Fraud, Waste and Abuse/Compliance

Magellan Behavioral Health of Pennsylvania, Inc. (Magellan) takes provider fraud, waste and abuse seriously. Magellan promotes provider practices that are compliant with all federal and state laws. Our expectation is that providers will submit accurate claims, not abuse processes or allowable benefits, and exercise their best independent judgment when deciding which services to order/ provide for members.

Magellan does not tolerate fraud, waste or abuse, either by providers or staff. Accordingly, we have instituted extensive procedures to combat these problems. These procedures are wide-ranging and multi-faceted, focusing on education, prevention, detection, and investigation of all types of fraud, waste and abuse in government programs.

Our policies in this area reflect that both Magellan and providers are subject to federal and state laws designed to prevent fraud and abuse in government programs (e.g. Medicaid and Medicare). Magellan complies with all applicable laws, including the Federal False Claims Act, state false claims laws, applicable whistleblower protection laws, the Deficit Reduction Act of 2005, the American Recovery and Reinvestment Act of 2009, the Patient Protection and Affordable Care Act of 2010 and applicable billing requirements for state and federally funded health care programs.

Understanding fraud, abuse, waste and overpayment:

Fraud means any type of intentional deception or misrepresentation, including any act that constitutes fraud under applicable Federal or State Law, made by an entity or person with the knowledge that the deception could result in some unauthorized benefit to the entity or person, or some other person in a managed care setting.

Examples include:

  • Intentionally billing for services that were not provided
  • Falsifying signatures
  • Rounding up time spent with a member
  • Altering claim forms

Abuse means any practice that is inconsistent with sound fiscal, business, or medical practices, and results in unnecessary costs to the Medical Assistance program, Behavioral Health Managed Care Organization, Primary Contractor, a Subcontractor, or Provider, or a practice that results in reimbursement for services that are not medically necessary or that fail to meet professionally recognized standards or agreement obligations (including the Agreement, contracts, guidance issued in bulletins, and the requirements of State and Federal statutes and regulations) for health care.

Examples include:

  • Services that are billed by mistake
  • Misusing codes: code on claim does not comply with national or local coding guidelines; not billed as rendered
  • Billing for a non-covered service
  • Providing services in a method that conflicts with regulatory requirements (e.g., exceeding the maximum number of patients allowed per group session)
  • Retaining and failing to refund and report overpayments (e.g., if your claim was overpaid, you are required to report and refund the overpayment; unpaid overpayments are grounds for program exclusion)

Waste means the overutilization of services, or other practices that, directly or indirectly, result in unnecessary costs. Generally, not considered caused by criminally negligent actions but rather the misuse of resources.

Examples include:

  • Using excessive services such as office visits
  • Providing services that aren’t medically necessary
  • Provider ordering excessive testing

Overpayment means any payment made to a network provider by a Managed Care Organization to which the network provider is not entitled to under Title XIX of the Act.

Examples include:

  • Inaccurate or improper cost reporting
  • Improper claiming practices
  • Fraud
  • Abuse

Magellan Behavioral Health of Pennsylvania, Inc. (Magellan) has established its own local Compliance Department to support providers in their oversight of fraud, waste and abuse. Our distinctive approach includes auditing activities (routine and targeted); and providing education, technical assistance, and resources to support our provider network.

The links below will direct you to additional Compliance-related information:

Audit Trends
Compliance Best Practices
Confidentiality Resources
Fraud, Waste & Abuse Resources
Making a Fraud, Waste & Abuse Referral
Preparing for an Audit
Trainings/ Education

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