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Impact of the COVID-19 Pandemic on Healthcare Fraud

  • by Steve Nesnidal, MD, CPC, AHFI
  • Apr 7, 2021, 15:51 PM
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Even before the COVID-19 pandemic, healthcare fraud, waste and abuse (FWA) was already a major drain on the US healthcare system. The National Health Care Anti-Fraud Association (NHCAA) estimates the financial losses due to healthcare FWA are in the tens of billions of dollars each year. Furthermore, the NHCAA estimates that healthcare FWA consists of 3% of total healthcare spending, while some government and law enforcement agencies place the loss as high as 10%.

During the pandemic, healthcare claim fraud prevails as new fraud schemes develop and adapt to the changes in healthcare guidelines enacted, so providers can continue to treat patients. Two major areas of FWA expansion during the pandemic include Telehealth and COVID-19-related laboratory testing add-on services.

Telehealth Fraud

Many payers expanded Telehealth benefits shortly after the COVID-19 emergency period began. Although this was a necessary step to secure access to much needed healthcare from a distance, this also facilitated fraud opportunities. Erroneous billing has since increased in specialties previously not allowed to provide services via telehealth. Since the pandemic started, elevated levels of Evaluation and Management (E/M) service codes are being billed that are not supported by the medical records. E/M services performed along with COVID-19 testing are being incorrectly reported - partially due to the continuously changing guidelines, but also due to fraud.

COVID-19 Lab Testing Fraud

The American Medical Association’s (AMA) CPT Reporting for COVID-19 Testing document provides guidance to the provider reporting the work of COVID-19 lab testing when the patient is swabbed at a testing site. The AMA recommends reporting a level one E/M code (CPT 99211), as well as a second code for specimen handling – either the code for handling of specimen for transfer from office to lab (CPT 99000), or the one for handling specimen from other than office to lab (CPT 99001). When testing occurs during an in-person E/M office visit, however, these codes should not be reported separately, as they are components of the E/M visit charge. Fraudulent E/M codes have been “added on” to claims when one was not appropriate. Inappropriately high E/M code levels have been billed in encounters where only a lab specimen was collected but no significant face-to-face service was provided.

Aside from fraud related to specimen collection, COVID-19-related laboratory services provide many other opportunities to commit fraud. In fact, COVID-19 laboratory add-on services tops the list of 2021 points of emphasis that many FWA governing bodies plan to analyze. In many instances, payers do not require a provider order for a COVID-19 laboratory test. This alone can open opportunities for fraudulent laboratory claims. In conjunction with COVID-19 lab test claims, add-on tests are additionally reported, such as respiratory pathogen panel (RPP) tests, allergy tests, or even genetic tests, without an order to prove medical necessity. The sheer volume of legitimate COVID-19 laboratory services that continue to be submitted to payers makes it a challenge to identify COVID-19 laboratory claims fraud.

Context4 Healthcare Updates FWA Products Accordingly

Context4 Healthcare has optimized our FWA rules to identify aberrant claim patterns related to telehealth fraud and COVID-19 lab fraud in concert with other new as well as established healthcare fraud schemes. We offer a series of reports designed to help our users analyze claims data and identify FWA trends. These reports allow the user to selectively and effectively mine the claims data to isolate providers with outlying code associations of concern. The claims data extract generated can identify aberrancies worthy of a focused medical record review.

Call Context4 Healthcare or visit our website to inquire about details to determine which of our FWA tools will work best for you.
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