Healthcare Services

IROs and Healthcare Fraud Investigations: An Ounce of Prevention is Worth a Pound of Cure

IROs and Healthcare Fraud Investigations: An Ounce of Prevention is Worth a Pound of Cure

By Jim Bobeck

The scrutiny grows

Think federal OIG investigations won’t affect your healthcare company? Think again. Google any variation of OIG investigations, Medicare settlements, fraud, or company penalties. Investigations are now more prominent and certainly more publically searchable. With sequestration hitting many providers hard, companies are more determined than ever to maximize payment for their services. That same determination can lead to bad billing practices, and in some cases outright fraud.

In FY 2016, investigations conducted by HHS’ OIG resulted in 765 criminal actions that engaged in crimes related to Medicare and Medicaid, and 690 civil actions, which include false claims and unjust-enrichment lawsuits filed in federal district court, civil monetary penalties (CMP) settlements, and administrative recoveries related to provider self-disclosure matters.

You’re either a current target or just a few data points away

How does the OIG select their investigation targets? There’s certainly nothing random about it. The OIG will find its targets through a team of contractors, fraud investigators, and, most importantly, data mining and analytics. There are certain groups and providers that will inevitably stick out like sore thumbs.

As with any investigation, settlement is always an option, which is where the IRO usually comes into play. While there are many types of IROs that can range from accounting to compliance reviews, the healthcare IRO is a necessary step of any settlement agreement. With the healthcare IRO, your medical and billing records get scrubbed for accuracy. Although the OIG doesn’t select the IRO, it can maintain an active claims and billing review on a provider to determine whether a settling party has made improvements. Just as important, it provides the settling party with an independent check on its performance.

Don’t wait for the investigation

With many companies relying upon Medicare and Medicaid funding to financially ensure viability, the quest to “thrive” has reach a fevered pitch. The catch is that you need to match it with clear regulatory compliance and independently verified billing claims’ processes.

However, you don’t need to wait for the investigation. The process an IRO uses to review claims for overbilling or fraud doesn’t change very much whether occurring before or after an investigation. What does change is the time, expense, and the negative press you incur for waiting until you are sued.

By engaging in prevention, you can better identify trends, correct minor problems before they become big ones, and save yourself time, money, and severe penalties. In the worst case scenario, you will find overbilling that triggers a self-reporting to the OIG. However, self-disclosure gives providers the opportunity to avoid the costs and disruptions associated with a government-directed investigation and civil or administrative litigation.

In short, you cannot afford to not use an IRO to review claims and billings. A cost-effective review more than pays for itself through savings and peace of mind. For your business to thrive, you need an IRO to keep it in check.