Preventing Health Care Fraud


Medicare Part D – Fraud, Waste and Abuse (FWA) The fraud control game is dynamic, not static. Fraud control is played against opponents: opponents who think creatively and adapt continuously and who relish devising complex strategies; this means that a set of fraud controls that is perfectly satisfactory today may be of no use at all tomorrow, once the game has progressed a little. — Malcolm K. Sparrow1

In October 20, 2008, the Centers for Medicare & Medicaid Services (CMS) released a memorandum (Fraud, Waste, and Abuse Training Requirements) as a follow-up to the 2009 CMS Call Letter released last March 17, 2008, mandating Health Plans to apply Compliance Training and communication requirements to first-tier, downstream, and related entities, including Fraud, Waste and Abuse. The training requirements were effective January 1, 2009 and must be completed within one year (December 31, 2009). Thereafter, the training on the Part D Program must be provided on an annual basis.

CMS Chapter 9 – Part D Program to Control Fraud, Waste and Abuse provides both rules and guidelines for Part D Health Plans like Care1st and its contractors (first-tier), subcontractors (downstream), and other related business entities on how to implement the regulatory requirements under 42 Code of Federal Regulations (C.F.R.) §423.504(b)(4)(vi)(H) to have in place a comprehensive FWA compliance plan to detect, correct and prevent fraud, waste and abuse.

Components of a Comprehensive Program to Detect, Prevent and Control Part D Fraud, Waste and Abuse as part of the General Compliance Plan Requirements Care1st Health Plan (“Care1st”) prohibits fraud, waste, or abuse and is committed to respond appropriately in the event – potential or suspected – fraud, waste, or abuse is committed by its employees, vendors, subcontractors, contracted providers, or business associates.

The CMS Chapter 9 FWA provisions are integrated into each element of the Care1st Health Plan’s existing compliance program. The Care1st’s FWA Medicare Compliance Program has been organized to follow in sequence the core elements of a compliance plan in accordance with the Office of the Inspector General’s (OIG) Guidelines.

The core elements involved in developing the fraud, waste and abuse component of Care1st’s Medicare (Part D) Compliance Program include:

  1. Written Policies and Procedures – Care1st must have written policies, procedures and standards of conduct that articulate Care1st’s commitment to comply with all applicable Federal and State standards.

    1. Care1st has developed policies and procedures, including a Standard of Conduct, demonstrating its compliance and commitment as an entity that is contracted with the federal government.
  2. Compliance Officer and Compliance Committee – Care1st must designate a compliance officer and compliance committee that is accountable to senior management.

    1. In February 1999, Care1st’s Board of Directors appointed Brooks Jones, CHC as the Plan’s Corporate Compliance Officer. He can be reached at (323) 889 -6638, extension 6202.
    2. Care1st also has in place a Compliance Committee that meets on a regular monthly basis. The purpose of the Compliance Committee is to assist in the implementation of the Compliance Program and annual Work Plan; address, identify, and resolve compliance issues, auditing requirements, as well as other federal, state and local laws, regulations, licensing and contractual requirements, and accreditation standards.
  3. Training and Education – Care1st must provide effective training and education between the Compliance Officer and organization’s employees, subcontractors, agents, and directors who are involved in the Part D benefit.

    1. Care1st provides Computer-Based-Training (CBT) to its employees to comply with regulations and assist in fraud, waste and abuse efforts. CBT training addresses pertinent laws related to fraud and abuse (e.g., Anti-Kickback Statute, False Claims Act, etc.,) and includes a discussion of Part D vulnerabilities identified by CMS, the OIG, the Department of Justice, and other organizations as well as Care1st Health Plan. In addition, Care1st’s newsletters also provide another avenue to address and establish awareness of its FWA compliance training to its contracted and subcontracted entities.
  4. Effective Lines of Communication – Care1st must have a system in place to receive, record, and respond to compliance questions, or reports of potential or actual noncompliance from employees, contractors, agents and directors while maintaining confidentiality, allowing anonymity if desired (e.g. through telephone hotlines or mail drops), and ensuring non-retaliation against callers.

    1. Care1st has established a toll-free Hotline to receive, monitor, process, and resolve non-compliant activities. Report any suspected or potential fraud, waste, or abuse to Care1st’s Hotline by calling toll-free (877) 837-6057 or the Corporate Compliance Officer at (323) 889 – 6638, extension 6202.
  5. Enforcement Standards through well publicized disciplinary guidelines – Care1st uses various avenues to encourage reporting of incidents of unethical or noncompliant behavior under the direction of the Corporate Compliance Officer via the annual mandatory general compliance training, newsletters, and department staff and committee meetings where compliance guidelines and issues are being included as regular topics.
  6. Monitoring and Auditing – Care1st must have procedures for effective internal monitoring and auditing.

    1. Care1st develops an annual compliance and auditing program that protects the Medicare program and beneficiaries from Part D fraud, waste and abuse and may help mitigate Care1st’s first-tier entities, downstream entities, and related entities’ liability resulting from potentially fraudulent, abusive or wasteful activities.
    2. The Special Investigations Unit (SIU) and the Compliance Audit Departments at Care1st work collaboratively with all the various departmental / functional areas within the organization to investigate, monitor, or audit potential or suspected noncompliant activities related to fraud, waste, or abuse.
  7. Corrective Action Procedures – Care1st corrects and mitigates noncompliant activities or violations committed and identified within set timelines. Detailed Corrective Action Plans (CAPs) describe the actions that will be taken, including a target timeframe, to rectify and complete the identified compliant violation.

1 License to Steal: How Fraud Bleeds America’s Health Care System – Updated Edition, Malcolm K. Sparrow. Westview Press, Boulder CO, 2000, p.126