Last year the California Department of Industrial Relations, Division of Workers’ Compensation (DWC) sent out a letter to the workers’ compensation community regarding fraud. You can read the full letter from 2014 here. But in order to keep things simple, RateFast has created an easy to follow guide for understanding regulations and making sure your practice isn’t making common mistakes.
Workers’ Compensation fraud can be committed by all parties in the workers’ comp process. This includes medical providers, attorneys, claims adjusters, and employers. Below are details and real-world examples of what fraudulent activity might look like for Medical Providers. For a full discussion and review of the 2014 Fraud warning notice, please listen to our podcast “Staying Out Of Fraud’s Way”, available on the iTunes store.
Fraudulent activity for medical providers includes:
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Billing for services that weren’t performed/ billing for procedures that weren’t indicated.
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This can occur if an office is not in the practice of correctly documenting the amount of time a provider has spent with the patient.
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Employing Individuals to Solicit New Patients
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Using another individual in the community to funnel cases to you.
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Unnecessary treatment.
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A patient is authorized for a cortisone injection, and it doesn’t work. If the doctor continues to provide cortisone injections, that may be viewed as unnecessary treatment.
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Self-interested referrals.
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If a provider has stock or ownership in a physical therapy group across the street and the provider sends their patients over there, then they make an additional profit on that patient.
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Failure to report a work injury.
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Employers are required to report work injuries. If a doctor is not reporting an injury then be in favor in employer, then insurance premium doesn’t go up.
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If a doctor is aware that a work injury has occurred they have to report it whether or not the patient wants to continue treatment.
Let’s take a look at a fictional, but quite possible real-world scenario:
An employer brings in an injured worker and they have a laceration on their arm. The medical provider examines the wound and makes a determination that the wound needs to be closed with sutures. If sutures are used it becomes a reportable case. If it’s closed with surface tape, the injury falls under first aid. The employer states that they would like it to be closed with butterfly tape. They will pay the provider cash for this and also promise to send other injuries to the provider’s clinic.
If the doctor complies and places the butterfly tape, then fraud has occurred because the medical recommendation was for stitches. The doctor knowingly changed their medical treatment plan to provide a first-aid remedy as opposed to a reportable one. This can be very difficult to prove after the fact.
Bottom line for medical providers concerned about fraud? Simply remember to be careful about processes in the office:
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How you assign medical codes
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How you interact with employers
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What something might look like to a third party
Understand the law, familiarize yourself with the annual fraud notice, and you’ll stay out of fraud’s way!