Copyright © 2008 Delmar Learning. All rights reserved. Chapter 5 Legal and Regulatory Issues

Copyright © 2008 Delmar Learning. All rights reserved.

Chapter 5

Legal and

Regulatory Issues


2

Guidelines and Regulations

• The health insurance specialist must know about the different guidelines and regulations for maintaining patient records and processing health insurance claims.


3

Regulations

• Federal laws and regulations affect health care in government programs like Medicare, Medicaid, TRICARE, and Federal Employees Health Benefit Plans.

• State laws regulate recordkeeping practices and provider licensing.


4

False Claims Act

• Regulated fraud associated with military contractors selling materials and gear to the Union Army.


5

False Claims Act

• Used by federal agencies– Regulates the behavior of any contractor

that submits claims for expense to the federal government for any program.


6

False Claims Act

• Amended in 1986– Increase in civil monetary penalties to

impose a maximum of $10,000 per false claim

– Plus three times the amount of damages that the government sustains


7

Federal Anti-Kickback Law

• Protects patients from fraud and neglect by curtailing the corrupting influence of money on health care choices.


8

Federal Anti-Kickback Law

• Violation of this law could result in: – Five years in prison– Fines up to $25,000– Administrative civil money penalties up to

$50,000– Exclusion from participation in federal

health care programs


9

Utilization Review Act

• Facilitated ongoing assessment and management of health care services

• Required hospitals to perform continued-stay reviews – To determine medical requirement and

appropriateness of Medicare and Medicaid inpatient hospitalizations


10

McKinney Act

• Provides health care to the homeless


11

Vaccines for Children Program

• Provides free immunizations to all children in low-income families


12

PATH

• Focus was on two issues: – Compliance with Medicare rules affecting

payment for physician services provided by residents

– If level of service was coded and billed properly


13

CCI

• Developed by CMS to trim down Medicare program expenditures by detecting out of place codes on claims and rejecting payment for them.


14

HIPAA

• Mandated administrative simplification regulations that govern privacy, security, and electronic transaction standards for health care information.


15

SCHIP

• Health insurance program for newborns, children, and youth – Covers health care services such as

physician visits, prescription medicines, and hospitalizations


16

Centers for Medicare and Medicaid Services

• Department of Health and Human Services (DHHS) responded to the nation's first bioterrorism attack– Delivery of anthrax through the mail


17

Medicare Prescription Drug, Improvement, and Modernization Act

• Provides Medicare recipients with prescription drug savings and additional health care plan choices


18

Medicare Prescription Drug, Improvement, and Modernization Act

• Requires Medicare trustees to analyze the combined fiscal status and warn Congress and the president when the fund exceeds 45 percent.


19

Health Insurance Portability and Accountability Act

• Improves portability and continuity of health insurance coverage in the group and individual markets

• Combats waste, fraud, and abuse

• Supports use of medical savings accounts


20

• Long-term care services and coverage

• Unique identifiers for providers, health plans, employers and individuals

Health Insurance Portability and Accountability Act


21


22

Record Retention

• HIPAA mandates withholding patient records and health insurance claims for at least six years– Unless state law specifies longer

• Records are retained for two years after a patient’s death


23

Preventing Health Care Fraud and Abuse

• HIPAA defines fraud as “an intentional deception or misrepresentation”

• The difference between fraud and abuse is individual’s intent


24

Common Forms of Medicare Fraud Includes

• Billing for services that were not performed

• Misrepresenting diagnosis to justify payment

• Unbundling codes


25

Examples of Abuse

• Excessive charges for services

• Services not medically necessary

• Improper billing practices


26

Examples of Abuse

• A person found guilty of fraud can face:– Civil penalties of $5,000 to $10,000 per

false claim– Imprisonment of up to 10 years– Administrative sanctions– Up to $10,000 civil monetary penalty per

line item on a false claim


27

Steps to Identifying Risk Areas

1. Perform periodic audits to monitor billing

2. Develop practice standards and procedures

3. Designate a compliance officer

4. Conduct training and education classes


28

Steps to Identifying Risk Areas

5. Respond by investigating allegations and disclosing to appropriate entities

6. Develop open lines of communication – Have disciplinary standards and

enforce them


29

Overpayments

• If reimbursed funds exceed the amount a provider or beneficiary were supposed to receive.


30

Overpayments Include

• Payment based on a charge• Duplicate processing of charges• Payment made to the wrong payee• Payment made for a item not used


31

Overpayments Include

• Payment during a period of nonentitlement

• Payment for another entity who is not the primary payer

• Payment made after the beneficiary’s date of death


32

Provider Liability for Overpayments

• Providers are responsible for reimbursement of overpayment when:– Incorrect reasonable charge determination– Provider received duplicate payments– Receiving a payment after accepting a

assignment


33


• Provider receives two payments:– One from Medicare and another from a

workers’ compensation or automobile carrier

• Provider was paid and did not accept the assignment

• Provider furnished erroneous information


34


• Put in a claim for a services that were not medically necessary

• Put in a claim for something that is not qualified for Medicare reimbursement


35


• Overpayment was made because of a mathematical or clerical error

• Provider does not submit documentation

• Billed under the one-time authorization procedure


36

National Correct Coding Initiative (NCCI)

• Analysis of standards medical and surgical practices

• Coding conventions included in CPT

• Coding guidelines made by national medical specialty societies


37

National Correct Coding Initiative (NCCI)

• Local and national coverage determination

• Review of current coding practices


38

Unbundling CPT Codes

• NCCI edits determine appropriateness of CPT code combinations

• NCCI edits are designed to detect unbundling

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Copyright © 2008 Delmar Learning. All rights reserved. Chapter 5 Legal and Regulatory Issues