Medicare Fraud: Do MCOs Have Accountability Too?

Dr. Isaac Kojo Anakwah Thompson, a Florida primary care physician, was sentenced in July 2016 to 4 years in prison and a subsequent two years of supervised release. Dr. Thompson pled guilty to health care fraud.  He was further ordered to pay restitution in the amount of $2,114,332.33. Ouch!! What did he do?

According to the Department of Justice, Dr. Thompson falsely reported that 387 of his clients suffered from ankylosing spondylitis when they did not.

Question: How does faking a patient’s disease make a physician money???

Answer: Hierarchal condition category (HCC) coding. Wait, what?

Basically, Medicare Advantage assigns HCC coding to each patient depending on the severity of their illnesses. Higher HCC scores equals substantially higher monthly capitation payments from Medicare to the managed care organization (MCO). In turn, the MCO will pay physicians more who have more extremely sick patients (higher HCC codes).

Ankylosing spondylitis is a form of arthritis that causes inflammation and damage at the joints; eventually, the inflamed spinal joints can become fused, or joined together so they can’t move independently. It’s a rare disease, affecting 1 in 1000 people. And, importantly, it sports a high HCC code.

In this case, the Office of Inspector General (OIG) found it odd that, between 2006-2010, Dr. Thompson diagnosed 387 Medicare Advantage beneficiaries with ankylosing spondylitis and treated them with such rare disease. To which, I say, if you’re going to defraud the Medicare system, choose common, fabricated diseases (kidding – it’s called sarcasm – I always have to add a disclaimer for people with no humor).

According to the Department of Justice, none or very few of Dr. Thompson’s 387 consumers actually had ankylosing spondylitis.

My issue is as follows: Doesn’t the managed care organization (MCO) share in some of the punishment? Shouldn’t the MCO have to repay the financial benefit it reaped from Dr. Thompson?? Shouldn’t the MCO have a duty to report such oddities?

Let me explain:

In Florida, Humana acted as the MCO. Every dollar that Dr. Thompson received was funneled through Humana. Humana would pay Dr. Thompson a monthly capitation fee from Medicare Advantage based on his patient’s hierarchal condition category (HCC) coding. Increasing even just one patient’s HCC code means more bucks for Dr. Thompson. Remember, according to the DOJ, he increased 387 patients’ HCC codes.

Dr. Thompson reported these diagnoses to Humana, which in turn reported them to Medicare. Consequently, Medicare paid approximately $2.1 million in excess capitation fees to Humana, approximately 80% of which went to Dr. Thompson.

In this case, it is reasonable to expect that Humana had knowledge that Dr. Thompson reported abnormally high HCCs for his patients. For comparison, ankylosing spondylitis has an HCC score of 0.364, which is more than an aortic aneurysm and three times as high as diabetes. Plus, look at the amount of money that the MCO paid Dr. Thompson. Surely, it appeared irregular.

What, if anything, is the MCO’s duty to report physicians with an abnormally high number of high HCC codes? If you have knowledge of someone committing a crime and you do nothing, isn’t that called aiding and abetting?

With the publication of the Yates memo, I expect to see CMS holding MCOs and other state agencies accountable for the actions of its providers. Not to say that the MCOs should actively, independently investigate Medicare/caid fraud, but to notify the Human Services Department (HSD) if abnormalities exist, especially if as blatant as one doctor with 387 patients suffering from ankylosing spondylitis.

About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on July 27, 2016, in Audits, CMS, Credible Allegations of Fraud, Criminal Medicaid Fraud, DHHS, Doctors, Federal Government, Federal Law, Fraud, Gordon & Rees, Health Care Providers and Services, HHS, Innocent Until Proven Guilty, Knicole Emanuel, Lawsuit, Legal Analysis, Managed Care, MCO, Medicaid Attorney, Medicaid Audits, Medicaid Providers, Medicare, Medicare Administrative Contractor, Medicare Attorney, Medicare Audits, Medicare RAC, Medicare Reimbursement Rates, Physicians, Primary Care, Primary Care Physicians, Prosecution, RAC Audits, Regulatory Audits and tagged , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. 2 Comments.

  1. Ronald Hirsch, MD

    Excellent article. I wrote about the same thing recently http://www.racmonitor.com/rac-enews/2106-hccs-higher-scores-higher-capitation-snags-florida-doctor.html and included the quote from a media source that Humana is “not without blame.” (But it appears we have different HCC calculators- I got 0.374 for ankylosing spondylitis)

    • Thank you, Dr. Hirsh! Much appreciated. I just looked at your article, and I see the discrepancy between the .374 and .364. I used the internet to get the HCC code; I obviously did not know it by heart. The website I used definitely said .364. Do you have a way to determine which one is correct?

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