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  • 1/28/2014


    Fraud, Waste, and Abuse Panel

    February 9, 2014

    HCCA Managed Care Compliance Conference

    Today’s Panel Discussion

    Summary of FWA requirements as part of an

    effective compliance program Jose Tabuena

    Current trends and applicable takeaways in today’s

    FWA environment Adam Rattner

    Applying culture change principles and a

    proactive approach to FWA prevention through

    Medicaid contract compliance

    Jack Bevilacqua

  • 1/28/2014


    Summary of FWA Requirements as

    part of a Compliance Program

    Jose Tabuena, Concentra | Humana Inc.

    Know Your History

    Office of Inspector General, US Department of Health and Human Services

    • Compliance Guidance – Compliance Program Guidance for Medicare+Choice Organizations (1999)

    – Link:

    Centers for Medicare and Medicaid Services – Medicare Prescription Drug, Improvement, and Modernization Act (2003)

    o Guidance for Part D (Chapter 9) included the FWA component as part of a plan sponsors overall compliance plan | program requirements (2006)

    o FWA program could be separate and in addition to compliance program, or integrated

    – Medicare Managed Care Manual (Chapter 21, Pub. 100-16) and Prescription

    Drug Benefit Manual (Chapter 9, Pub. 100-18): These guidelines are identical and allow organizations offering both Medicare Advantage (MA) and

    Prescription Drug Plans (PDP) to reference one document for guidance (Revised 01-11-2013)

    – Link:


  • 1/28/2014


    Chapter 21 and 9 Compliance Program Guidelines

    Section in Guidelines Element of an Effective Compliance Program

    50.1 Written Policies, Procedures, and Standards of Conduct

    50.2 Compliance Officer, Compliance Committee, and High Level Oversight

    50.3 Effective Training and Education (50.3.2 – FWA Training)

    50.4 Effective Lines of Communication

    50.5 Well Publicized Disciplinary Guidelines


    Effective System for Routine Monitoring, Auditing and Identification of

    Compliance Risks (50.6.9 – Use of Data Analysis for FWA Prevention

    and Detection; 50.6.10 – Special Investigation Units (SIUs)


    Procedures and System for Prompt Response to Compliance Issues

    (50.7.3 – Procedures for Self-Reporting Potential FWA and Significant

    Non-Compliance; 50.7.6 – Responding to CMS-Issued Fraud Alerts)

    Each sponsor must implement an effective compliance program that

    meets the regulatory requirements set forth in Chapter 42, Parts 422 and

    423 of the Code of Federal Regulations.

    Definitions – In the Compliance Program Guidelines

    • Fraud – “Is knowingly and willfully executing or attempting to execute, a scheme or

    artifice to defraud any health care benefit program or to obtain (by means of

    false or fraudulent pretenses, representations, or promises) any of the

    money or property owned by, or under the custody or control of, any health

    care benefit program. 18 U.S.C. § 1347.”

    – Fraud is a deliberate misrepresentation or deception intended to result in

    financial gain. It is a criminal act.

    • Abuse – “Includes actions that may, directly or indirectly, result in: unnecessary costs

    to the Medicare Program, improper payment, payment for services that fail to

    meet professionally recognized standards of care, or services that are

    medically unnecessary. Abuse involves payment for items or services where

    there is no legal entitlement to that payment and the provider has not

    knowingly and/or intentionally misrepresented facts to obtain payment.”

    – Abuse includes actions similar to fraud but not proven to be criminal.

    FWA means fraud, waste and abuse.

  • 1/28/2014


    FWA Definitions, continued

    • Fraud versus Abuse

    – “Abuse cannot be differentiated categorically from fraud, because the

    distinction between ‘fraud’ and ‘abuse’ depends on specific facts and

    circumstances, intent and prior knowledge, and available evidence, among

    other factors.”

    • Waste

    – “Is the overutilization of services, or other practices that, directly or indirectly,

    result in unnecessary costs to the Medicare program. Waste is generally not

    considered to be caused by criminally negligent actions but rather the

    misuse of resources.”

    FWA means fraud, waste and abuse.

    Chapter 21 and 9 Guidelines – Evolving Thoughts

    • “It is worth noting that for many Sponsors, traditional fraud, waste, and

    abuse programs have been aimed at the conduct of third parties…”

    • “. . . whereas their compliance programs typically encompass the

    organization’s efforts to monitor itself and its subcontractors with respect

    to contract regulations and compliance with applicable laws and


    • “CMS believes that, under this requirement, Sponsors must have

    policies in place to identify and address fraud, waste and abuse at both

    the Sponsor and third-party levels . . .”

    “Specifically, the chapter provides recommendations and requirements

    for Sponsors to implement a program to control fraud, waste, and abuse

    as part of an effective Part D compliance program.”

  • 1/28/2014


    Two Perspectives

    • Compliance – Risk of Non-compliance and Misconduct (including fraud)

    by the organization.

    – For most compliance program activities, the audience is primarily internal

    and draws more on education and protecting the organization from legal

    actions brought by others.

    • Fraud Control – Risk of External Fraud against the Organization

    – For most antifraud activities, the target audience is primarily external and

    draws heavily from data mining, investigations, law enforcement, and legal

    actions initiated by the organization.

    Compliance and Fraud control programs should not be looked at in a “silo”

    Ethics and Compliance


    Antifraud Program &

    Controls Code of Conduct

    Whistleblower Helpline

    Hiring and Promotion Standards

    Oversight – BOD & AC

    Incentives & Discipline

    Evaluate Effectiveness


    Training & Education


    Enterprise Risk Assessments

    Auditing and Monitoring

    Technology & Metrics

    Compliance Policies

    and Procedures

    Compliance & Ethics


    Internal Misconduct


    Risk Assessment

    To Detect




    Antifraud Policies

    and Procedures

    Fraud Awareness Training

    External Fraud

    Fraud Risk Assessment

    To Detect Criminal Conduct

    Fraud Detection

    Data Analysis

    Compliance and FWA leverage many of the same principles

  • 1/28/2014


    Compliance and Antifraud Programs leverage many of the same technologies

    For many companies, technology to support the Compliance and Antifraud

    Programs can be implemented primarily using software solutions with

    existing footprints in their application architectures


    Program Activity Functionality



    Whistleblower/compliance hotline; employee training and tracking; supporting and documenting

    background checks; data analytics; electronic data recovery and preservation.

    Risk Assessment

    Identifying and documenting compliance and fraud risks and the related controls; identifying and

    documenting related policies, procedures and system protocols; template test plans for relevant

    controls, issue documentation and tracking; documenting results of control testing; reporting.

    Control Activities System and process related security and controls; manage user access and segregation of

    duties; automated monitoring tools.

    Information and


    E-Learning system to managing content and provide online training; documentation on who has

    completed training and when.


    Monitoring changes in the parameters in control configuration tables; monitoring who has

    accessed transactions, financial system modules, and content; analyzing transactions for

    anomalies; journal entry testing; monitoring manual processes;.

    Compliance versus FWA Risk

    • Do fraud specialists | SIU and internal auditors have a common interest

    with compliance and ethics professionals?

    • Could compliance officers enhance compliance by working more closely

    with their organization’s antifraud professionals?

    • Is there an effective way to integrate the required infrastructures?

    Compliance and Fraud control programs should not be looked at in a “silo”

  • 1/28/2014


    A look at Antifraud Program Controls

    1. Reactive strategies, proactive scanning, and prevention within

    functional scopes of responsibilities

    2. Utilizin


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