Fundamentals of Medicare

Section 3: Fraud and Abuse

Office of Inspector General

Table of Contents

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Office of Inspector General

The IG Act of 1978, as amended, creates independent audit and investigative units called OIG, at over 60 federal agencies. The mission of the OIG, as spelled out in the Act is to:

  • conduct and supervise independent and objective audits and investigations relating to agency programs and operations;
  • promote economy, effectiveness, and efficiency within the agency;
  • prevent and detect fraud, waste, and abuse in agency programs and operations;
  • review and make recommendations regarding existing and proposed legislation and regulations relating to agency programs and operations; and
  • keep the agency head and the Congress fully and currently informed of problems in agency programs and operations.

To ensure objectivity, the IG Act empowers inspectors general with:

  • independence to determine what reviews to perform;
  • access to all information necessary for the reviews; and
  • authority to publish findings and recommendations based on the reviews.

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Compliance Programs

The OIG promotes voluntarily developed and implemented compliance programs for the health care industry. The compliance program guidance given by the OIG is intended to assist providers to develop effective internal controls that promote adherence to applicable federal and state law, and the program requirements of federal, state and private health plans. The adoption and implementation of voluntary compliance programs significantly advance the prevention of fraud, abuse and waste in these health care plans while at the same time furthering the fundamental mission of all hospitals, which is to provide quality care to patients. The OIG provides a set of guidelines for providers interested in implementing a compliance program to consider depending upon their applicability to the facility.

Fundamentally, compliance efforts are designed to establish a culture within a facility that promotes prevention, detection and resolution of instances of conduct that do not conform to federal and state law, and health care program requirements, as well as the facility’s ethical and business policies. In practice, the compliance program should effectively articulate and demonstrate the organization’s commitment to the compliance process. While it may require significant additional resources or reallocation of existing resources to implement an effective compliance program, the OIG believes that the long-term benefits of implementing the program outweigh the costs.

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Benefits of a Compliance Program

Compliance programs make good business sense in that they help a provider fulfill its fundamental care giving mission to patients and the community, and assist it in identifying weaknesses in internal systems and management. Other important potential benefits include the ability to:

  • Concretely demonstrate to employees and the community at large the provider’s strong commitment to honest and responsible provider and corporate conduct.
  • Provide a more accurate view of employee and contractor behavior relating to fraud and abuse.
  • Identify and prevent criminal and unethical conduct.
  • Improve the quality of patient care.
  • Create a centralized source for distributing information on health care statutes, regulations and other program directives related to fraud and abuse and related issues.
  • Develop a methodology that encourages employees to report potential problems.
  • Develop procedures that allow the prompt, thorough investigation of alleged misconduct by corporate officers, managers, employees, independent contractors, physicians, other health care professionals and consultants.
  • Initiate immediate and appropriate corrective action.
  • Through early detection and reporting, minimize the loss to the government from false claims, and thereby reduce the provider's exposure to civil damages and penalties, criminal sanctions, and administrative remedies, such as program exclusion.

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Elements of A Compliance Program

The OIG believes that every effective compliance program must begin with a formal commitment by the governing body to include all of the applicable elements listed below. These elements are based on the seven steps of the Federal Sentencing Guidelines. A good faith and meaningful commitment on the part of the administration, especially the governing body and the CEO, will substantially contribute to a program’s successful implementation.

At a minimum, comprehensive compliance programs should include the following seven elements:

  1. Implementation of written policies, procedures and standards of conduct.
  2. Designation of a compliance officer.
  3. Development of training and education programs.
  4. Creation of a hotline or other measures for receiving complaints and procedures for protecting callers from retaliation.
  5. Performance of internal audits to monitor compliance.
  6. Enforcement of standards through well-publicized disciplinary directives.
  7. Prompt corrective action in response to detected offenses.

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OIG Compliance Guidance

The OIG has issued compliance program guidance for specific provider types. The documents can be found on the OIG website. Currently there are guidelines available for the following:

  • Hospitals
  • HHA
  • Clinical laboratories
  • Third-party medical billing companies
  • DMEPOS industry
  • Hospices
  • Nursing facilities
  • Individual and small group physician practices

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Self-Discovery of An Overpayment

As participants of Medicare, providers have an ethical and legal duty to insure the integrity of their submissions to Medicare. When a provider discovers that they have received an overpayment, the provider has two avenues that can be used to report and refund the overpayment.

  1. If the overpayment is a result of matters that, in the provider’s reasonable assessment, potentially violate federal criminal, civil or administrative laws, the issue should be reported to the OIG following their self-disclosure protocol.
  2. For matters exclusively involving overpayments or errors that do not suggest that violations of law have occurred, the provider should bring the overpayment to the attention of the intermediary.

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Self-Disclosure to the OIG

The OIG is committed to creating an atmosphere that encourages health care providers to come forward to the government voluntarily when they uncover evidence of fraudulent conduct within their organization. A detailed self-disclosure protocol was published by the OIG in October 1998. The protocol sets out recommended investigative and audit measures that a provider should undertake as part of a disclosure to the OIG.

Providers that self-disclose receive expedited review of their disclosures, and, where appropriate, favorable treatment in the resolution of the matter. The OIG looks to see whether the provider took appropriate steps to prevent and detect the misconduct and whether there is a likelihood that the same or similar abuse of Medicare will reoccur.

Where the best interests of the programs are served by allowing the provider that has engaged in serious misconduct to continue participating in the health care programs, the OIG generally will require that the provider enter into an agreement to adopt certain integrity measures. Among the relevant factors considered in crafting a Corporate Integrity Agreement (CIA) are the severity and extent of the underlying misconduct, the nature and resources of the provider, the provider’s existing compliance capabilities, and whether the case resulted from a self-disclosure.

The OIG considers the provider’s current compliance program when they negotiate the appropriate terms of a CIA. The more a provider can point to tangible, positive outcomes stemming from its compliance efforts, the more reliance the OIG places on those measures and integrate them into a CIA. The best evidence that a provider’s compliance program is operating effectively occurs when the provider, through its compliance program, identifies problematic conduct, takes appropriate steps to remedy the conduct and prevent it from recurring, and makes a full and timely disclosure of the misconduct to appropriate authorities. When liability due to the False Claims Act results from such a disclosure, the OIG can be more flexible in considering the terms of a CIA in light of the demonstrated effectiveness of the provider’s compliance program.

To request acceptance into the OIG Self-Disclosure Program, a provider must contact the OIG in writing at the following address. Submissions by fax, or other electronic media (such as email) will not be accepted.

Assistant Inspector General for Investigative Operations
Office of Inspector General
Department of Health and Human Services
Independence Avenue SW
Cohen Building, Room 5409
Washington, DC 20201

More information about self-disclosures can be obtained on the OIG website.

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Voluntary Refunds to the MAC

A voluntary refund is when you have self-identified you have been overpaid and need to refund the excess funds to Medicare.

Whenever possible, the refund to Medicare should be completed through the claims system by initiating an adjustment. The PCC should be contacted if you are unsure whether or not you are able to initiate the claim adjustment as well as if you have questions about how to adjust a claim. If initiating the adjustment is not possible, the Voluntary Refund form should be completed.

You have two options:

  1. Submit a check with the voluntary refund form. When the claim(s) is adjusted, Medicare will apply the monies to the overpayment.
  2. Submit the voluntary refund form without a check and when the claim(s) is adjusted, Medicare will take back the overpayments through the offset process.

Completing the Overpayment Recovery Voluntary Refund Form

  1. Complete the form in its entirety as missing information will delay processing.
  2. Be sure the form is mailed to the appropriate address listed at the bottom of the form.
  3. Include any additional documentation that would enable processing of the request.

You may access the form electronically on our website, Overpayment > Complete a Voluntary Refund, then choose the form on the right for the appropriate contract

National Government Services will review the circumstances surrounding the overpayment. The accuracy and the thoroughness of the information submitted will assist the verification process. National Government Services reserves the right to refer matters to the OIG and other federal law enforcement agencies if potential fraud is suspected.

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Reporting Fraud

For your convenience you may submit your complaint online on the OIG website.

You may also forward your tip to one of the following:

Phone: 800-HHS-TIPS (800-447-8477)
Fax: 800-223-8164
TTY: 800-377-4950

Mail:

Office of Inspector General
Department of Health and Human Services
Attn: Hotline
P.O. Box 23489
Washington, DC 20026

Each source is encouraged to assist the OIG by providing information on how they can be contacted for additional information. Sources may also remain anonymous.

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Fraud and Abuse/Compliance Resources

Reviewed 6/4/2024