Psychiatric Fraud and Abuse:

Increased Scrutiny of Hospital Stays Is Needed for Federal Health Programs

HRD-93-92: Published: Sep 17, 1993. Publicly Released: Sep 17, 1993.

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Pursuant to a congressional request, GAO reviewed whether federal health programs have: (1) been subjected to inappropriate practices by psychiatric hospitals to an extent comparable with the private sector; and (2) controls to protect their beneficiaries from such abuses.

GAO found that: (1) federal health programs have been subjected to fraudulent and abusive practices by psychiatric hospitals, but to a lesser extent than private insurers; (2) some internal control weaknesses have resulted in unnecessary hospital admissions, excessive lengths of stay, poor care, and unauthorized or duplicate payments; (3) some state Medicaid programs do not independently evaluate the need for inpatient psychiatric care; (4) lower reimbursement rates and greater controls have made federal programs less vulnerable to such abuses; and (5) as federal investigations continue, further fraud and abuse in federal programs may be identified.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: For a variety of reasons, HCFA does not believe that a PRO should automatically focus on facilities based solely on its for-profit status. HCFA stated in its response to the GAO report that the PRO would certainly pursue a group of facilities if a pattern of problems is discerned. Accordingly, HCFA convened a workgroup to discuss the issues raised by the report regarding potential quality and utilization problems and concerns about excessive billing and unnecessary stays. Eight HCFA PROs provided data from cases reviewed in 25 facilities belonging to the chain identified in the GAO report and shared that information with the IG for use in its further investigation.

    Recommendation: The Administrator, HCFA, should require intensified reviews under Medicare, on a selective basis, of for-profit psychiatric hospitals to determine whether problems exist with unnecessary hospital stays and quality of care.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  2. Status: Closed - Implemented

    Comments: DOD awarded a contract for national quality monitoring on July 12, 1993. The primary mission of the contractor is the oversight and monitoring of psychiatric facilities to ensure the delivery of quality care.

    Recommendation: The Secretary of Defense should direct the Assistant Secretary of Defense (Health Affairs) to adopt procedures for selectively visiting and inspecting psychiatric hospitals to determine whether problems involving unnecessary hospital stays and quality of care have been corrected.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: HCFA's Medicaid Bureau is developing a final regulation that requires client assessment by a multidisciplinary team prior to admission, and a comprehensive services plan for each individual at risk of requiring inpatient mental health treatment. The interval for review of inpatient care will be every 7 days after admission, and for residential treatment facilities, every 7 days in the first month and once a month thereafter. The regulation will require facilities to employ the professional administrative and support staff necessary to implement the inpatient treatment plans and regulatory requirements. Professional staff will be required to be appropriately licensed, certified, or registered when required by state law.

    Recommendation: The Administrator, HCFA, should increase oversight and enforcement of Medicaid certification requirements that youths need inpatient psychiatric care, and if the Administrator believes that existing authority does not permit doing so, ask Congress to amend the law.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration

  4. Status: Closed - Implemented

    Comments: DOD has implemented procedures for on-site compliance reviews of contractors, focusing on mental health authorization requirements. These procedures will be a routine topic of contractor performance requirements.

    Recommendation: The Secretary of Defense should direct the Assistant Secretary of Defense (Health Affairs) to ensure that the contractors improve their claims payment systems to minimize payments of unauthorized hospital stays and to avoid duplicate payments.

    Agency Affected: Department of Defense

 

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