Physicians and clinical laboratories that do business with other healthcare providers who have been denied enrollment in Medicare or had their enrollment revoked are under increased scrutiny
Efforts by the Centers for Medicare and Medicaid Services
(CMS) to crack down on fraud could soon be bolstered by artificial
intelligence (AI) tools, placing new pressure on medical
laboratories and anatomic pathology groups to ensure that their billing
practices are fully compliant with current federal “affiliations” regulations.
This is why, last October, CMS issued a Request
for Information (RFI) seeking feedback from vendors, providers, and
suppliers about the potential use of AI tools to identify cases of fraud,
waste, and abuse in billing for healthcare services. Statements from CMS
indicate that the agency plans to deepen its investigation into the affiliations
physicians and clinical laboratories have with healthcare providers that been
involved in fraudulent behavior within the Medicare program.
At present, CMS uses a variety of approaches to spot
improper claims, the RFI notes, including the use of human medical reviewers.
However, this is a costly process that allows review of less than 1% of claims.
AI tools would increase the speed and accuracy of those investigations
exponentially.
The RFI notes that AI technology could “help CMS identify
potentially problematic affiliations upon initial screening and through continuous
monitoring. One example would be a new tool or technology that would allow
easy, seamless access to state and local business ownership and registration
information that could improve CMS’ line-of-sight to potentially problematic
business relationships.”
In a blog post on the federal agency’s website, CMS Administrator Seema Verma (above) wrote that “Advanced analytics and artificial intelligence can perform rapid analysis and comparison of large-scale claims data and medical records that could allow for more expeditious, seamless and accurate medical review, and ultimately, improved payment accuracy.” [Photo copyright: Centers for Medicare and Medicaid Services.)
CMS’ New Affiliations Rule Affects Clinical Laboratories
Our sister publication, The Dark Report (TDR),
provided in-depth coverage of this rule, which allows CMS “to revoke or deny
enrollment if it finds that a provider’s or supplier’s current or previous
affiliations pose an undue risk of fraud.” (See TDR, “Labs
Must Respond to New CMS Anti-Fraud Rule,” October 14, 2019.)
“For too many years, we have played an expensive and
inefficient game of ‘whack-a-mole’ with criminals—going after them one at a
time—as they steal from our programs,” CMS Administrator Seema Verma
said in a
statement about the new rule. “These fraudsters temporarily disappear into
complex, hard-to-track webs of criminal entities, and then re-emerge under
different corporate names. These criminals engage in the same behaviors again
and again.”
As TDR reported, the rule defines four “disclosable
events” that trigger the disclosure requirements:
Uncollected debt to Medicare, Medicaid, or CHIP;
Payment suspension under a federal healthcare program;
Exclusion by the Office of Inspector General from participation in Medicare, Medicaid, or CHIP; and
Termination, revocation, or denial of Medicare, Medicaid, or CHIP enrollment.
If disclosure is required, CMS described five definitions of
an affiliation, using a five-year look-back:
Direct or indirect ownership of 5% or more in another organization;
A general or limited partnership interest, regardless of the percentage;
An interest in which an individual or entity “exercises operational or managerial control over, or directly conducts” the daily operations of another organization, “either under direct contract or through some other arrangement;”
When an individual is acting as an officer or director of a corporation; and
Any reassignment relationship.
One interesting consequence of these definitions is that
individuals or companies that invest and own an interest in a provider
organization that has one or more “disclosable events” would be flagged by the
provider at time of enrollment or re-enrollment in the Medicare program. Over
the years, some very prominent private equity companies have been investors and
owners of medical laboratory companies that owed money to Medicare or entered
into civil settlements with the federal government where the full amount of the
alleged overpayments was not recovered and the provider neither admitted nor
denied guilt. These affiliations would need to be disclosed and could be used
by CMS to deny enrollment in the Medicare program.
“Lab companies that engage in fraud and abuse—often paying illegal inducements to physicians to encourage them to order medically-unnecessary tests—distort the lab testing marketplace and capture lab test referrals that would otherwise go to compliant clinical labs and pathology groups,” stated Robert Michel, Editor-In-Chief of The Dark Report. “So, honest labs will recognize how the new rule can help suppress various types of fraud that constantly plague the clinical lab industry.” (See TDR, “Is New Medicare Affiliation Rule Good, Bad, or Ugly?” November 4, 2019.)
Other AI Applications in Healthcare
The CMS RFI also suggests other areas in which artificial
intelligence could help identify fraudulent activity, including real-time monitoring
of electronic
health records (EHR), risk
adjustment data validation (RADV) audits, and value-based payment systems.
“These tools hold the promise of more expeditious, seamless
and accurate review of chart documentation during medical review to ensure that
we are paying for what we get and getting what we pay for,” the RFI states.
“However, concerns about potential improper payments and bad actors remain. We
need to determine whether innovative new strategies, tools, and technologies
presently exist that can increase data accuracy and integrity and consequently
reduce improper payments.”
Clinical laboratories should not be surprised by any of this.
Artificial intelligence and machine learning are increasingly becoming vital
tools in today’s modern healthcare system. Nevertheless, lab leaders should
closely monitor CMS’ use of these technologies to root out fraud, as labs are
often caught up in their investigations.
Sale of respected laboratory information system company may be an early sign that investors believe clinical laboratories and pathology groups are ready to upgrade their LISs and add needed capabilities
In the past 10 years there has been little disruption to the
laboratory
information systems (LIS) market that clinical
laboratories and anatomic
pathology groups use. Yet, over that same 10-year period, almost every
hospital and physician group practice adopted an electronic
health system (EHR), primarily because of federal financial incentives that
encouraged such adoption.
For medical
laboratories and pathology groups, this widespread—nearly
universal—adoption of EHRs by the nation’s hospitals and physicians was
disruptive. Labs were required to expend resources building digital interfaces
to the EHRs of their parent hospitals and client physicians to support
electronic test ordering and test reporting.
However, because that wave of EHR adoption is now over,
clinical labs and pathology groups have an opportunity to assess the current
state of the health
information technology (HIT) that they use daily, primarily in the form of
the classic laboratory information system that handles nearly all the primary
functions needed to support testing and other operational needs.
This opportunity to help medical laboratories enhance and/or
upgrade the capabilities of their laboratory information systems may be one
motivation behind the recent sale of a well-known LIS company.
Private Equity Firm Buys Orchard Software
On Oct. 7, 2019, Orchard Software Corporation of Carmel,
Ind., announced its acquisition by Franciscan Partners, a private equity firm
based in San Francisco.
Orchard Software, founded in 1993, has grown steadily over
the past 20 years, primarily by serving physician office laboratories,
community hospital labs, and independent clinical laboratory companies. With each
stage of growth, Orchard added functionality to its LIS and related software
offerings and moved up-market to serve larger hospitals and larger labs.
The purchase price and the terms of the sale were not
announced. Orchard’s Founder, President and CEO, Rob Bush, will retire. The new
CEO is Billie Whitehurst, who came to Orchard from Netsmart Technologies, where she was Senior
Vice President. The remainder of Orchard’s management team will be kept in
place.
“Francisco Partners will provide capital and expertise to enable Orchard to grow at a faster pace and continue to develop its newer web-based products in an industry that has lagged behind in adoption of cloud-based software,” says Rob Bush (above), Orchard Software’s Founder and exiting CEO, in a press release. (Photo copyright: Twitter.)
Is the LIS Market Heating Up?
What makes the purchase of Orchard by a multi-billion-dollar
private equity company noteworthy is the fact that it is the first significant
transaction in the LIS sector probably since the mid-2000s, which saw several
significant mergers and acquisitions.
Other acquisitions or investments involving LIS companies
need to happen before it would be appropriate to say that investor interest in
the LIS sector is heating up. However, it is accurate to say that many
professional investors will be watching to see whether Franciscan Partners
succeeds with its investment in Orchard Software. If Orchard’s revenue and
operating profits increase substantially in the next few years, that may
encourage other investors to look for LIS companies and products that they can
buy.
If this were to happen, that would be a positive development
for both clinical laboratories and anatomic pathology groups, because these
investors would have a motive to add new functions and capabilities to their
LIS products. It would also wake up a sector of lab information technology that
has been relatively quiet for several years.
Another push for price transparency steps up pressure on medical laboratories and anatomic pathology groups to develop compliance strategies
Clinical
laboratories and anatomic
pathology groups are under increasing pressure to develop strategies for
making their test prices more accessible to patients. Those pressures are
likely to grow due to newly proposed federal regulations that aim to allow
patients to compare prices for healthcare services on their smartphones.
This new proposed rule comes less than a year after a rule
involving hospital prices was implemented. As of January 1, 2019, the federal
Centers for Medicare and Medicaid Services (CMS) required
US hospitals to post their prices online. Dark
Daily reported last year about the risks and opportunities posed by
that move.
“In our current health system, there is an asymmetry of information for patients. They have few ways if any to anticipate or plan for costs, lower or compare costs, and, importantly, measure their quality of care or coverage relative to the price they pay. Transparency in the price and cost of healthcare could help address some of those concerns by empowering patients with information they need to make informed decisions,” said Donald Rucker, MD (above), National Coordinator for Health Information Technology (ONC), in remarks delivered to the US Senate. (Photo copyright: ONC.)
Giving Patients Access to Their Health Information
In May, officials with those agencies discussed the
regulations in prepared remarks for a hearing of the HELP committee.
“A central purpose of the proposed [ONC] rule is to
facilitate patient access to their EHI on their smartphone, growing a nascent
patient- and provider-facing app economy,” he said, noting that this access is
impeded by a lack of interoperability between health information systems, as
well as restrictions on information exchange imposed by health IT developers.
The proposed rule will mandate use of common software
standards so that app developers can access health information systems from
different vendors. As a result, patients could choose their own apps to view
their data regardless of which electronic
health records (EHR) system their provider uses. The rule also includes
provisions for dealing with so-called “information blocking”
by vendors, Rucker noted.
If the proposed rule is implemented as currently written,
there would be a need for clinical laboratories and pathology groups to ensure
that their laboratory
information systems (LIS) meet the specifications of the new rule. This may
mean that, along with enabling two-way digital interfaces with physicians’
EHRs, labs also would need to be able to pass data to the apps and mobile
devices used by patients that are covered by the proposed new rule.
“ONC’s proposed rule primarily focuses on clinical data,” he
said. “However, advances in computer science and the maturity of data standards
are accelerating the convergence of medical data with billing and price data.
As such, the rule proposes to include such information as part of a patient’s
EHI that should be available for access, exchange, and use.”
Enabling cost comparisons will allow patients to make
more-informed decisions about their healthcare, Rucker added. But he
acknowledged that implementing this vision won’t be easy.
“Unfortunately, the complex and decentralized nature of how
payment information for healthcare services is currently created, structured,
and stored presents many challenges to achieving price transparency,” he said.
“This entire information chain is geared to retrospective payments rather than
prices.”
Rucker told the HELP committee that the [ONC] will be
seeking public input about how to capture price information and enable price
transparency. Once the rule is finalized and published, providers will have two
years to comply.
Medical Laboratories Need a Strategy for Providing Access
to Patient Records
The proposed CMS rule imposes requirements on payers to
provide electronic access to health claims and other information for their
enrollees.
In her prepared remarks
for the Senate HELP hearing, Kate Goodrich,
MD, Director of the Center for Clinical Standards and Quality (CCSQ) and
CMS Chief Medical Officer, said, “A core policy principle underlying our
proposals is that every American should be able, without special effort or
advanced technical skills, to see, obtain, and use all electronically available
information that is relevant to their health, care, and choices—of plans,
providers, and specific treatment options.”
That’s all well and good, however, as Fred Schulte, a senior
correspondent for Kaiser
Health News, wrote in his coverage of the two proposed rules, “Meeting
these goals could prove to be a tall order.”
He continued, “For well over a decade, federal officials
have struggled to set up a digital records network capable of widespread
sharing of medical data and patient records.” Not to mention the billions of
dollars already spent by the CMS and ONC incentivizing providers to implement
truly interoperable health
information exchange (HIE) systems nationwide.
Nevertheless, pressure for greater consumer data access and
price transparency will likely continue to build across the healthcare
industry, including on medical laboratories. Price transparency as a trend is
making steady forward progress, despite resistance by hospitals, physicians,
medical associations, and others.
All clinical laboratories should have a strategy to make lab
test prices readily available to patients. It is something that will become
common at some future point.
EMPIs may help clinical laboratories ensure their patients and medical records are properly matched with medical laboratory test results and specimens
Mix-ups between patients and their medical records, known in
the healthcare industry as “patient mismatching,” happen far too frequently in
hospitals and clinics worldwide. When surgery is involved, such mismatches can lead
to deadly errors. However, clinical
laboratories and pathology
groups also must take steps to ensure patients, their medical records, and their
biological specimens remain properly matched.
Once horrific incident in 2016 involved Saint Vincent Hospital in
Worcester, Mass. Believing they were operating on a patient with a kidney
tumor, surgeons mistakenly removed a healthy kidney from the wrong patient. The
cause of the patient mismatch was a mix-up with CT scans. The two patients
shared similar names, Managed
Care reported.
Sadly, patient mismatching is not a new or rare problem. Patient
mismatches often lead to delays, extra costs to fix duplicate information, and
tragically, unnecessary surgery and inappropriate care, Healthcare
Dive noted.
According to Managed Care, organizations working on
solutions include:
“Incorrect matches could result in patients getting the
wrong medicine, and failure to link records could lead to treatment decisions
made without access to up-to-date laboratory test results,” Pew noted in an issues
brief.
Pew and the MAeHC interviewed 18 hospital, medical practice,
and health information technology exchange leaders. The respondents admitted
that they are uncertain about the extent of the matching problem.
“They don’t know all the records that should be related and
thus cannot understand what percentage of those are unlinked,” the researchers
wrote.
Nonetheless, the researchers found that patient/record match
rates fall “far below the desired level” for effective data exchange among
organizations, Healthcare Dive reported.
For pathologists and clinical laboratory managers, the
Pew/MAeHC study had several key takeaways, such as:
“Match rates are far below the desired level for
effective data exchange.
“An increased demand for interoperability—the
exchange of electronic data among different systems—is fueling the desire for
improvements.
“Match rates are difficult to measure.
“The methods in which records are received can
affect match results.
“Different types of healthcare providers vary in
their perspectives on the extent of the problem.
“Effective opportunities exist for organizations
to more accurately link individuals’ health records.”
About $1,950 in medical care costs per patient during a
hospital stay, and $1.5 million annually in denied claims per hospital, are
associated with inaccurate patient identification, reported a survey conducted
by Black
Book Research.
“Patient matching is a fundamental function of being able to get the right records, for the right person, at the right time, so that timely decisions can be made about his or her health. There has to be a mechanism to ensure that you’re actually getting a copy of the records for the right person,” Mariann Yeager (above), CEO of the Sequoia Project told Modern Healthcare. The Sequoia Project advocates for nationwide health information exchange (HIE). (Photo copyright: Value-based Care Summit.)
Why Patient-Matching is Difficult
Respondents to the Pew study reported that challenges to
correctly matching patients with their records include:
Receiving patient records that an organization
did not expect;
Urban health systems serving patients through
multiple sites;
High costs associated with matching solutions;
and
Differences in how organizations capture, use,
and link medical records.
When humans manually input patient data, Mary Elizabeth
Smith could be listed as M.E. Smith or Mary E. Smith or even Liz Smith. Such
data, when filed differently, can result in duplicate records for the same person,
or, as St. Vincent’s found out, patient mismatches that have dire consequences,
Managed Care noted.
“If there’s some kind of error in entering fields (name,
address, date of birth), either when the patient’s coming in or in a previous
entry, the matching can go awry,” Brendan Watkins,
Administrative Director of Enterprise Analytics at Stanford Children’s Health,
told Modern Healthcare.
Patient-Matching Solutions at Clinical Laboratories
Clinical laboratories also have tackled patient-mismatching
and have devised processing software solutions that ensure patients are
correctly identified and matched with the appropriate records and specimens.
Other solutions suggested by respondents to a previous 2018
Pew survey include:
Unique patient
identifier: Adoption of a patient identification number could help matching
efforts, though patients have expressed privacy concerns. The idea is to use
smartphones to validate patient data using digit codes. However, respondents
told Pew, not everyone has a smartphone.
Data
standardization: Respondents said standardization of data elements and
formatting could impact match rates. But agreement on which elements to use for
the match would be needed.
Referential
matching: Healthcare providers could follow the banking industry and use
outside sources, such as credit bureaus, to verify addresses and other data.
Respondents to the Pew survey balked at the cost.
With advancements in technology and interoperability,
medical laboratory leaders and other healthcare leaders may soon be expected to
achieve patient and record match rates of 100%. Pathology laboratories with
EMPIs and other solutions may be well prepared to meet those challenges.
This is important for clinical laboratory leaders to watch, because medical labs often interface with hospital EHRs to exchange vital patient data, a key component of complying with Medicare’s EHR incentive programs. If claims of interoperability are shown to be false, could labs engaged with those hospital systems under scrutiny be drawn into the DOJ’s investigations?
Violating the False Claims Act
In May, Coffey Health System (CHS), which includes Coffey County Hospital, a 25-bed critical access hospital located in Burlington, Kan., agreed to pay the US government a total of $250,000 to settle a claim that it violated the False Claims Act.
CHS’ former CIO filed the qui tam (aka, whistleblower) lawsuit, which allows individuals to sue on behalf of the government and share in monetary recovery. He alleged that CHS provided false information to the government about being in compliance with security standards to receive incentive payments under the EHR Incentive Program.
According to a DOJ press release, “the United States alleged that Coffey Health System falsely attested that it conducted and/or reviewed security risk analyses in accordance with requirements under a federal incentive program for the reporting periods of 2012 and 2013. The government contended that the hospital submitted false claims to the Medicare and Medicaid Programs pursuant the Electronic Health Records (EHR) Incentive Program.”
“Medicare and Medicaid beneficiaries expect that providers ensure the accuracy and security of their electronic health records,” said Stephen McAllister (above), United States Attorney for the District of Kansas, in the DOJ press release. “This office remains committed to protecting the federal health programs and to hold accountable those whose conduct results in improper payments.” (Photo copyright: US Department of Justice.)
The Recovery Act allocated $25 billion to incentivize healthcare professionals and facilities to adopt and demonstrate meaningful use (MU) of electronic health records by January 1, 2014. The federal Centers for Medicare and Medicaid Services (CMS) released the incentive funds when providers attested to accomplishing specific goals set by the program.
The website of the Office of the National Coordinator for Health Information Technology (ONC), HealthIt.gov, defines “meaningful use” as the use of digital medical and health records to:
Improve quality, safety, efficiency, and reduce
health disparities;
Engage patients and their families;
Improve care coordination and population and
public health; and
Maintain privacy and security of patient health
information.
The purpose of the HITECH Act was to address privacy and security concerns linked to electronic storage and transference of protected health information (PHI). HITECH encourages healthcare organizations to update their health records and record systems, and it offers financial incentives to institutions that are in compliance with the requirements of the program.
When eligible professionals or eligible hospitals attest to being in compliance with Medicare’s EHR incentive program requirements, they can file claims for federal funds, which are paid and audited by the Department of Health and Human Services (HHS) through Medicare and Medicaid.
Institutions receiving funds must demonstrate meaningful use
of EHR records or risk potential penalties, including the delay or cancellation
of future payments and full reimbursement of payments already received. In
addition, false statements submitted in filed documents are subject to criminal
laws and civil penalties at both the state and federal levels.
EHR Developers Under Scrutiny by DOJ
EHR vendors also have been investigated and ordered to make
restitutions by the DOJ.
In February, Greenway Health, a Tampa-based EHR developer, agree to pay $57.25 million to resolve allegations related to the False Claims Act. In this case, the government contended that Greenway obtained certification for its “Prime Suite” EHR even though the technology did not meet the requirements for meaningful use.
And EHR vendor eClinicalWorks paid the government $155 million to settle allegations under the False Claims Act. The government maintained that eClinicalWorks misrepresented the capabilities of their software and provided $392,000 in kickbacks to customers who promoted its product.
Legal cases such as these demonstrate that the DOJ will
pursue both vendors and healthcare organizations that misrepresent their
products or falsely attest to interoperability under the terms laid out by
Medicare’s EHR Incentive Program.
Clinical laboratory leaders and pathology groups should carefully
study these cases. This knowledge may be helpful when they are asked to create
and maintain interfaces to exchange patient data with client EHRs.
