Case managers are under increasing fire to reduce utilization. Overutilization, as a form of fraud and abuse has been at the forefront of managers’ thinking because of the extraordinary emphasis placed upon this issue by many regulators and enforcers. Now is the time for case managers to focus greater attention on underutilization of services as a form of fraud and abuse.
A federal statute called the False Claims Act has historically served as the basis for fraud enforcement in the area of overutilizaton. That is, enforcers have taken the position that whenever providers send claims to the government in order to receive payment, they promise that the care they provided was reasonable, necessary, and appropriate. If regulators determine that care provided did not meet these criteria, the claims are “false claims” even though everything written on the claim form is true.
Practitioners may, for example, be ordered by a patient’s physician to apply betadine to the patient’s pressure ulcer. Providers know that the application of betadine is no longer considered to be consistent with current standards of care. Nonetheless, field staff visit the patient and follow the physician’s orders. When the provider submits a claim for payment, everything written on the claim form is true. The physician ordered the application of betadine and staff followed the physicians’ orders. The claim, however, is still a false claim because the care that was provided was not reasonable, necessary, and appropriate since it was inconsistent with applicable standards of care.
Likewise, fraud enforcers have taken the position that providers are required to provide reasonable, necessary, and appropriate care. When they fail to do so, especially in order to save money, they are engaging in fraud in the form of underutilization.
While providers are focused on overutilization, managed care organizations that contract to provide care to Medicaid and Medicare beneficiaries are very familiar with false claims in the form of underutilization. Specifically, these so-called “Medicaid and Medicare HMO’s” are required, at a minimum, to provide the same benefits that recipients and beneficiaries would receive if they remained in fee-for-service Programs in exchange for a flat monthly fee per beneficiary. In view of these circumstances it is clear that HMO’s can save money if they do not provide services.
Providers have experienced underutilization by HMO’s. Staff have taken note of instances in which Medicaid and Medicare patients were receiving a variety of services, none of which have been denied.
Patients who decide to enroll in an HMO may see a precipitous drop in authorizations for payment by the HMO despite the fact that fee-for-service programs did not deny any of the services that the patient received prior to enrollment. In other words, on the day prior to enrollment patients received certain services. Services are reduced dramatically the next day even though there has been no change in the patient’s clinical condition that would justify such a reduction.
This is a “classic” example of underutilization by HMO’s. Providers should be attuned to this issue and may even wish to explain to staff of such HMO’s that this conduct may constitute fraud and abuse.
In addition, managers must recognize that the spotlight of underutilization will be turned squarely upon providers. Regulators tend to see issues of underutilization in terms of “black and white,” as opposed to the nuances that always surround determinations about appropriate care.
This means that it is time for staff to devote attention to this area of fraud and abuse. Providers cannot either underutilize or overutilize services. Instead, they are required to be right down the middle, i.e. providing items that are reasonable and necessary for their patients.
Of course, the key difficulty with this requirement is that it is difficult, if not impossible, to articulate what is reasonable, necessary, and appropriate in terms of national standards of care. This means that such care is often in the “eye of the beholder,” i.e. the result of subjective determinations by a variety of regulators who may not agree with each other.
Nonetheless, case mangers must take a hard look at this complex issue. Consistent care to patients with the same clinical diagnosis undoubtedly help providers justify their stance that care provided was reasonable, necessary, and appropriate. A word to the wise will surely suffice.
Copyright, 2006.
Elizabeth E. Hogue, Esq.
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