Healthplan Unethical Behavior, Bad Faith and Fraud
A Discussion Paper
Introduction
Fraud poses a significant threat to the integrity, financial stability, and operational effectiveness of healthcare systems. The two arguments provided below address this issue from different but complementary perspectives. The first argument, "What is Healthplan fraud in the context of contracting with purchasers for the services of mental and behavioral health provider practices?" outlines various fraudulent practices in which health plans engage against purchasers, physicians, and mental health professionals. It provides detailed examples of billing and claims fraud, enrollment and eligibility fraud, kickbacks, prescription and pharmacy fraud, service provision fraud, and more. This comprehensive overview highlights a wide range of deceptive practices used to create unauthorized financial gain, emphasizing the need for robust internal controls and vigilant monitoring.
In contrast, the second document focuses on the pivotal role of Independent Certified Internal Auditors (CIAs) in detecting and preventing healthcare fraud. It details the strategies and processes used by CIAs to identify potential fraud, including comprehensive risk assessments, advanced data analytics, and detailed audit procedures. The document emphasizes the importance of CIAs' independence, expertise, and adherence to professional standards in maintaining the integrity and financial stability of healthcare organizations. It also highlights the crucial role of CIAs in ensuring compliance with regulations, enhancing transparency, and building stakeholder trust.
Together, these documents provide a thorough understanding of the challenges posed by healthcare fraud and the essential measures needed to combat it. They underscore the importance of rigorous oversight, transparent policies, and the need to engage the expertise of CIAs to foster a fair and effective healthcare system. The insights offered in these documents are particularly valuable for mental health professionals, who face unique challenges in navigating value-based payment contracts and ensuring fair treatment within the healthcare framework. By integrating these perspectives, stakeholders can better safeguard the integrity and sustainability of healthcare systems.
What is Healthplan Fraud in the Context of Contracting with Purchasers for the Services of Mental and Behavioral Health Provider Practices?
Healthcare fraud involves the intentional deception or misrepresentation made by an individual or entity in a healthcare transaction that could result in unauthorized benefit or payment. The misrepresentation does not need to be intentional. This can include false claims, kickbacks, misrepresentation of services, and fraudulent billing practices. When a health plan misrepresents the reliability, validity, usefulness and value of its contracts to secure funding from a State, and their contracts are based on misleading and unethical terms offered to providers of Medicare, Medicaid, or other government funded healthcare programs, it constitutes healthcare fraud. Such fraudulent activity involves several layers.
By misrepresenting contract terms and requirements, a health plan is submitting false information to obtain funds from state or federal programs. This misrepresentation may include inflated claims about a contract’s compliance with value-based care standards or the scope of services provided. Additionally, offering misleading contracts to providers, which leads them to bill government programs based on false premises, further extends the fraudulent activity. Providers may unknowingly submit claims for services under terms that are not accurate or ethical. The health plan's actions will have led to the improper allocation of taxpayer funds, diverting money from legitimate healthcare services to a fraudulent scheme.
Healthplans can falsely represent the effectiveness, compliance, and outcomes associated with their value-based contracts to secure funding and or public contracts. This misrepresentation can include exaggerated claims about the health plan’s adherence to industry and care standards and the benefits such adherence can provide. Such exaggerated claims are used to justify the receipt of state or federal funds. The health plan might offer contracts to providers that are inherently misleading, contracts that promise certain benefits or reimbursement rates that are not actually delivered. Being misled, providers submit claims based on the false premises, affecting the integrity of claims submitted to Medicare, Medicaid, and other government programs. Further, health plans may manipulate data and performance metrics to favor their financial interests. By selectively withholding comprehensive data to present skewed information, a health plan can create a false narrative to support their funding claims, which impacts negotiations and contractual agreements with providers and government programs.
Examples of health care fraud can include a health plan falsely reporting compliance with value-based care standards to obtain funding from state programs, despite knowing that their contracts do not meet those standards. Healthplans may also offer contracts to providers that misrepresent reimbursement rates and terms, causing providers to unknowingly submit fraudulent claims to government programs. Moreover, health plans might train AI systems to audit provider records in a biased manner, emphasizing cost-saving measures over appropriate clinical outcomes, leading to unjust denials of legitimate claims as well as creating financial incentives based on false data.
The described actions by Healthplans, including misrepresenting the nature of contracts to obtain state funding and offering misleading and unethical contracts to providers, constitute healthcare fraud. Fraudulent activity both diverts taxpayer dollars from legitimate healthcare services and undermines the integrity of the healthcare system. Identifying and addressing such fraud is essential to protect public resources and ensure opportunity for provision of ethical and effective healthcare services.
Discussion Outlines
Fraud Perpetrated by Healthplans on Mental Health Professionals
Summary
Healthcare fraud perpetrated by Healthplans on mental health professionals involves a range of deceptive practices designed to reduce payments and increase profits at the expense of providers. These practices undermine the financial stability and operational effectiveness of mental health professionals' practices, compromise patient care, and erode trust in the healthcare system. Addressing such fraud requires rigorous oversight, transparent policies, and strong advocacy for mental health professionals' rights and fair treatment.
1. Delayed Payments:
Unjustified Payment Delays: Deliberately delaying payments for services rendered to improve the health plan’s cash flow.
Administrative Hurdles: Creating unnecessary administrative processes that delay the payment cycle.
2. Down coding:
Improper Down coding: Reimbursing mental health professionals at a lower rate by changing the billing codes to less expensive ones.
Code Manipulation: Systematically altering codes to minimize reimbursement for provided services.
3. Denial of Legitimate Claims:
Unwarranted Denials: Denying valid claims without legitimate reasons to avoid payment.
Pre-Authorization Issues: Requiring unnecessary pre-authorizations and subsequently denying claims based on these requirements.
4. Retrospective Audits and Recoupments:
Excessive Audits: Conducting frequent and unreasonable audits to recover previously paid amounts.
Clawbacks: Recouping payments from mental health professionals based on minor or technical documentation errors.
5. Manipulating Risk Adjustment Scores:
Falsifying Risk Data: Providing false information to manipulate risk scores, affecting reimbursement rates.
Selective Data Reporting: Reporting only favorable data that benefits the Healthplan while disadvantaging mental health professionals.
6. Network Manipulation:
Narrow Networks: Restricting network size without informing mental health professionals, limiting their patient base and revenue.
Ghost Networks: Listing mental health professionals in directories who are not actually contracted or accessible, misleading patients and professionals.
7. Contract Misrepresentation:
Ambiguous Contract Terms: Using vague or complex language to mislead professionals about reimbursement rates and obligations.
Unilateral Contract Changes: Making changes to contract terms without adequately informing or negotiating with mental health professionals.
8. Inaccurate Provider Directories:
False Information: Including incorrect information in directories that misleads patients about available services.
Non-Updating Directories: Failing to update directories, leading to misinformation and patient misdirection.
9. Quality Measure Manipulation:
Skewed Performance Metrics: Using biased metrics to evaluate performance, leading to unfair penalties or reduced reimbursements.
Selective Reporting: Reporting only favorable outcomes and omitting data that could negatively impact the Healthplan's evaluation.
10. Non-Compliance with Timely Payment Laws:
Ignoring Prompt Payment Laws: Violating state or federal laws requiring timely payment for services provided.
Interest Withholding: Not paying interest on delayed payments as required by law.
11. Fraudulent Utilization Management:
Unnecessary Authorizations: Requiring unnecessary prior authorizations to create barriers to care.
Denial of Services: Inappropriately denying services to reduce costs, even when medically necessary.
12. Excessive Administrative Burdens:
Bureaucratic Obstacles: Imposing excessive administrative requirements to discourage claims submission or to justify denials.
Complex Claims Processes: Creating overly complex claims submission processes to increase the likelihood of errors and denials.
13. Financial Coercion:
Pressure for Discounts: Pressuring mental health professionals to accept lower reimbursement rates under threat of exclusion from networks.
Non-Negotiable Terms: Presenting "take it or leave it" contracts with unfavorable terms for professionals.
14. Selective Patient Steering:
Directing High-Cost Patients: Steering high-cost or high-risk patients to specific providers without proper compensation.
Cherry-Picking Patients: Favoring certain patients based on profitability and directing them away from certain professionals.
15. Inaccurate Claims Processing:
System Errors: Using claims processing systems that frequently make errors, leading to underpayments or denials.
Inconsistent Processing: Applying inconsistent claims processing rules to create confusion and reduce payouts.
16. Data Withholding:
Lack of Transparency: Failing to share relevant data that could help improve patient care and contract negotiations.
Selective Data Sharing: Sharing only data that supports the Healthplan's financial interests.
17. False Incentive Programs:
Misleading Bonus Structures: Promising performance bonuses that are difficult to achieve due to unreasonable or hidden criteria.
Unrealistic Targets: Setting performance targets that are unrealistic or unattainable to avoid paying bonuses.
18. Denial of Mental Health Parity:
Non-Compliance with Parity Laws: Failing to comply with mental health parity laws, resulting in unequal coverage for mental health services compared to medical/surgical benefits.
Underpayment for Services: Reimbursing mental health services at lower rates than equivalent medical services.
19. Discriminatory Reimbursement Practices:
Biased Payment Models: Using reimbursement models that unfairly disadvantage mental health professionals.
Unequal Reimbursement Rates: Paying lower rates for mental health services compared to similar medical services.
20. Failure to Update Payment Schedules:
Outdated Rates: Using outdated payment schedules that do not reflect current costs of providing care.
Inadequate Rate Increases: Failing to adjust reimbursement rates to keep pace with inflation and increased costs.
Value-Based Payment Contracts: How Healthplans can Commit Fraud Against Mental Health Professionals
Summary
Value-based payment contracts, designed to enhance the quality of care and control costs, can be manipulated by Healthplans in ways that undermine the financial stability and operational integrity of mental health professionals. These manipulative practices compromise the principles of value-based care, reduce the quality of patient care, and foster an adversarial relationship between Healthplans and providers. Below are detailed examples of how Healthplans commit fraud against mental health professionals within the context of value-based payment contracts.
The detailed examples of contracting and negotiations by Moda for value-based payment contracts reveal a pattern of manipulative practices. These practices prioritize financial gain for Healthplans at the expense of fair compensation, quality patient care, and professional integrity. Addressing such fraud requires stringent oversight, transparent policies, and strong advocacy for ethical treatment of mental health professionals within value-based payment frameworks.
1. Manipulating Performance Metrics
Falsified Data: Healthplans may provide inaccurate or manipulated data to create the illusion of improved health outcomes. By falsifying performance data, they can avoid paying performance bonuses to mental health professionals, even when those professionals have met the actual criteria.
Selective Reporting: Healthplans might report only favorable outcomes while omitting or hiding data that reflects poorly on their performance. This selective reporting skews the evaluation of mental health professionals' performance, unfairly reducing their compensation.
2. Unfair Risk Adjustment
Artificially Lowering Risk Scores: To minimize payments, Healthplans may manipulate risk adjustment data to understate the severity of patient conditions. This practice leads to lower reimbursement rates for mental health professionals, who are unfairly compensated for the complexity and severity of the cases they manage.
Selective Risk Adjustment: Applying risk adjustments inconsistently allows Healthplans to benefit financially. They may adjust scores in ways that reduce their financial obligations while presenting a facade of balanced risk distribution.
3. Payment Withholding
Unjustified Payment Holds: Healthplans might withhold payments for achieved performance targets without legitimate reasons. This tactic is used to delay financial compensation, creating cash flow issues for mental health professionals.
Delayed Incentive Payments: Even when performance targets are met, Healthplans may delay bonus or incentive payments beyond agreed-upon timeframes. This delay helps manage their cash flow at the expense of mental health professionals’ financial stability.
4. Retrospective Adjustments and Clawbacks
Unfair Retrospective Reviews: Conducting retrospective reviews with the primary goal of finding reasons to claw back previously made payments undermines trust. These reviews often scrutinize past claims for minor issues to justify recoupment of funds, creating financial uncertainty for mental health professionals.
Clawback on Technicalities: Recouping payments due to minor technical or clerical errors, rather than substantive issues, is another tactic used by Healthplans. This practice penalizes mental health professionals for trivial mistakes that do not impact the quality of care provided.
5. Undue Administrative Burdens
Excessive Reporting Requirements: Healthplans may impose onerous documentation and reporting requirements that are not necessary for effective management of value-based contracts. These burdens divert time and resources away from patient care, frustrating mental health professionals.
Complex Compliance Processes: Creating unnecessarily complex compliance processes can lead to inadvertent non-compliance and penalties. Mental health professionals may struggle to navigate these complexities, resulting in financial and operational challenges.
6. Misleading Contract Terms
Ambiguous Performance Criteria: Using vague or ambiguous performance criteria makes it difficult for mental health professionals to understand or meet expectations. This ambiguity can be exploited to reduce payments and avoid awarding performance bonuses.
Unilateral Contract Changes: Healthplans might change contract terms unilaterally without adequate notice or negotiation. These changes often disadvantage mental health professionals, who are left with little recourse.
7. Manipulating Utilization Data
Data Suppression: Suppressing or manipulating utilization data to show lower than actual usage of services impacts shared savings calculations. This practice benefits Healthplans financially while penalizing mental health professionals.
Misrepresentation of Service Usage: Misrepresenting the usage of services to skew performance evaluations and payments is another fraudulent tactic. This misrepresentation undermines the integrity of performance assessments.
8. Inappropriate Denials of Care
Unjustified Service Denials: Denying authorization for necessary services to artificially enhance cost savings compromises patient care. Healthplans may deny services without legitimate reasons, impacting treatment outcomes.
Pre-Authorization Manipulation: Using pre-authorization requirements to delay or deny necessary treatments and procedures is a tactic that creates barriers to care. This manipulation reduces costs at the expense of patient health.
9. Inaccurate Quality Measure Implementation
Inconsistent Quality Metrics: Applying quality measures inconsistently or unfairly manipulates performance outcomes. Mental health professionals may be penalized based on skewed metrics that do not accurately reflect their performance.
Invalid Quality Indicators: Using quality indicators that do not accurately reflect the quality of care provided undermines the evaluation process. These indicators can be manipulated to reduce payments to mental health professionals.
10. Bias in Benchmark Setting
Unrealistic Benchmarks: Setting performance benchmarks that are unachievable or not based on realistic clinical practice ensures that mental health professionals fail to meet them. This practice reduces compensation and performance bonuses.
Inconsistent Benchmark Application: Applying benchmarks inconsistently across different providers creates an unfair competitive landscape. Mental health professionals may be unfairly penalized or disadvantaged.
11. Selective Patient Attribution
Cherry-Picking Patients: Healthplans may selectively attribute low-risk patients to mental health professionals to skew performance results. This practice ensures favorable outcomes for the Healthplan while disadvantaging professionals who manage more complex cases.
Patient Steering: Steering high-risk or high-cost patients away from certain providers enhances the Healthplan's apparent performance. This manipulation undermines the integrity of patient care and performance evaluations.
12. Financial Coercion
Pressure to Lower Costs: Healthplans may pressure mental health professionals to lower costs in ways that compromise patient care, such as reducing necessary sessions or interventions. This coercion prioritizes cost savings over patient outcomes.
Incentive Manipulation: Designing incentive structures that push mental health professionals to prioritize cost savings over patient outcomes undermines the quality of care provided.
13. Data Withholding
Non-Disclosure of Key Data: Failing to share critical data with mental health professionals hinders their ability to accurately assess and improve their performance. This lack of transparency benefits the Healthplan financially.
Selective Data Sharing: Sharing only data that supports the Healthplan's financial goals skews performance assessments and financial compensation.
14. Inadequate Support for Implementation
Lack of Training: Not providing adequate training or resources to help mental health professionals implement value-based care models effectively creates implementation challenges. Professionals are left to navigate complex systems without proper guidance.
Insufficient Technological Support: Failing to provide necessary technological infrastructure to support data collection and reporting requirements hinders the ability of mental health professionals to comply with value-based contracts.
15. Conflict of Interest in Auditing
Biased Internal Audits: Using internal auditors with conflicts of interest to evaluate performance compromises the integrity of the auditing process. Mental health professionals may be unfairly assessed and penalized.
Unfair External Audits: Hiring external auditors who are incentivized to find errors or issues that lead to financial penalties creates an adversarial relationship. Mental health professionals may face unjust penalties.
16. Denial of Shared Savings
Unjustified Savings Denial: Denying mental health professionals their fair share of savings generated through efficient care management undermines trust. This practice reduces financial compensation unfairly.
Complex Savings Calculation: Using overly complex formulas for calculating shared savings leads to disputes and reduced payments to mental health professionals. This complexity benefits the Healthplan financially.
17. Opaque Contract Negotiations
Lack of Transparency: Not providing clear information about contract terms and performance expectations during negotiations disadvantages mental health professionals. They are left with limited understanding of their obligations and compensation.
Non-Negotiable Terms: Presenting "take it or leave it" contracts that do not allow for fair negotiation forces mental health professionals to accept unfavorable terms. This practice undermines fair contracting principles.
18. Excessive Utilization Review
Overly Strict Utilization Review: Implementing overly stringent utilization reviews results in unnecessary denials of care. This practice reduces costs at the expense of patient health and provider compensation.
Frequent Audits: Conducting frequent and disruptive audits hinders the ability of mental health professionals to provide care. These audits are used to justify financial penalties and reduce compensation.
18. Performance Penalty Manipulation
Unfair Penalties: Imposing unfair penalties for not meeting performance metrics that were not clearly defined or communicated undermines trust. Mental health professionals may face financial penalties unjustly.
Penalty Bias: Applying penalties selectively to disadvantage certain mental health professionals creates an unfair competitive landscape. This bias benefits the Healthplan financially.
19. Inaccurate Attribution of Non-Compliance
False Non-Compliance Reports: Reporting mental health professionals as non-compliant with contract terms without sufficient evidence undermines their professional reputation. This practice is used to justify reduced payments.
Mislabeling Performance Issues: Mislabeling performance issues to justify reduced payments or penalties unfairly disadvantages mental health professionals. This misrepresentation benefits the Healthplan financially.
DISCLAIMER and PURPOSE: This discussion document is intended for training, education, and or research purposes only. The information contained herein is based on the data and perspectives available at the time of writing. It is subject to revision as new information and viewpoints emerge.
For more information see: https://www.mentorresearch.org/disclaimer-and-purpose