NHS Optometric Services - Health in Wales

s
Wale Themed Paper 5
4
July 200
NHS Optometric Services The audit of claims for payment made by community opticians to the NHS in Wales

■ NHS Optometric Services

Contents

Foreword Page 3

1 Introduction Page 4

2 The work of the Audit Commission in Wales and its partners Page 9

3 The way forward Page 21

Appendices

1 Process followed in the audit of ophthalmic practitioners Page 24

2 Possible use of computer assisted audit techniques to review practitioner payments

Page 25

3 References Page 26

This paper is one of the first in a series of Themed Papers to be published by ACiW. The papers are intended to be straightforward and informative documents. Many of the papers such as this one, draw together knowledge and analysis from audits, inspections and studies which we have carried out. Others are designed to provide simple summaries of changes to policy or legislation which will impact on the public sector. The papers are published and distributed mainly in e-format thus helping to keep down costs and improve value for money.

This Themed Paper has been written mainly by Dave Rees (Knowledge and Information Manager) under the Editorship of Gill Lewis (Corporate Director - Audit). They would be pleased to have your reactions or comments on the Paper itself and the issues it raises.

This paper is available in both paper and electronic form.

Alternatively it’s available on our website:

To request additional copies please contact:

Dave Rees Knowledge and Information Manager Audit Commission in Wales 2-4 Park Grove Deri House Cardiff CF10 3PA

A Welsh version of this paper is available by contacting Rhodri Jones on 029 20 262688, e-mail: [email protected], or on our website. Electronic copies can be obtained from the website www.audit-commission.gov.uk/wales/ or e-mail to [email protected]

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mailto:[email protected]

http://www.audit-commission.gov.uk/wales/

mailto:[email protected]


Foreword

In 2002/2003 the former health authorities in Wales paid over £21.5m to 600 community optician practices, reimbursing over 900,000 payment claims relating to the provision of preventative and corrective eye care for children, the elderly, people on low incomes and those suffering from or pre-disposed to eye disease.

The NHS in Wales has limited resources. Whilst most claims for payment are legitimate, payment of inappropriate or fraudulent claims impacts on the ability of the NHS to treat those who most need its help. It is imperative therefore that every effort is made to reduce and eliminate all illegitimate claims.

This Paper sets out the findings of work undertaken jointly by the Audit Commission in Wales (ACiW), the 5 former Welsh health authorities and their local counter fraud specialists and internal auditors, the NHS Counter Fraud Service Wales, Police Fraud Squads, Durham and Tees Audit Consortium, civil solicitors and NHS ophthalmic advisors to prevent and detect inappropriate and fraudulent ophthalmic practitioner claims submitted to the former health authorities in Wales.

The work has resulted in the recovery of £400,000 wrongfully claimed from the NHS and civil actions have commenced to recover a further £207,000. We estimate that it has also prevented additional false or inappropriate claims, with a value of over £250,000 per annum, being made.

This paper sets out the findings of the work across Wales and reports:

o

o

our assessment of the adequacy of the scrutiny arrangements established by the former health authorities; and

the findings arising from audits of claims submitted by individual practitioners.

A real opportunity exists to develop an improved and consistent scrutiny function of primary care practitioners across Wales. The current structure of NHS Wales with 22 local health boards and a Business Services Centre (BSC) provides the opportunity for the introduction of consistent payment controls and scrutiny arrangements across Wales. Section 3 of this paper sets out a potential way forward and identifies what we believe are the key principles of effective scrutiny.

Clive Grace Director-General Audit Commission in Wales July 2004

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1 Introduction

Background

During 2002/2003, the five former health authorities in Wales paid in excess of £830mi to purchase primary care services from general practitioners, pharmacists, dentists and opticians.

Of this total over £21.5mii was paid to 600iii community optician practices as payment for providing preventative and corrective eye care for children, the elderly, people on low incomes and those suffering from or pre-disposed to eye disease. These services provided a valuable contribution towards improving the quality of life for those entitled to receive them. The last Welsh Health Survey in 1998 found that over 94% of patients who had visited their optician within the previous year were satisfied with the service they receivediv. There was no significant difference in patient views between health authority areas.

The NHS in Wales has limited resources. Payment of inappropriate or fraudulent claims impact on the ability of the NHS to treat those who most need its help. It is imperative therefore that every effort is made to reduce and eliminate such claims. To do this effectively, NHS bodies are expected to put in place measures to prevent inappropriate claims by introducing:

o

o

o

o

o

o

o

properly controlled monitoring and payment procedures;

the provision of high quality and reliable information for practitioners;

effective systems for detecting inappropriate claims;

robust procedures for recovering amounts inappropriately claimed; and

procedures to pursue disciplinary action when necessary.

Most claims received by the NHS are accurate and the majority of practitioners are scrupulous in ensuring that they claim no more than their legitimate entitlement. However, there are exceptions. The NHS Counter Fraud and Security Management Service (CFSMS) recently reported that ophthalmic patient fraud is costing the NHS in Wales some £900,000 per annumv. In addition, joint work by the ACiW, CFSW, NHS bodies in Wales and other regulatory partners has identified evidence of inaccurate, inappropriate and fraudulent practitioner claims.

The present system is built upon trust. Patients are only expected to sign General Ophthalmic Services (GOS) claim forms when they qualify for free services or receive financial help towards treatment cost. Practitioners can only claim for services provided in accordance with the regulations.

In recent years several measures have been taken by the Assembly to prevent and counter fraud, including:

the clear commitment in its 2001 publication, Countering Fraud in the NHSvi to reduce fraud in the NHS to an absolute minimum within 10 years;

the establishment in September 2001 of the NHS Counter Fraud Service Wales operational team based at the offices of the Business Service Centre, Pontypool;

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o

o

o

o

o

o

o

o

o

the requirement set out in directions issued by the Minister for Health and Social Services in 2001 that each NHS body in Wales must appoint suitably qualified LCFSs; and

the introduction of measures to check the eligibility of patients for free optical services.

These initiatives have had a significant impact. Recent work by the NHS CFSMS found that the cost to the NHS of optical fraud by patients has reduced by 40% from £1.5m to £900,000 per annumvii. Similar reductions in the level of patient fraud have also been achieved in other areas of primary care, eg, prescription and dental fraud.

Whilst we recognise and welcome these initiatives to reduce fraud perpetrated by patients, in our view it is also essential to identify practitioners who do not claim in accordance with the Regulations. Inappropriate, inaccurate and fraudulent claims by practitioners will lead to:

less money being available to a healthcare system which already has very limited resources;

honest and scrupulous practitioners being penalised as the business activities of other practitioners are being subsidised through their abuse of the system;

reputational damage being caused to both the ophthalmic profession and the NHS in general; and

fraudulent abuse of the system increasing unless firm action is taken to demonstrate that fraud will not be tolerated.

Following the restructuring of the Welsh NHS in April 2003, responsibility for ensuring the continuation of the community ophthalmic service, monitoring the quality of service provision and the payment of practitioners transferred to the 22 local health boards (which have all appointed local counter fraud specialists). Powys Local Health Board, through the Business Services Centre and its five geographically based sub-centres, is responsible for making payments to all practitioners on behalf of the other 21 local health boards.

The NHS services provided by community ophthalmic practitioners are governed by the General Ophthalmic Services (GOS) Regulations 1986 (as amended). Opticians submit claims to the NHS for services provided in accordance with those regulations.

During 2002/2003, the five Welsh health authorities reimbursed voucher claims for over:

645,000 sight tests;

250,000 pairs of spectacles or contact lenses; and

16,000 domiciliary visits by opticiansviii.

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In addition a number of NHS Trusts in Wales provide ophthalmic services for patients as part of a ‘hospital eye service’. When patients require new glasses and they are eligible for help towards the cost of their treatment, the hospital eye service issues them with claim forms detailing the prescription needed. Patients may present these claim forms to any community optician who will dispense the prescribed glasses. The community optician is then able to claim for this service at prescribed rates from the NHS Trust which originally issued the claim form. The exact volume of claims issued by NHS Trusts is unknown, but it represents a small percentage of the claims processed by the former health authorities.

Statistical analysis

National statistics show that there is significant variation in ophthalmic testing and prescribing between the former health authority areas.

For example, during 2002/2003 the number of NHS sight tests paid for by the NHS per 10,000 population varied by some 30% across the former health authority areas.ix (Exhibit 1).

Exhibit 1: Number of NHS sight tests per 10,000 population 2002/2003

0

500

1000

1500

2000

2500

3000

North Wales Dyfed Powys Bro Taf Gwent IMH

Num

ber o

f Sig

ht T

ests

0

500

1000

1500

2000

2500

3000

North Wales Dyfed Powys Bro Taf Gwent IMH

Num

ber o

f Sig

ht T

ests

Source: Department of Health National Statistics Consultation Tables – 2002/2003

Overall, the former Welsh health authorities paid for 17.3% more sight tests per head of population than authorities in England and 32% more than in Scotlandx. The difference primarily relates to children and the over 60s who are all entitled to free sight tests. However, the different age profile of the three countries only partly explains the difference (Table 2).

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Exhibit 2: Percentage of population under 19 years/over 60 years of age

Authority/Country Percentage <19 years

Percentage > 60 years

Total

Bro Taf 26.5% 24.9% 51.5%

Dyfed Powys 24.3% 31.0% 55.3%

Gwent 26.4% 26.6% 53.0%

Iechyd Morgannwg 24.6% 28.5% 53.1%

North Wales 24.4% 29.6% 54.0%

Wales (all areas) 25.3% 27.9% 53.2% England (all areas) 25.1% 25.6% 50.7% Scotland (all areas) 24.2% 21.1% 45.3%

In our view, the higher sight test activity level in Wales is influenced more by the frequency of testing than the age profile of the population.

In February 2002, the Department of Health, the Association of Optometrists and the Federation of Ophthalmic and Dispensing Opticians completed a Memorandum of Understanding on minimum intervals between sight testsxi.

Our auditors found that some opticians in Wales are carrying out sight tests more frequently than the minimum intervals specified in the Memorandum. For example, one practitioner was found to be testing all adult patients on an annual basis, rather than biennially as specified in the guidance for healthy patients between the ages of 16 and 70.

The number of pairs of glasses dispensed and paid for by the five health authorities in 2002/2003 (per thousand NHS sight tests) also varied by some 30%. As this statistic only relates to patients eligible for NHS treatment, this variance is not explained by demographic factors alone. In our view, this is primarily due to a combination of inappropriate prescribing and wrongful claiming (see Section 3). Exhibit 2 shows the number of NHS vouchers issued for glasses per thousand NHS sight tests paid by the five Welsh health authority areas and how this compares with both the average for Wales and England.

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Exhibit 3: Number of NHS spectacles vouchers paid per 1000 NHS sight tests 2002/2003

326340

399

427 431

359

390

200

250

300

350

400

450

Dyfed Powys North Wales IMH Bro Taf Gwent EnglandAverage

Wales Average

NH

S Sp

ecta

cles

Vou

cher

s (G

OS

3)

326340

399

427 431

359

390

200

250

300

350

400

450


Wales Average

NH

S Sp

ecta

cles

Vou

cher

s (G

OS

3)

326340

399

427 431

359

390

200

250

300

350

400

450


Wales Average

NH

S Sp

ecta

cles

Vou

cher

s (G

OS

3)

326340

399

427 431

359

390

200

250

300

350

400

450


Wales Average

NH

S Sp

ecta

cles

Vou

cher

s (G

OS

3)

326340

399

427 431

359

390

200

250

300

350

400

450


Wales Average

NH

S Sp

ecta

cles

Vou

cher

s (G

OS

3)

Source: Department of Health National Statistics Consultation Tables – 2002/2003 If the level of prescribing, as a proportion of sight tests undertaken, in the former Dyfed Powys Health Authority was repeated across Wales, NHS expenditure would reduce by £1.5m per annum. Whilst simple statistics can be misleading, the variance in prescribing patterns is sufficiently significant to warrant further investigation.

The work of ACiW and its partners

Between early 2001 and early 2004, ACiW and its partners carried out a review of the arrangements in place at each of the health authorities in Wales and their successor bodies to:

o

o

prevent inappropriate claims by ophthalmic practitioners; and

minimise the number of inaccurate claims.

This work included undertaking detailed audit reviews of 10 ‘high risk’ ophthalmic practices; ie, those practices which submitted a higher than expected volume of claims and/or where their pattern of claims was unusual.

The work undertaken and our findings are set out in detail in the following section.

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2 The work of the Audit Commission in Wales and its partners

Introduction

The work of ACiW and its auditors is undertaken in accordance with the Audit Commission Act 1998 and the Code of Audit Practice 2002 (which is approved by Parliament). One of the key responsibilities of our auditors as set out in the Code is to:

“Consider whether the audited body has put in place adequate arrangements to maintain proper standards of financial conduct and to prevent and detect fraud and corruption”.

Between early 2001 and early 2004, ACiW in conjunction with its partners carried out a major exercise to:

o

o

assess the adequacy of the arrangements in place at the former health authorities and their successor bodies to scrutinise the services provided by ophthalmic practitioners; and

examine the accuracy of claims submitted to the NHS by 10 ophthalmic practitioners contracted to the NHS.

Our auditors have focused on the key financial controls in place and not on the clinical competence of practitioners.

However, in carrying out their work, our auditors frequently found that where practitioners had poor standards of financial administration this was accompanied by poor clinical record keeping. A number of practitioners found to have submitted wrongful claims to the NHS have subsequently been referred to the payment organisation and CFSW. Professional disciplinary action and/or criminal and civil action is now being taken against a number of these practitioners.

Details of this work and its findings are set out in the following sections.

Review of arrangements

In 2002/2003, the five Welsh authorities in Wales processed over 645,000 practitioner claims for carrying out sight tests and over 250,000xii claims for providing spectacles or contact lenses with a value of over £21.5mxiii. Exhibit 3 shows how this was split across each health authority.

Exhibit 3: Value of GOS Claims (£m) paid by Welsh health in authorities 2002/2003

£3,877

£3,038

£4,052£5,668

£5,014North WalesDyfed PowysIMHBro TafGwent

£3,877

£3,038

£4,052£5,668

£5,014North WalesDyfed PowysIMHBro TafGwent

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Whilst the GOS Regulations prescribe the statutory framework for the payment of ophthalmic practitioners, each health authority established its own procedures and practices within the parameter set by these regulations for monitoring the accuracy of the claims submitted for payment and for assessing the standards of service provided. Payments were made through the authorities’ contractor payments department, although the level of scrutiny which practitioner services and claims applied by the health authorities varied significantly.

In view of the high volume of claims being processed, standard payment controls are not wholly effective. Scrutiny of individual claims alone is not an effective measure to prevent or detect inaccurate, wrongful or fraudulent claims. Effective measures to scrutinise such a high volume of claims must be robust, automated as far as possible and must involve partnership working between health bodies, ophthalmic practitioners and regulators. The Audit Commission in its 1998 publication, ‘Protecting the Public Purse 1998’xiv, stated; “The regulations governing reimbursement of treatment fees are complex and confusing and…even where monitoring systems are well developed, Health Authorities are often overwhelmed by the volume of claims”.

The key elements of an effective system are discussed further under the following headings:

o

o

o

o

o

Information, education and training for practitioners;

Use of statistical techniques and analysis;

Training and support for payments staff;

Post payment verification; and

Commitment to combat fraudulent activity.

Information, education and training for practitioners

Ensuring that practitioners receive adequate information and training is essential. Not only does it prevent inaccurate claims, it also helps to ensure the regulations are applied equitably across all practitioners and removes the excuse of those who intentionally abuse the system that they just ‘misunderstood’ the regulations.

Inaccurate claims are sometimes simply submitted because practitioners do not fully understand what they are entitled to claim under the regulations and are uncertain how to complete claims. We found that some practitioners are unaware of regulation changes and had little understanding of the expectations of the commissioning health body.

Our analysis also found that some of the former health authorities were not proactive in advising practitioners on how to interpret the regulations. Practitioners were not provided with copies of the latest regulations and little was provided by way of training on the GOS Regulations themselves or on the standards of service which the health authorities expected from NHS practitioners.

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However, by contrast the former Gwent Health Authority did make significant progress in this area. The Authority employed an optometric advisor who as well as advising on specific issues, produced and issued to practitioners comprehensive guidance on the regulations, how to complete and code claim forms, specified the recommended frequency of sight testing and so on. In recent years three other Welsh health authorities have also employed optometric advisors. Nevertheless, in our view the level of professional optometric advisory resource generally available to local health boards is inadequate and further investment is needed in this area.

Use of statistical techniques and analysis

Identifying practitioners who frequently submit fraudulent/inaccurate claims is extremely difficult unless a health body adopts and utilises statistical analysis. It is often only by comparing the volume and pattern of a practitioner’s claims with other practitioners can problems be identified. Failure to utilise statistical techniques to identify high risk practitioners in this way can result in limited resources being poorly targeted.

Comparing practitioners against a small number of indicators may identify those practitioners who are likely to be submitting inaccurate or fraudulent ophthalmic claims. Table 1 sets out some of the indicators which we have found to be particularly useful in identifying unusual claiming patterns.

Table 1: Comparative indicators for ophthalmic practitioners

Number of sight test vouchers by practitioner.

Spectacle vouchers issued as a percentage of sight tests.

Repair and replacement vouchers as a percentage of total spectacles claims.

Percentage of total spectacles claims which include a claim for a tint.

Percentage of total claims which include a claim for small glasses.

Percentage of spectacle claims categorised as ‘A Band vouchers’ (lowest value claim).

Percentage of spectacle claims which are for the issue of bifocal glasses.

Percentage of spectacle claims which are for two pairs of glasses (reading and distance glasses).

At one health authority in Wales, statistical analysis of the claims of one practitioner identified that almost 50% of voucher claims for glasses included a claim for providing a tint. The national average for the provision of tinted spectacles is approximately 6%. A subsequent audit of the practitioner concerned indicated that at least £70,000 had been wrongfully claimed from the NHS over a four year period, (although it is estimated that the actual figure could be as high as £150,000), ( Case Study 2).

In general, we found that each of the health authorities had at some stage made use of the type of statistical analysis referred to above. Iechyd Morgannwg Health Authority’s Internal Audit function made very good use of statistics to identify ‘high risk’ practitioners. This work was instrumental in identifying a practitioner who had deliberately submitted false claims, (Case Study 1). Bro Taf and North Wales Health Authorities also utilised statistical analysis to inform their post-payment verification programmes.

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However, across Wales, statistical analysis was undertaken on a more ‘ad hoc’ basis than as a matter of routine and insufficient resources were dedicated to this form of analysis. The main reason for this situation was the batch processing of sight test claim forms and the lack of automation of the payments process to enable the automatic generation of exception reports and claimant trends.

Case study 1

Background

The sole practitioner of a high street practice had undertaken work for the health authority for several years.

Following statistical analysis of all opticians in the health authority area, the health authority’s internal auditor categorized this practitioner as high risk due to his unusual claiming pattern. Of particular concern was the high number of claims the optician had made for repairing and replacing spectacles. She contacted an Audit Commission auditor who, after review of the claims, agreed to undertaken a more detailed audit review.

The audit review

The audit revealed the optician had claimed for:

replacing glasses when he had only repaired them;

issuing glasses which were not clinically necessary eg, non-prescription sunglasses;

dispensing spare pairs of glasses for children without health authority approval;

replacing disposable contact lenses although the regulations made no such provision; and

issuing glasses to patients who were not eligible for NHS treatment.

The records showed that these activities had taken place over a 10 year period.

Following the reporting of the audit findings to the health authority, the case was referred to the Police. A criminal investigation was undertaken and the optician was charged with obtaining money by deception. He pleaded guilty to 41 offences and received a suspended prison sentence. The optician was subsequently investigated by his professional body and suspended from practice. He has repaid £25,000 to the health authority so far and agreed to repay a further £25,000.

Training and support for payments staff

Staff processing practitioner claims provide the first line of defence against inaccurate or fraudulent claims. Their work is vital in ensuring the integrity of the system. However, in most authorities we found that the staff responsible for processing claims were often the less senior members of the organisation and had received little or no training on the regulations or what to specifically look for when undertaking this work. Furthermore, review of the work of these staff and general support was sometimes inadequate.

Whilst, the volume of claims is so great that the use of statistical techniques and trend analysis is often needed to detect ‘high risk’ practitioners this is not always the case. On occasions, it is possible to detect potential problems from a very basic review of individual claims.

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Over several years, an optician in one practice frequently amended or overwrote details on claim forms which had been completed by other opticians in that practice. It was possible by basic examination of the claims by health authority staff to establish that the amendments warranted investigation. (Case Study 2)

Case study 2

Background

The owner of a community practice was a dispensing optician; she employed three testing opticians to test the eyesight of patient’s and dispensed optical appliances on the basis of their prescriptions. The optician claimed almost £100,000 from the NHS each year.

The health authority expressed concern to its auditor that the claims being submitted by this practice often included claims for supplements such as tints and specially manufactured frames. In addition, the claim forms often seemed to have been altered or overwritten.

The audit review

The audit revealed that the practice had claimed for:

glasses but not dispensed them;

tints but not tinted glasses;

replacing glasses when they had only been repaired;

issuing appliances which were not clinically necessary eg, non-prescription sunglasses and ‘cat’s eye’ contact lenses;

providing bifocal glasses but only dispensed single vision glasses; and

dispensing spare pairs of glasses without health authority approval.

The records showed that these activities had been ongoing for over 16 years.

Following the audit findings, the health authority terminated its contract with the optician and reported the case to the Police. A criminal prosecution of the optician was withdrawn at court. However, the local health board (the successor authority) initiated civil action against the optician and has recovered over £50,000 claimed wrongfully from the NHS and are awaiting a court hearing in respect of the optician’s liability for the health authority’s legal costs. The health authority is currently considering reporting the optician to her professional body for disciplinary action.

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Post payment verification

Whilst much can be done by health bodies to prevent inaccurate and fraudulent claims by providing better information for practitioners and utilising better risk assessment techniques, visiting practitioners to assess the accuracy of claims is fundamental to establishing a rigorous control environment. Such visits are referred to as post-payment verification (PPVs) visits. Establishing whether claims are accurate or not must involve confirming that the claims submitted are consistent with the underlying records maintained by the practitioner. Systematic, regular and targeted PPV visits are an important part of an effective control environment for preventing and detecting wrongful claims.

PPV visits serve a number of useful purposes including:

o

o

o

Deterring practitioners from submitting fraudulent claims. The knowledge that premises will be visited and records examined increases the likelihood of detection.

Identifying those practitioners who do not fully understand the regulations and are therefore potentially submitting inaccurate claims. By identifying problem areas, authorities can produce better and clearer guidance for practitioners. PPV visits are therefore of benefit to both the health authority and ophthalmic practitioners.

Recovering monies wrongfully claimed from the NHS. Undertaking PPV visits is an effective method of commencing civil recovery of amounts wrongfully claimed from the NHS.

Of the five health authorities in Wales, only North Wales and Bro Taf Health Authorities had rigorous programmes of PPV visits. It is significant that the PPV programme for Bro Taf was suspended because the health authority was unable to provide the level of resources required to undertake the number of investigations deemed necessary following these visits.

It is worthy of note that the expenditure per head of population in 2002/2003 on ophthalmic services in North Wales was significantly lower than that of the other Welsh health authorities (Exhibit 4). Whilst there are likely to be a number of factors which may help to explain this position, eg, the demography of the area, the practice of undertaking PPV visits is considered to be partially responsible for the reduced level of prescribing.

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Exhibit 4: Expenditure per head of population on ophthalmic services 2002/2003

Expenditure per head of population on ophthalmic services (2002/03)

0

1

2

3

4

5

6

7

8

9

10

North Wales Dyfed Powys IMH Gwent Bro TafHealth Authority

£pe

r hea

d of

pop

ulat

ion

Expenditure per head of population on ophthalmic services (2002/03)

0

1

2

3

4

5

6

7

8

9

10

North Wales Dyfed Powys IMH Gwent Bro TafHealth Authority

£pe

r hea

d of

pop

ulat

ion

Commitment to combat fraudulent activity

Most ophthalmic practitioners are honest, law abiding and are committed to providing the best possible care for their patients. However, a small number have been shown not to be. Identifying and dealing with practitioners who deliberately submit false claims can often be expensive and time-consuming and requires huge commitment and perseverance. To succeed, a system of sanctioning needs to be applied to discourage inappropriate conduct.

Our work has found that the health authorities were committed to rooting out fraudulent practitioners and each had undertaken some work to this end. However, no authority had given this work as much attention as it deserved. Some authorities compiled lists of ‘high risk’ practitioners, but many were never subsequently investigated. In our view there were two principle reasons for this:

o Limited staff resources - Fraud work requires skilled and dedicated staff. The work is often labour intensive, very complex and sensitive and can take several years to bring to fruition. Whilst, the authorities employed local counter-fraud specialists, their responsibilities covered the full range of health authority functions and little time was allocated for undertaking ophthalmic investigations. Where local counter fraud specialists have been allocated resources to monitor the claims of ophthalmic practitioners this has resulted in the recovery of significant overclaims (Case Study 3).

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o Limited incentive - Investigations are usually costly to undertake and the initial recovery of monies may be less than the cost of the investigation. The benefit of investigations is only realised in future years as the overall value of claims is reduced. The Wales Assembly Government directly funded health authorities in respect of payments to community ophthalmic practitioners. As a result, health authorities received no financial benefit for undertaking fraud investigation work and occasionally incurred significant financial cost as a result of their work.

Case study 3

Background

The owner and sole practitioner of two high street optician shops had undertaken work for the health authority for almost 20 years and claimed almost £100,000 from the NHS each year.

Following statistical analysis of all opticians in the health authority area, the health authority’s local counter fraud specialist categorised this practitioner as high risk due to the volume of claims being submitted and his unusual claiming patterns. She contacted an Audit Commission auditor who, after review of the claims, agreed to undertaken a more detailed audit review.

The audit review

The audit found that the optician had claimed for:

glasses he had not dispensed;

dispensing tinting glasses which were not tinted;

replacing glasses but had only repaired them;

providing glasses with stronger prescriptions than had actually been dispensed;

issuing appliances which were not clinically necessary eg, non-prescription sunglasses;

issuing spectacles from both the health authority and the NHS Trust hospital eye service;

providing bifocal glasses but had only dispensed single vision glasses; and

dispensing spare pairs of glasses without health authority approval.

The records showed that these activities had been ongoing for over 10 years.

Following the reporting of the audit findings, the health authority referred the case to the Police. A criminal investigation is ongoing. The health authority initiated civil action against the optician and has recovered £120,000 wrongfully claimed from the NHS. The successor local health board in conjunction with CFSW is intending to pursue disciplinary action with the optician’s professional body.

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The overall conclusion of our assessment of the arrangements made by the five health authorities was that each authority had made considerable progress in implementing procedures to establish the effective scrutiny of practitioners. However, much work still remains to be done. Examples of notable practice were identified at each authority but there was little evidence that officers of the health authorities were meeting regularly to exchange experiences and learn from one another. Moreover, none of the authorities had managed to maximise the potential of modern technology to prevent and highlight inappropriate claims

Audit of practitioners

Between 2001 and 2004, ACiW auditors in conjunction with our regulatory partners carried out audit reviews of 10 ophthalmic practitioners in Wales.

The audit process followed is detailed in Appendix 1.

Our reviews found that some practitioners have submitted claims which were significantly in excess of what they were entitled to claim. Of the 10 reviews conducted to date almost £400,000 has been recovered or terms for repayment have been agreed. Civil recovery actions have commenced in respect of a further £207,000. The extent of the amount wrongly claimed by these opticians from the NHS is likely to be significantly more than the projected recovery. Our audit investigations found that some of these opticians had been overclaiming from the NHS for over 20 years. However, as many of the records, including claim forms had been destroyed many years previously, it was impossible to identify all the overclaims that had been made or to recover the full amount overclaimed. We estimate that the true amount wrongly claimed is likely to be in excess of £2m.

Following these audits, health authorities have taken the following action as set out in Table 2.

Table 2: Action taken following audit review

Criminal investigation by Police (cases started prior to establishment of NHS CFSW

Criminal investigation by NHS CFSW

Civil recovery action

Disciplinary case referred to professional body

Advice given regarding future claims

Optician 1 √ √ √

Optician 2 √

Optician 3 √

Optician 4 √ √ Pending

Optician 5 √





Optician 10 √

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In addition to the recovery of past overclaims, the audit reviews also had the added benefit of preventing further overclaims. We estimate that this work has prevented false or inappropriate claims with an annual value of over £250,000 per annum being made by these 10 practitioners alone.

Impact of the work

This work can have a significant impact beyond the individual practitioners who have been investigated. Improved arrangements for preventing and detecting inaccurate claims, in conjunction with direct action against contractors wrongly claiming from the NHS, is likely to reduce inaccurate or fraudulent claims more generally.

The number of NHS sight test vouchers has increased over the last six years (Exhibit 5). However, this is due primarily to the Welsh Assembly Government, with effect from 1 April 1999, extending eligibility for free sight tests to all people over the age of 60.

Exhibit 5: Number of NHS sight test vouchers (THOUSANDS) reimbursed by Welsh health authorities 1997/1998 to 2002/2003

0

200

400

600

800

1997/98 1998/99 1999/00 2000/01 2001/02 2002/03

Financial Year

0

200

400

600

800

1997/98 1998/99 1999/00 2000/01 2001/02 2002/03

Financial Year

Sigh

t tes

ts (0

00s)

0

200

400

600

800

1997/98 1998/99 1999/00 2000/01 2001/02 2002/03

Financial Year

0

200

400

600

800

1997/98 1998/99 1999/00 2000/01 2001/02 2002/03

Financial Year

Sigh

t tes

ts (0

00s)

Source: WAG Ophthalmic Statistics for Wales Bulletins

Despite the increase in the number of sight tests, over the last few years, the number of GOS spectacle voucher claims being paid by the health authorities in Wales has fallen significantly over the last few years, (see Exhibit 6). England and Scotland have also experienced reductions. However, over the last 4 years the reduction in claims has been greater in Walesxv. We believe one of the main reasons for this has been the partnership work undertaken in Wales by the NHS Counter Fraud Services Wales, NHS bodies, ACiW, the Welsh Assembly Government and others to prevent and detect inaccurate and inappropriate claims by patients and NHS contractors. This work has been more extensive than in other areas of the UK.

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Exhibit 6: Number of spectacle vouchers reimbursed by Welsh health authorities (thousands) 1997/1998 to 2002/2003

220240260

280300320

1997/98 1998/99 1999/00 2000/01 2001/02 2002/03Financial Year

Num

ber o

f spe

ctac

le

vouc

hers

(000

s)

220240260

280300320

1997/98 1998/99 1999/00 2000/01 2001/02 2002/03Financial Year

Num

ber o

f spe

ctac

le

vouc

hers

(000

s)

Source: WAG Ophthalmic Statistics for Wales Bulletins

The impact of this partnership has not just been restricted to financial values above. In addition to identifying inappropriate claims, the audits helped to identify examples of poor record keeping and unusual clinical practices, (Case Study 4). Several of the practitioners who were found to have submitted inappropriate claims are currently facing disciplinary action by their professional organisations.

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Case study 4

Background

The sole practitioner of a high street optician practice working under a franchise of a chain of opticians had undertaken work for the health authority for several years.

Following statistical analysis of all opticians in the health authority area, the health authority’s local counter fraud specialist categorised this practitioner as high risk due to his unusual claiming pattern. Of particular concern was the high incidence of claims for bifocal spectacles.

The audit review

This audit found that in fact the high incidence of bifocal claims was not the result of inaccurate or fraudulent claims but was due to the optician using an uncommon clinical approach to treating children with eyesight problems. The health authority subsequently referred the matter to an ophthalmic advisor who confirmed that the technique was a recognised clinical approach within the profession.

However, the audit also found that the optician had contravened the regulations by claiming for:

dispensing spare pairs of glasses without health authority approval; and

replacing adult glasses without health authority approval.

Health authority staff discussed the findings with representatives of the chain of optician’s. These representatives committed themselves to improving the procedures for submitting NHS claims at all their franchises. A total of £12,000 was repaid to the health authority in respect of the overclaims.

Whilst the work undertaken to date has had a significant impact, the methodology and approaches used are not a blueprint for all future work. Many lessons have been learnt which will prove invaluable in developing a more effective scrutiny framework for the future. Nevertheless, in order to maximise the impact and effectiveness of future work, it will be necessary to employ a range of different approaches depending on the circumstances prevailing at that time at individual sites. For example, whilst in most cases, NHS staff will be able to access practitioner records within 14 days using their regulatory powers, if there is genuine concern that records may be altered/destroyed it may be necessary to invoke statutory audit powers to gain immediate access.

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3 The way forward

Each of the former health authorities in Wales made considerable progress towards introducing effective scrutiny of both the services provided by NHS opticians and claims for reimbursement. We believe this scrutiny was instrumental in improving the service provided by practitioners as well as minimising inaccurate, inappropriate or fraudulent claims.

The dissolution of the five health authorities and the creation of 22 local health boards from 1 April 2003 represents both a threat and an opportunity to this progress.

There is danger that the impetus which had built up could be lost. However, the creation of the BSC as part of Powys Local Health Board has provided a vehicle which could be used to provide an effective scrutiny role of not just ophthalmic practitioners but all primary care practitioners.

The importance of this function cannot be overstated. The NHS in Wales pays out in excess of £830m to purchase primary care services. An effective scrutiny function is essential to delivering both improvements in performance standards within primary care and value for money. The NHS has a duty to ensure that value is achieved for the money spent.

The work of ACiW detailed in this paper has identified considerable scope for improving the standard of scrutiny by the NHS of the services provided by practitioners.

Initial assessment of the geographically based sub-centres of the BSC indicates that at present the scrutiny function is underdeveloped and inconsistent. It has not been given the priority it deserves. Each of the individual sub-centres has continued to use the methodologies and practices of whichever former health authority covered the same geographical area. The extent and quality of scrutiny is variable across Wales and much remains to be done.

This paper is not intended to specify the structural framework for an effective scrutiny function, the methodologies or approaches which should be used or the relative responsibilities of each party. However, set out in Table 3 is what we envisage would be the underlying principles and key components of an effective scrutiny function.

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Table 3: Principles of an effective scrutiny function

Principles Improvement focused Our work has shown that most inaccurate claims are not due to fraud but to poor

practice, be it poor record keeping, poor clinical practice, over-prescribing or misunderstanding of the regulations etc. It is therefore essential that the focus of a scrutiny function should be on improving performance and standards generally and in so doing securing value for money and enhancing the quality of service provided to patients. This can only be achieved by having an integrated function which is able to call upon and utilise the skills of experts from each of the relevant disciplines.

Partnership working Effective scrutiny of primary care services requires experts in several disciplines and from several different organisations to work together, develop joint work-programmes, pool resources and information. We would expect involvement in the scrutiny function from the following disciplines: 1. clinicians;

2. contractor payments staff;

3. auditors;

4. counter fraud specialists; and

5. solicitors. Wales wide The NHS should expect practitioners to provide the same standard of service

regardless of where they are based in Wales. Likewise, NHS practitioners have a right to expect consistent treatment regardless of which local health board they are contracted to. It is important therefore the scrutiny and counter fraud function should be consistent across Wales, the same rigour should applied in each of the former health authority areas and practices and procedures should be universally applied. Our work has shown that since the creation of the local health boards this has not been the case. However, we welcome the recent initiative of the BSC in developing standard operating practices for authorising payments on behalf of the local health boards and we believe will help to promote consistency as far as the payments process is concerned. A real opportunity exists to consolidate and develop the various elements of good practice which exist at each sub-office and create a consistent and robust function. The Assembly’s current proposals for restructuring the BSC and reducing the number of sub-offices will provide a good opportunity for standardising the scrutiny approach across Wales.

Single payment system Both Local Health Boards and NHS Trust Hospital Eye Services pay community practitioners for providing ophthalmic services. Whilst they use the same regulations, they operate separate payment systems and use different claim forms. The current arrangements increase the potential for wrongful claiming and make it impossible to create a single database of a patient’s NHS ophthalmic history. The work undertaken has identified several problems relating to the operation of two independent systems, in particular there is evidence of: •

•

Some practitioners claiming from both the former health authority and the hospital eye service for dispensing a single optical appliance. Some hospital consultants with the hospital eye service encouraging patients in their care to claim for repairs or replacements of optical appliances from the health authority/local health board. This is not a legitimate practice and results in cost transference from secondary to primary care.

In our view the Assembly should consider the potential to create a single payment process for NHS ophthalmic claims, whereby the BSC processes all such claims on behalf of the NHS Trusts and is reimbursed by the Trusts for proving this service.

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Principles Commitment of management

Corporate commitment is a prerequisite of a successful scrutiny and counter fraud function. Senior management must prioritise the need to improve primary care standards and this requires investment both in terms of dedicated staff resource and finance.

Proactive and innovative

The scrutiny function needs to proactively drive improvement rather than simply assessing standards and sanctioning poor practice or malpractice. The function should take the lead in disseminating examples of notable practice, training practitioners and using modern technology to enhance the function. For example the use of Computer Assisted Audit Techniques (CAATs) is a cost effective and very successful way of analysing contractor payments data and identifying unusual claiming patterns and clinical practices. Appendix 2 sets out further details of how CAATs could be used to scrutinise practitioner payments.

Better resourced Scrutiny work is labour intensive. However, an effective function provides a long-term payback both in terms of reducing inaccurate and inappropriate claims and improving patient care. In our view the primary care scrutiny function is not adequately resourced throughout Wales and staff employed in scrutiny often do not possess the skills they need to deliver an effective service.

Incentivised To date there has been little financial incentive for health bodies to use their limited resources to undertake scrutiny work. This is because they receive no incentive or reward for improving standards, preventing inaccurate claims or recovering monies wrongly claimed. Health bodies are reimbursed by the Welsh Assembly Government what they spend and do not retain any monies recovered or savings made (other than where fraud is proven in the courts). The Welsh Assembly Government have agreed recently to contribute to the establishment of a ‘fraud pool’ for local health boards which will meet the investigation costs of future suspected fraud cases. Furthermore, the recovery of any costs from court proceedings will be paid back into the ‘fraud pool’ to be used for subsequent investigations. ACiW welcomes these initiatives.

Wales has the opportunity to establish and develop an effective scrutiny function of primary care contractors across Wales. The current structure of the NHS in Wales lends itself to providing an integrated all Wales service. The creation of 22 local health boards in place of the five former health authorities, provides the opportunity for the local scrutiny of practitioners which should help to strengthen the links between the health bodies and practitioners. The establishment of the Business Services Centre (BSC), processing claims for payment on behalf of each of the 22 local health boards, provides the opportunity for the introduction of consistent payment controls across Wales.

Many lessons have been learned from the work undertaken on ophthalmic audit; relevant skills have been acquired by NHS staff and its regulators; and the potential for improving services has been clearly identified.

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1 Process followed in the audit of ophthalmic practitioners

Stage 1 - Statistical analysis - The health authorities undertake statistical analysis of the claims for payment they have received to identify; i) practitioners submitting a very high volume of claims; ii) practitioners with unusual claiming patterns, eg, claiming for tinting a high percentage of spectacles. From this analysis certain practitioners are identified as ‘high risk’. Stage 2 – Agreeing the approach - Early consultation takes place between NHS staff, the NHS Counter Fraud Service Wales and Audit Commission auditors as to how to proceed, (Directions issued by the Minister for Health and Social Services in July 2001 required NHS bodies to refer all suspicions of fraud to LCFS/NHS CFSW at the earliest opportunity). Stage 3 - Preparation for audit - Audit Commission auditors review the statistical analysis and agree with the health authority which practitioner should be audited as a priority. The health authority then compiles a list of claims submitted by that practitioner which will form the scope of the records to be audited. Stage 4 - Securing records for audit - The supporting records used to complete the relevant voucher claims are kept by practitioners at their commercial premises. These records typically include clinical record cards, order forms, invoices and appointment diaries. Access to the records has been possible using a number of approaches. These include Audit Commission auditors exercising their statutory rights of access under the Audit Commission Act 1998, health authority staff invoking their powers under the optician’s terms of service which require opticians to allow access to the records within 14 days, the exercise of Police powers or voluntary agreement with opticians. Stage 5 - Undertaking the audit - This stage of the process involves checking that the voucher claims are consistent with the supporting prime documentation. This work is undertaken jointly by audit and health authority staff and with reference to the health authority’s ophthalmic advisor. Stage 6 - Reporting the audit - Having completed the audit a decision is reached as to whether further action is necessary. If no problems have been identified, the records will be returned to the practitioner and no further action will be taken. If the audit has revealed examples of wrongful claims, the audit findings will be referred to NHS CFSW, (prior to the creation of CFSMS potential fraud cases were referred to the Police) to consider whether criminal, civil and disciplinary action should be taken.

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2 Possible use of computer assisted audit techniques to review practitioner payments

Computer Assisted Audit Techniques (CAATs) are tools which enable high volumes of electronically held data items to be sorted and analysed. CAATs are used extensively by the ACiW to analyse data held in payroll, debtor, creditor, stores, internet systems etc. One of the major benefits of CAATs is that mechanical analysis can be used to quickly identify transactions most likely to be incorrect or high risk.

CAATs are ideal for analysing data held within contractor payment systems as the volume of transactions being processed is too great to enable effective manual sorting and analysis of data.

Applying a CAAT is a four stage process:

o

o

o

Raw data is extracted from an application. This may be financial or non-financial information. This can be the most complex aspect of the work as different applications store their data in differing layouts and formats. Expertise is required to ensure that data is extracted in the most effective way to ensure its accuracy and completeness is preserved. (ACiW’s Information and Information Technology Team would be pleased to advise on this process).

The data is exported into a standard format in specialist analysis software eg, IDEA software. It is essential that the format is standardised as data may be confined from a number of different sources within one or more applications.

A variety of tests are then run on the data. The scope of these tests is limitless. Common tests include:

- Duplicate values eg, whether a claim has been made in respect of the same patient on the same day, or during the same week.

- High incidence of claims eg, identification of the highest number of claims submitted within a single period. Submitting large numbers of small value transactions is frequently used in an attempt to disguise fraudulent activity.

- High value claims. The value of transactions may be inflated in an attempt to claim more than the standard entitlement.

- Comparative analysis. This involves identifying differences between contractors based on non-monetary indicators. This process can identify individual contractors with patterns of claims significantly different from the majority. ‘Outliers’ such as these may indicate inappropriate activity.

Standard reports are generated which set out the results of the tests run and highlight data/contractors which fall outside predefined parameters. This data is invaluable in effective targeting of limited investigative resources.

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References

i Health Authorities in Wales - Annual Accounts 2002/2003 ii Health Authorities in Wales - Annual Accounts 2002/2003 iii National Assembly for Wales - Statistical Bulletin SB 78/2003 iv National Assembly for Wales – Health Statistics Wales 2002 Chapter 5 v NHS Counter Fraud and Security Management Service – Press Release 11

February 2004 vi National Assembly for Wales – Countering Fraud in the NHS Wales – September 2001 vii NHS Counter Fraud and Security Management Service – Press Release 11

February 2004 viii National Assembly for Wales - Statistical Bulletin SB 78/2003 ix Department of Health – Consultation Tables 2002/2003 - October 2003 x Department of Health – Consultation Tables 2002/2003 - October 2003 xi Department of Health, Association of Optometrists and the Federation of Ophthalmic and Dispensing Opticians – Memorandum of Understanding on the Frequency of Sight Tests – February 2002. xii National Assembly for Wales - Statistical Bulletin SB 78/2003 xiii Health Authorities in Wales - Annual Accounts 2002/2003 xiv Audit Commission – Protecting the Public Purse: Ensuring Probity in the NHS, 1998 xv Department of Health – Consultation Tables 2002/2003 - October 2003

Documents

NHS Optometric Services - Health in Wales