Training ObjectivesUpon completion of this training, you should have an awareness of:

The impact of health care fraud, waste, and abuse

Your obligations to recognize and report potential fraud, waste,

and abuse

Molina’s policy on non-retaliation for reporting potential fraud

The use of the Office of Inspector General List of Excluded

Individuals/Entities Database and the Government Services Administration

Excluded Parties List System

Medicare Specific Provisions

Mitigating Conflict of Interest

The Deficit Reduction Act/False Claims Act

The “Whistleblower Provision” and what it means

Fraud, Waste, and Abuse PlanMolina Healthcare is a contractor to Federal and State governmental agencies. Simply put, we are “stewards of government funds”. It is Molina’s obligation to prevent, detect, investigate, and report potential healthcare fraud, waste and abuse. The core elements of the Fraud, Waste, and Abuse Plan are as follows:

• Provider education

• Conducting proactive and meaningful investigations

• Identifying potential monetary losses

• Maintaining and analyzing system needs

• Coordinating efforts with law enforcement and special investigative units

• Training employees on how to identify and report potential fraud, waste, and abuse

Fraud, Waste, and Abuse

DurableMedicalEquipment

Kickbacks

Hospital

Members

PsychiatricHospitals

AmbulanceService

Chiropractors

NursingHomes

ClinicalLaboratories

HomeHealthCare

Brokers/Agents

Doctors

Clinics

Pharmacies

FRAUD

Fraud, Waste, and AbuseWhat is FRAUD?

“Fraud” means an intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to themselves or some other person. It includes any act that constitutes fraud under applicable Federal or State law.

(42 CFR 455.2)

Fraud, Waste, and AbuseWhat is WASTE?

Health care spending that can be reduced or eliminated without compromising the quality of care. Waste categories includes:

• Quality Waste includes overuse, underuse, and ineffective use

• Inefficiency Waste includes redundancy, delays, and unnecessary process complexity

• Example – The attempt to obtain reimbursement for items or services where there was no intent to deceive or misrepresent; however, the outcome of poor or inefficient billing methods (e.g. coding) causes unnecessary costs to the Medicaid/Medicare programs

Fraud, Waste, and AbuseWhat is ABUSE?

“Abuse” means practices that are inconsistent with sound fiscal, business, or medical practices that result in an unnecessary cost to the Medicaid program or in reimbursement for services that are not medically necessary, or fail to meet professionally recognized standards for healthcare. It also includes recipient practices that result in unnecessary cost to the Medicaid program.

(42 CFR 455.2)

Fraud, Waste, and Abuse• While health care fraud is

extremely costly, it is important to understand that fraudulent practices can also create quality of care issues resulting in patients being exploited and/or put at physical risk

• Federal law provides for longer potential prison terms in health care fraud cases that result in a patient’s injury or death

Fraud, Waste, and AbuseReasons to Control Fraud, Waste, and Abuse:

• Health care fraud impacts everyone

• Health care fraud is the second costliest white-collar crime in America after tax evasion

• Health care fraud results in increased insurance costs

• Anti-Fraud efforts are Federal & State contract requirements

• The National Health Care Anti-Fraud Association (NHCAA) estimates 3% – 10% of the nation’s annual health care outlay is lost to fraud and abuse. In 2009, health care spending projections were $2.5 trillion; therefore the health care fraud and abuse problem is valued somewhere between $77 – $255 billion

Fraud, Waste, and AbuseWho commits Health Care Fraud?

Health care providers: Any person who intentionally tries to obtain reimbursement for health care services they did not provide,

Members: Any person who falsely uses member identification information to obtain medical care.

No matter who commits fraud, waste, and abuse, it affects everyone.

Provider Fraud

Falsification of Claims Information

Questionable Billing Practices

Overutilization

False Coding,Records, or

Altered Claims. Billing for services

not rendered orgoods not provided.

Billing separately for services that should be a

Single service. Billing for services not medically necessary.

Medically Unnecessary Diagnostics, Unnecessary Durable Medical Equipment, Unauthorized Services,

Inappropriate Procedure for Diagnosis.

Member FraudMember Fraud includes the following:

• Using someone else’s insurance card

• Forging a prescription

• Knowingly enrolling someone not eligible for coverage under their policy or group coverage

• Providing misleading information on or omitting information from an application for health care coverage, or intentionally giving incorrect information to receive benefits

• Altering the billed amount for services

• Altering the service date

Other Health Care FraudOther examples include:

• An individual or organization posing as Medicare, Medicaid, or Social Security Administration personnel with the intent to steal beneficiaries’ identification

• Deceptive telemarketing practices

• Prohibited sales or marketing practices by health care representatives

• Fabricating claims

Fraud, Waste, and AbuseInternally reducing potential fraud, waste, and abuse

• Molina has developed a Fraud, Waste, and Abuse Plan that works with its members, providers, employees, and business partners to take a proactive approach to reduce fraud, waste, and abuse

• Employees are trained on fraud, waste, and abuse within 60 days ofstart of employment, and annually thereafter

• Molina conducts background checks on all employees prior to employment

• Employees, providers, and business partners are checked to ensure they are not on the Office of Inspector General or General Services Administration exclusion lists

Fraud, Waste, and AbuseExternally reducing potential fraud, waste, and abuse

• Physicians are checked monthly to ensure they are not on the Medicare/Medicaid “exclusion” or “opt-out” list

• Molina monitors claims from providers utilizing specialized software to identify irregular billing practices

• Molina monitors over- and under-utilization patterns

• Molina encourages reporting concerns directly to a Supervisor, Compliance Officer, or Human Resource representative

• Molina has a hotline for confidential or anonymous reporting of potential fraud, waste and abuse directly to the Compliance Officer

Fraud, Waste, and Abuse• All employees are required to report potential fraud, waste,

and abuse

• Fraud, Waste, and Abuse can be reported anonymously

• Any suspected Fraud, Waste, and Abuse reported remains confidential

• Retaliation against those who, in good faith, report suspected fraud, waste, and abuse is prohibited

Link to Non-Retaliation Policy

Office of Inspector General (OIG) & General Services Administration (GSA)

• Federal law prohibits entities that participate in federal health care programs from entering into relationships with individuals or entities that have been excluded from participation in such federal programs

• It is against Molina’s policy to knowingly hire any individual or contract with any entity who is listed by a federal or state agency as debarred or currentlyexcluded from participating in a federal or state health care program.

• Molina reviews the Department of Health & Human Services Office of Inspector General (OIG) and General Services Administration (GSA) exclusion lists to ensure that employees and subcontractors are not included on such lists

• Many states also maintain an exclusion list. Entities can be prohibited from participating in federal programs and state programs as well. It is Molina’s policy not to knowingly hire any individual or contract with any entity that is either on the Federal Exclusion list or on YOUR state’s exclusion list.

Fraud, Waste, and Abuse – Background Checks

Fraud, Waste, and AbuseObligations of Medicare Plans:

• To implement a Fraud, Waste, and Abuse program

• To ensure that Fraud, Waste, and Abuse training is provided to employees, contracted providers and delegated entities

• To monitor and audit the Pharmacy Benefit Manager (PBM) activities performed on behalf of the Plan

• To take appropriate corrective actions according to any circumstances or problems that may arise

• To refer potential Fraud, Waste and Abuse to the MEDIC

Conflicts of Interest:

• Molina strives to prevent situations in which the impartiality of an employee in discharging his/her duties could be called into question because of the potential, perceived, or actual improper and impermissible influence of personal considerations

• The Molina Code of Conduct articulates the commitment to comply with all federal laws regarding employees and subcontractors to act in an ethical and compliant manner

• Molina recognizes that in the normal course of affairs an employee may encounter personal interests or relationships that create potential conflicts of interest with the Company. In those instances, the Company requires the employee to take affirmative steps to alert the Company of the potential conflict of interest

Link to Conflict of Interest Policy

Fraud, Waste, and Abuse

Fraud, Waste, and AbuseYou can protect Molina by:

• Reviewing and understanding the Molina Healthcare Fraud, Waste, and Abuse and Compliance Plan

• Providing suggestions to the Compliance Department on how to improve the program

• Reporting potential fraud, waste, and abuse

• Asking questions when you do not know the answer!

Link to (Health Plan) Fraud, Waste and Abuse Plan

Reporting Potential Fraud, Waste, and AbuseTo anonymously, confidentially and/or privately report potential fraud, waste and abuse an individual may use one of the following methods:

Call the Compliance Fraud, Waste, and Abuse Hotline at:

Tel:(866) 606-3889

Send a confidential fax to the Molina Healthcare Compliance Fraud, Waste, and Abuse toll free hotline at:

Fax:(877) 665-4620

Send a confidential E-mail to:

CORPORATECOMPLIANCE@MOLINAHEALTHCARE.COM

Send by standard mail to:Send (marked confidential) to:

Joann Zarza-GarridoMolina Healthcare, Inc.

200 Oceangate, Suite 100Long Beach, CA 90802

The Deficit Reduction Act/False Claims Act• The Deficit Reduction Act (DRA) was enacted to bring monetary

spending under control

• Medicare and Medicaid programs are now growing faster than the economy and the population. Currently, it is nearly three (3) times the rate of inflation

• The DRA aims to cut $11 billion from the Medicare and Medicaid programs by 2012 by deterring and preventing fraud, waste, and abuse

Federal False Claims ActPolicies are required to provide detailed information about:

• The Federal False Claims Act and any state laws pertaining to civil or criminal penalties for false claims and statements including whistleblower protections granted in these laws

• How the health care entity will detect and prevent fraud, waste, and abuse

• The right of the employee to be protected under the whistleblower provision and from non-retaliation of the entity’s policy for detecting and preventing fraud, waste, and abuse

Federal False Claims ActUnder the Federal False Claims Act, any person who engages in the following is liable for his/her actions, such as:

• Knowingly presents, or causes to be presented, to an officer or employee of the United States Government a false or fraudulent claim for payment or approval

• Knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government

• Conspires to defraud the Government by getting a false or fraudulent claim allowed or paid

Federal False Claims Act - PenaltiesFalse Claims Act/The Deficit Reduction Act:

False Claims Act violations can be subject to civil penalties including and not limited to:

• Monetary penalties ranging from $5,500/$11,000 for each false claim submitted

• Potential requirement to pay three (3) times the amount of damages the Government sustains because of the violation

Federal False Claims ActIn order to understand the Federal False Claims Act, certain terms need to be defined:

“Knowing” and “Knowingly” – mean that a person:

• Has actual knowledge of the information

• Acts in deliberate ignorance of the truth or falsity of the information

• Acts in reckless disregard of the truth or falsity of the information

No proof of specific intent to defraud is required

The Deficit Reduction Act/False Claims Act

• Health care entities who receive or pay out $5 million or more from Medicaid per year are required to have written policies in place for employees, contractors, and agents

Link to Deficit Reduction Act Policy

Whistleblower ProvisionTo encourage individuals to come forward and report misconduct involving false claims, the False Claim Act includes a whistleblower provision.

An employee who has been “discharged, demoted, suspended, threatened, harassed, or otherwise discriminated against” due to their role in furthering a false claims action are entitled to “all relief necessary to make the employee whole.”

MHI (Customized by Health Plan)

• Each state has different laws for example CA has the False Claims Act and Ohio has (Ohio Revised Code(ORC) 5111.03)

Fraud, Waste, and AbuseA Successful Anti-Fraud Program Depends on Every Employee to…

• Remember that accusations can either be true or false

• Know it is against the law to report matters with malicious intent

• Provide an objective, comprehensive explanation when reporting an allegation including supporting evidence (e.g. claims, call logs, medical records)

• Keep in mind these questions when reporting potential matters:

What laws and/or statutes were potentially violated?

Who was involved?

When did the occurrence take place?

Where did the occurrence happen?

What was the violation?

How did the violation occur?

Reporting Potential Fraud, Waste, and AbuseTo anonymously, confidentially and/or privately report potential fraud, waste and abuse an individual may use one of the following methods:

Call the Compliance Fraud, Waste, and Abuse Hotline at:

Tel: (866) 665-4626

Send a confidential fax to the Molina Healthcare Compliance Fraud, Waste, and Abuse toll free hotline at:

Fax: (877) 665-4620

Send a confidential E-mail to:

Email: CORPORATECOMPLIANCE@MOLINAHEALTHCARE.COM

Send by standard mail to:Send (marked confidential) to:Send (marked confidential) to:

Joann Zarza-GarridoMolina Healthcare, Inc.

200 Oceangate, Suite 100Long Beach, CA 90802