Managed Care

CMS Fraud & Abuse Program: Are You in Compliance?

By Peter J. Cass, OD

Feb. 10, 2016

It’s been well over a year since the Centers for Medicare and Medicaid Services (CMS) released fraud and abuse compliance guidelines.

These guidelines are intended to ensure that all care rendered is medically necessary and properly documented, as well as to ensure that all care billed is within preferred practice guidelines and without outside influence.

This might seem intuitive, and you might think that providers already do that, but It is estimated that fraud and abuse loss in the Medicare system was $65 billion in 2012. This has obviously become a concern for the federal government, so it should come as no surprise that the Office of the Inspector General’s (OIG) work plan, established last year, includes 37 items (out of 111) related to fraud and abuse.

The OIGbelieves that fraud and abuse is the number one issue in health care, so itis going to be very active in the coming years, and non-compliance could be very costly to your practice. In fact, one of the specific issues listed is increased investigation of ophthalmologists for “inappropriate and questionable billing practices.” This will be a big issue for optometry because we use the same codes.

How “Fraud” Is Defined

CMS defines fraud as “knowing and willingly executing a scheme to defraud any health care benefit program.” Providers usually realize that they are committing fraud and are doing it intentionally to take money from the system.

How “Abuse” is Defined

CMS defines abuse as “actions involving medically unnecessary claims resulting in increased costs to the health care system.” Providers can often commit abuse without realizing it. Similarly, waste is defined as “over-utilization of services that result in unnecessary costs to the health care system.” As with abuse, providers often don’t even realize that they are committing waste and doing things that could put them in non-compliance with CMS’s program.

Examples of abuse and waste could include:
• Improper coding
• Inadequate medical records documentation
• Full glaucoma evaluations every six months on a patient simply because a distant relative has glaucoma
• Specular microscopy evaluation of a patient with a superficial corneal foreign body
• Referring a patient to a retinal specialist just because they are diabetic
• “Screening” your exam room for children with Medicaid to schedule them for exams
• Free CE from the center where you refer your cataract patients

What Can I Do in My Practice?

Mistakes like these could be very costly for an optometry practice especially if the provider doesn’t even realize they are committing fraud and abuse. The CMS site says ‘penalties of up to $50,000 per violation.”

Fines are hard to track because providers are usually embarrassed and want to keep them private, but the larger ones do make news. For example, an optometrist in Kentucky was fined $800,000 for violating the false claims act.

Providers need to educate themselves and their staff about the new regulations and take steps to achieve compliance with the program. These steps include:

Assign a compliance officer and/or compliance contact. In our practice, I act as the compliance officer, but an office manager could just as easily be the compliance officer.

Train doctors and staff. This is an essential part of fraud and abuse compliance as staff and doctors are expected to know and comply with regulations. In our office, training like this is done in our monthly staff meetings. We set aside an hour for the training and use professional training materials. Our training materials came from Practice Compliance Solutions, but CMS also has training materials available on its site. Click HERE for additional training materials.


Standards vary slightly by specialty, but should include:
RISK ASSESSMENT. Review yourbilling and documentation practices, as well as your HIPAA privacy and security protocols.

TENETS OF CODING. Tenets of Coding should be included to ensure that all services rendered are necessary for the evaluation, treatment or monitoring of treatment based on the patient’s diagnosis.

EVALUATE POLICIES. Avoid improper kickbacks, and other inducements, by evaluating all policies and practices related to financial arrangements with other health care providers.

REVIEW DOCUMENTATION. Tenets of Medical Records Documentation should be implemented to assure that medical records are readily accessible; medical records are legible; medical record documentation is logical and according to accepted standards of documentation (SOAP format); billing and coding are according to accepted standards; the attending physician is readily identifiable in all patient encounters; and, medical records are signed or electronically signed.

REVIEW MEDICAL RECORD PROTOCOL. Medical Record Retention should be used to ensure that records are created, retained, distributed and destroyed according to the policies established in compliance with HIPAA as well as state law.

PERFORM AUDITS OF MEDICAL RECORDS. This is best accomplished by having a professional optometry billing company audit a sample of your records. This can be done internally, but it may be hard for a practitioner to find their own mistakes.

CORRECT OFFENSES. Any offenses that are found should be corrected immediately. In our practice, this means going to the doctor or staff member who made the mistake, explaining the mistake and retraining to prevent the mistake in the future. Additionally, these mistakes are reviewed in monthly meetings to prevent similar issues from occurring in the future.

ESTABLISH INTERNAL DISCIPLINARY GUIDELINES. For serious offenses, procedures for termination should be in place, and legal council should be obtained. Medicare, and other payers, have very serious penalties for fraud, and practices that allow violators to continue working at the practice could face expulsion from Medicare, as well as other private-payer programs.

PUT IN WRITING AND DOCUMENT. Providers must have written compliance manuals and documented staff training, so they should look for credible compliance companies that can provide optometry-specific manuals to help them.


Peter J. Cass, OD, is the owner of Beaumont Family Eye Care in Beaumont, Texas. To contact:


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