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 Chief Fraud Fighter Talks Nursing Homes, Compliance, And ZPICs

​Peter Budetti, MD, director of the Centers for Medicare & Medicaid Services’ (CMS’) Center for Program Integrity, answers some questions from Managing Editor Meg LaPorte regarding the agency’s efforts to combat fraud, waste, and abuse in the nursing home setting and what providers should do to prevent audits.

The interview is part of Provider’s May cover story that examines how auditors are utilizing unorthodox tactics to ferret out fraud. Read it here: Fraud-Fighters-Mine-Data.aspx


Q: CMS is utilizing predictive modeling to root out potential fraud perpetrators. Could you please describe how, specifically, it is used in the investigation of nursing facilities?

A: Predictive analytics are now being used with the CMS Fraud Prevention System (FPS) to review all Medicare Part A, Part B, and durable medical equipment claims prior to payment, including those for skilled nursing facilities (SNFs). For the first time, CMS has a real-time view of fee-for-service claims across claim types and the geographic zones of its Medicare claims processing contractors. CMS can now more easily identify fraudulent nursing facility providers by detecting suspect patterns and aberrancies. The FPS prioritizes leads in real time for the Zone Program Integrity Contractors (ZPICs), who then investigate suspect providers and suppliers and work with CMS to take appropriate administrative actions, including revocation of billing privileges, suspension of potentially fraudulent payments, and referrals to our partners at the Office of Inspector General and the Department of Justice.

Q: What is the most important thing nursing home providers can do now to prevent investigations and/or audits, especially for those providers that may look like outliers due to the fact that they specialize in a certain type of rehabilitation or other therapy?

A: The most important advice to any provider is to provide only those services that are medically necessary and appropriate for their patients, and to follow the rules for billing for those services that are detailed in payment policy and provided by the Medicare Administrative Contractors. The primary purpose should not be to avoid audits or oversight by CMS, but to adhere to the rules and instructions for billing. Make sure all the fields in the required forms are completed properly, all the required documentation is provided, there are no omissions, and the billed services accurately reflect what was provided.

Second, providers should know the policies that underpin the provision of services and the subsequent billing and payment for those services. If they do not know these policies, they should know where to go to get clarification. CMS is transparent in explaining our policies to the provider community. Facilities that have specialized populations or services should provide services to those patients within the scope of the rules and regulations for that care. The prospective payment policies for SNF care account for differences in patient populations. Again, submit complete bills that reflect actual service delivered. 

Third, from a fraud, waste, and abuse perspective, it’s not just billing amounts that cause audits. Our work looks at many different circumstances and different aspects of provider behavior. However, as to specifics, we adhere to the same principles as the Internal Revenue Service in not publicizing the thresholds for what triggers an audit. It would be inappropriate to divulge that kind of information as certain providers could tailor their behavior in an attempt to evade additional scrutiny and could pursue fraud, waste, and abuse schemes designed to avoid certain CMS audit triggers.

Q: Since ZPICs seem to be targeting overbilling of ultra-high Resource Utilization Groups (RUGs) by SNFs, could you please describe how CMS determines how a facility or company has placed too many patients in ultra-high RUGs?

A: As mentioned above, we look at different circumstances and different aspects of provider behavior. It’s more complicated than just dollar amounts, and we look at each situation independently, taking into account the individual circumstances of each in assessing the degree to which a facility has potentially overbilled ultra-high RUGs. ​​​​​

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