audits to assess compliance with policies and identify potential areas of risk. Auditors must be separate and apart from the billing process to provide objective audit results.
• Perform provider-specific risk assessments to identify high-risk providers for targeted audits.  Risk assessment is an item added to the OIG General Compliance Guidance as of November 2023.

Streamlining the compliance process may require advanced technology, such as Artificial Intelligence (AI) and machine learning to identify complex fraud patterns and to improve detection accuracy.  Ensure your Compliance Officer, Revenue Cycle Manager and those auditing for compliance have more than on-the-job training.  Consider training from a Licensing/Certification partner with CMS, such as the American Institute of Healthcare Compliance.