Chapter 4: Evaluation Processes, Investigations, and Noncompliance Response

External Investigations

Medicare Fraud Strike Force Teams, utilizing the combined resources of federal, state, and local law enforcement entities, continue to investigate healthcare fraud, waste, and abuse at increasing levels. According to the U.S. Department of Health & Human Services Office of the Inspector General (OIG), in only three quarters of 2020, 2,386 criminal actions were launched and 3,075 indictments were rendered, resulting in $3.82 billion in investigative receivables.[4]

There is little doubt that Medicare fraud investigations will increase in the years ahead. In addition to what has been the “business as usual” types of cases, the government will now also be focusing on fraud, waste, and abuse arising out of fund distribution from the Paycheck Protection Program (PPP) and the CARES Act Provider Relief Funds (PRF). Billing fraud (such as hospital upcoding to COVID DRG codes), allegations of medical necessity related to COVID-19, telehealth, defective products (PPE, vaccines, tests), and products covered under the Defense Production Act will be added to the government’s review. Any false information included in PPP and PRF applications is considered a “false claim” under the False Claims Act. Similarly, any misuse of those funds will be investigated. For CARES Act research grants, any failure to comply with regulations and grant conditions, or the falsification of study data, will draw the attention of the Strike Force Teams.

Suspected fraud, waste, and abuse might arise from government audits, whistleblower claims (qui tam), unanticipated problems involving risk and adverse events, or care and quality-improvement audits. Regardless of what ignites an external audit, compliance professionals have the responsibility to lead an organization’s preparation, starting with the proactive work of implementing and sustaining an effective compliance program. The elements of such a program are focused on preventing the issues that may lead to an external investigation; however, the ability to demonstrate that safeguards and practices were in place can help to mitigate the impact of an investigation. We will discuss those preventive steps in this article.

In responding to an external audit, compliance professionals are key in preparing their health systems, hospitals, community health clinics, or other healthcare organizations. Whether responding to a subpoena, preparing a team to respond to government requests, securing electronic and other information records, preparing others in the organization, or preparing the organization for a corporate integrity agreement (CIA), integrity agreement (IA), systems improvement agreement (SIA) (a contract between a healthcare provider and CMS to assist in compliance with the conditions of participation in federal healthcare programs), or other settlement action, the organization’s success in coming out the other side of an investigation can be significantly impacted by the tone and leadership provided by the compliance team. If not managed well, the harm to an organization’s reputation and financial standing could significantly hinder its ability to continue to provide essential services to the community. In some cases, such a loss could be devasting beyond the economic impact on the organization.

This article provides guidance in preventing, responding to, and mitigating the impact of external investigations.

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