According to findings in a US Department of Justice (DOJ) study, the Federal Bureau of Prisons (BOP) spent more money than necessary for health care services in prisons around the country owing to the shady activities of at least one contractor. What a shock.
According to an inspector general investigation, the Department of Justice routed roughly $1.2 billion to nine medical services contractors between 2010 and 2019, who subsequently engaged into subcontractor agreements with providers. Medical treatment for convicts is the responsibility of the providers. The American Medical Association (AMA) publishes codes for medical treatments and services for commercial and public insurance plans, which prime contractors use to submit bills to BOP for payment.
The Federal Bureau of Prisons relies on such external medical services for inmate treatment and the report notes “[t]here are no statutes or regulations that set BOP reimbursement rates.” A prime contractor is responsible for managing its subcontracts, according to the Federal Acquisition Regulation.
The inspector general of the Department of Justice began investigating the contractors’ healthcare claims in 2016. The body learned a contractor selected more expensive materials “on behalf of its subcontracted medical service providers” and in other instances had the provider submit its own codes. “Having the Comprehensive Medical Services Contractor select the CPT/HCPCS code is contrary to the approach typically used in traditional medical practices, where the CPT/HCPCS code submitted for reimbursement is selected by the provider rendering the medical services, or individuals from their staff,” the Department of Justice writes in its report.
In addition, an examination of papers by the DOJ indicated that providers were paid by the hour rather than by the services done, which is the concept underpinning codes. In almost every case, the prime contractor chose the “most expensive” codes, although subcontractors who were given the freedom to choose materials did not necessarily choose the highest tier.
According to the Department of Justice’s analysis, prices would have been significantly lower if prime contractors had not abandoned “traditional medical practice” and forced doctors to pick codes. In fact, in 2021, the nationwide payment for level five of the Medicare physician fee schedule was $183.19, which was much more than lower codes. Codes are used to make claims. 87 percent of claims submitted through subcontractors were classified as Level 4 or below, but 97 percent of claims chosen by the prime contractor were classified as Level 5.
“We concluded the BOP potentially paid higher amounts for similar services when a Comprehensive Medical Services Contractors selected CPT/HCPCS codes on behalf of its subcontracted medical service providers, as compared to when this Comprehensive Medical Services Contractor used codes submitted by its subcontracted providers,” the report states.
According to the study, BOP staff should put in place a mechanism to guarantee that contractors do not choose codes without consulting providers.
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Source: Daily Wire