FWA Insights: Analysis confirms >$1 million in improper claims

Health plan investigators rely heavily on tips from members, but those tips require a barrage of analytics and techniques performed by subject matter experts with clinical knowledge to verify them. While anomalies happen, it's important to back up findings with evidence, or to find a larger pattern that could provide clues about intent.

Let’s look at a recent case where a Cotiviti client got a tip that resulted in the identification of more than $1 million in improper claims.

Verifying a tip with the SIU

A client received a tip from an internal department and forwarded it to Cotiviti’s special investigations unit (SIU) for further data analysis. The tip alleged that the provider was billing for services not rendered and was failing to reassess members’ needs. The client received additional information that the parent of the members from the initial tip was being paid by the provider for marketing services.

Cotiviti’s initial data analysis confirmed that this provider was billing excessive amounts and claims per patient. The provider billed for multiple members per household without appropriate modifiers and billed services for members who did not require home health services. Cotiviti reviewed medical records and found services billed under HCPCS codes:

• S9123 – Nursing care, in the home; by registered nurse (RN), per hour
• S9124 – Nursing care, in the home; by licensed practical nurse (LPN), per hour
• S9215 – Respite care, in the home, per diem
• T1019 – Personal care services, per 15 minutes, not for an inpatient or resident of a hospital, nursing facility, ICF/MR or IMD, part of the individualized plan of treatment (this code may not be used to identify services provided by home health aide or certified nurse assistant)
• T1002 – RN services, up to 15 minutes
• T1003 – LPN/licensed vocational nurse services, up to 15 minutes
• T1005 – Respite care services, up to 15 minutes
• T1013 – Sign language or oral interpretive services, per 15 minutes
• T1031 – Nursing care, in the home, by licensed practical nurse, per diem
• G0494 – Skilled services of an LPN for the observation and assessment of the patient's condition, each 15 minutes (the change in the patient's condition requires skilled nursing personnel to identify and evaluate the patient's need for possible modification of treatment in the home health or hospice setting)

This medical review substantiated the allegation and identified a 100% error rate.

Quantifying the FWA

Upon receiving the initial tip, Cotiviti’s investigators analyzed data for suspect billing patterns. They reviewed the last three years of professional claims data and identified multiple members of the same household receiving services on the same date of service without the proper modifiers.

Analysis also identified diagnosis code usage under code J449 (unspecified chronic obstructive pulmonary disease) consistent with the allegation that the provider was billing services for members who did not require home health services and did not have supporting documentation for it.

The at-risk dollars associated with Cotiviti’s preliminary review of these services was estimated at more than $1.3 million.

Seeking justice

Following our investigation, Cotiviti confidently referred the provider to the client’s own SIU for investigation of potential fraud after conducting two levels of internal review, which identified a 100% error rate based on multiple documentation issues including the following:

• Several records had missing required documentation such as initial assessment, plan of care, and progress notes to support that the patient required private duty nursing
• The number of units billed did not match the number of hours documented in records and no time stamps to determine start and stop time of coverage
• Duplicate claim lines were submitted by the provider

Cotiviti also cooperated with law enforcement to provide background on steps taken in the audit, review outcomes, and current status. Our investigators worked with the client to aid the law enforcement investigation, supporting compliance with subpoenas and requests for information.

As a result of the criminal investigation, the provider has agreed to pay $3 million for allegations of violating the False Claims Act. The overall identified overpayment was upheld from the audit and totaled nearly the same amount identified by Cotiviti’s preliminary review. In January 2024, nine individuals were indicted for charges of healthcare fraud conspiracy, money laundering, and obstruction of justice.