On September 18th, 2024, Erica Everhart and Zach Bredl posted an article on the Care Journey website about the impact of fraud and abuse in value-based care. Spending on CTPs/skin subs is not the only fraud problem faced by Accountable Care Organizations (ACOs), but it’s a big one. As noted in their article, in 2023, among the top codes billed, a particular amniotic membrane stood out with over $1.1B in total payouts. In the article, the top 10 providers billing that product are listed in a table. The names have been redacted for 8 of them, but Carlos Ching and Bethany Jameson are named. They are the two nurse practitioners affiliated with Apex Mobile and charged by the DOJ. Eight other providers billing that product are represented with their Medicare payment amounts. Three of the unnamed practitioners in Arizona were affiliated with APX but were not charged by the DOJ – despite the fact that their Medicare payments for this particular amniotic product were far higher than the practitioners who were charged by the DOJ.
ACOs pay attention to spending patterns, as noted in the Politico “Billion dollar scam” article. As discussed in the article, it did not go unnoticed by one ACO that $7.4 million was spent on “skin subs” in 2023, a 165% increase from the previous year, including $2.8 million on one patient. Months before that article came out, I received an email from the CMO of a large ACO that had noted payments in the millions per patient for CTPs. It was not merely moral outrage that was fueling his frustration. Skin sub fraud can bring down an entire value-based organization.
An Accountable Care Organization (ACO) is a group of doctors, hospitals, and other healthcare providers who provide coordinated care, primarily to Medicare patients. ACOs contract with the Centers for Medicare and Medicaid Services (CMS) under a program called the Medicare Shared Savings Program (MSSP). Under these agreements, the ACO tries to ensure that patients receive evidence-based care without wasting money on unnecessary services. Throughout the year, the ACO is paid through traditional Medicare fee-for-service (FFS) – which means that billing works like any traditional Medicare FFS plan. In Medicare FFS, there is no prior authorization (PA) of services, and the ACO can’t deny any services. However, at the end of the year, the monetary payments to the ACO are “adjusted” by CMS based on the quality measure scores of participating physicians and the total Medicare spending on all the patients. If the ACO does a good job, it may get a bonus payment from CMS – and that money is shared with the doctors participating in the ACO. That way, the ACO doctors get rewarded for managing Medicare resources well. However, depending on the type of contract the ACO has with CMS, if it fails to meet performance benchmarks (e.g., the services billed to Medicare are particularly high), the ACO may have to pay money BACK to Medicare. This means that ACOs are particularly vulnerable to fraud and abuse. A few bad apple practitioners can upend the finances of the entire organization, as well as the individual finances of all participating physicians. The Care Journey article explains that ACO programs under MSSP have thin margins. If average spending per ACO member (meaning, per patient) goes up only $200 – $1,000 per year, the result could be devastating for the organization.
The article depicts “Skin Substitute” growth by ACO for 2022-2023 graphically. One graph shows the average spend on skin subs above $175 per beneficiary, with the two specific ACO providers indicted by the DOJ indicated by arrows. Note that those two practitioners are NOT the biggest offenders. However, their behavior helped increase the average spend per beneficiary within an ACO to nearly $500 per patient.
A few individuals have commented on my blog that I just don’t understand how Medicare works. Their use of expensive skin subs is not hurting anyone, and all of the agreements that enable these large profits are “legal.” I am sure they think that they are just a nameless cog in the huge machinery of Medicare. But, they are not nameless. If you are a big user of skin subs, particularly among patients who are participating in an ACO, the ACO knows you by name. Your behavior with skin subs could threaten the survival of their entire value-based organization. If you are at the bottom of this graph, you probably won’t see federal agents show up at your office. But if you are at the top of this graph, I am willing to bet that the ACO knows exactly who to call within the DOJ.
For some reason, this makes me think of Jeff Goldblum’s line as Ian Malcolm in Jurassic Park: The Lost World: “‘Ooh, ah.’ That’s How It Always Starts. But Then Later, There’s Running And Screaming.”
Dr. Fife is a world renowned wound care physician dedicated to improving patient outcomes through quality driven care. Please visit my blog at CarolineFifeMD.com and my Youtube channel at https://www.youtube.com/c/carolinefifemd/videos
The opinions, comments, and content expressed or implied in my statements are solely my own and do not necessarily reflect the position or views of Intellicure or any of the boards on which I serve.
