This policy addresses how Vision Service Plan (VSP) is committed to provide the highest quality eye care and eyewear service to our members, customers, vendors, and employees. As part of this service, we strive to identify, prevent, and recover losses due to health care fraud, waste, and abuse.

Abuse: Practices that are inconsistent with sound business, financial or medical practices that cause unnecessary costs or reimbursement for services that are not medically necessary or that fail to meet professionally recognized standards for healthcare.

Centers for Medicare and Medicaid Services (CMS): The federal agency within the U.S. Department of Health and Human Services (HHS) that administers the Medicare and Medicaid programs.

Credible Allegation of Fraud: May be an allegation, which has been verified by VSP from any source, including but not limited to the following:

1. Fraud hotline complaints
2. Claims data mining
3. Patterns identified through provider audits, civil false claims cases, and law enforcement investigations. Allegations are considered credible when they have indicia of reliability and VSP has reviewed all allegations, facts, and evidence carefully and acts judiciously on a case-by-case basis.

Downstream entity: Any party that enters into an acceptable written arrangement below the level of the arrangement between VSP (and/or contract applicant) and a first-tier entity. These written arrangements continue down to the level of the ultimate provider of both health and administrative services.

First tier entity: Any party that enters into an acceptable written arrangement with VSP or contract applicant to provide administrative services or health care services on behalf of VSP for a Medicare or Medicaid member.

Fraud: A deception or misrepresentation that an individual or entity makes knowing that the misrepresentation could result in some unauthorized benefit to the individual, the entity or to some other party.

Governing Body: Members of the VSP Board of Directors and the Committees who work directly with the Board.

Knowingly: Includes not only actual knowledge but also deliberate ignorance or reckless disregard for the truth or falsity of the information.

Members of the Workforce: new employees, existing employees, contractors and the first tier, downstream and related entities (FDRs).

Related entity: Any entity that is related to VSP by common ownership or control, and 

1. Performs some VSP administrative functions under contract or delegation;
2. Furnishes services to Medicare or Medicaid enrollees under an oral or written agreement.

Remuneration: Anything of value and can include gifts, under-market rent, or payments that are above fair market value for the services provided.

Waste: Activities involving payment or the attempt to obtain reimbursement for items or services where there was no intent to deceive or misrepresent, but the outcome caused unnecessary costs.

Purpose: The Fraud, Waste and Abuse policy applies to VSP members of the workforce contractors, governing body and First Tier, Downstream and Related Entities.

Goals: To provide a process to educate staff on FWA, and the reporting of incidents.

1. Upon hire and annually thereafter, all VSP employees, applicable vendors, the governing body, and First Tier, Downstream and Related Entities are required to take the Fraud, Waste and Abuse (FWA) training, read and acknowledge review of the Fraud, Waste and Abuse policy.
2. The Compliance Department tracks and ensures completion of new hire and annual FWA trainings.
3. FWA policy or a situation believed to violate its provisions should be reported immediately to the SIU, a supervisor, another member of management or Human Resources.
4. The Special Investigative Unit (SIU) documents all incidents of suspected and actual FWA and starts the investigation process. Fraudulent or abusive practices could result in sanctions and disciplinary actions.
5. There will be no retribution for asking questions, raising concerns about fraud, waste, and abuse or for reporting possible incidents.
6. The Chief Insurance Compliance Officer reviews this policy at least annually and revises as necessary. Any changes or modifications are noted and then submitted to The Insurance Compliance Committee for review and approval.

1. Training

VSP recognizes that the best defense against becoming a victim of fraudulent or abusive behavior is an educated work force capable of preventing, detecting, and eliminating such activities. VSP is dedicated to providing appropriate education and training to all its employees. There are a number of Federal and State laws to deter and punish those who fraudulently seek to obtain improper payments from federal programs like Medicare and Medicaid. Federal laws include, but are not limited to, the following:

• Health Care Fraud Statute: The Health Care Fraud Statute makes it a criminal offense to knowingly and willfully execute a scheme to defraud a health care benefit program.
• False Claims Act: The False Claims Act establishes civil liability for offenses related to certain acts, including knowingly presenting a false or fraudulent claim to the government for payment, and making a false record or statement that is material to the false or fraudulent claim.
• Anti-Kickback Statute: The Anti-Kickback Statute prohibits the knowing and willful offer, payment, solicitation, or receipt of any remuneration, in cash or in kind, to induce or in return for referring an individual for the furnishing or arranging of any item or service for which payment may be made under a Federal health care program.

All new employees are required to complete Fraud, Waste and Abuse training within the first ninety days of hire and all employees are required to take this education annually. The major points covered are:

• Definition of what constitutes fraud, waste, and abuse
• Roles & responsibilities
• Responsibility of each employee in reporting suspected or known fraudulent or abusive activities
• Prevention and Detection of Fraud
• Types of Fraud Indicators and Controls
• Investigations
• Sanctions and Disciplinary Actions
• Applicable Laws and Regulations
• Reporting Fraud, Waste, and Abuse

In addition to an educated work force, all business partners must have knowledge of the various tools and resources available to combat health care fraud. Currently, VSP provides education about fraud, Policy Number: C-0004 VSP Proprietary and Confidential Page 4 waste, and abuse to our first tier, downstream or related entity (FDR) vendors by offering the organizations FWA module, issued by the Centers for Medicare and Medicaid Services (CMS). The FDR is required to provide an annual statement of attestation of completion of the training.

2. Training Monitoring

In accordance with policy, C-0018 Compliance Program-Effective Training and Education, the Compliance Department designee runs an ad-hoc report from the LMS software system to identify any member of the workforce who is at risk of missing a compliance training deadline, or has missed the deadline.

3. Reporting

Whenever suspected fraudulent or abusive activities are detected by any employee, it is that employee's responsibility to inform the SIU immediately after discovery of an incident to allow for the following:

1. VSP is required to report incidents to various states/regulatory authorities within specific timeframes.
2. Information can be forwarded to the SIU using the on-line SIU Case Referral Form, which can be accessed on VSP’s Intranet site or by sending an e-mail to SIUmailbox@vsp.com.
3. Members can also view VSP’s Anti-Fraud and Abuse Program and report any incidents through www.vsp.com and report incidents to a physical address:
   • Attn: Privacy Requests 3333 Quality Drive MS-321 Rancho Cordova, CA 95670
4. An Anti-Fraud Hotline has been made available for all parties (providers, contract laboratories, employees, clients, agents, and patients) to report any suspected incidents of fraud, waste or abuse.
   • The Anti-Fraud Hotline toll free number is (800) 877-7236.
5. Additionally, VSP employees, members of the governing body and FDRs and their employees are able to report incidents to a physical address:
   • SIU Investigative Unit 3333 Quality Drive Rancho Cordova, CA 95670

4. Investigation

The SIU will review all incidents of potential fraud, waste, and abuse to determine the best course of action VSP should pursue concerning each incident. Whenever a potential incident of fraud, waste or abuse is detected or reported to any individual within VSP, it is that individual's responsibility to notify the SIU via the SIU Case Referral Form or VSP's Anti-Fraud, Waste and Abuse hotline of the suspicious activity. Additionally, the SIU continuously monitors provider billing patterns for all 50 states by leveraging the company’s data warehouse for data mining, including review of over/under utilization. Once the SIU has identified a potential incident of fraud, waste, or abuse, it will carry out the following:

1. The SIU will conduct an initial assessment of the incident that will be comprised of a review of all referral documentation which may include: form 1099, remittance advice, claim history, experience reports and all other relevant documents. Outside sources will be queried if needed. The SIU will also determine at this stage if the incident of suspected fraud includes fraud in the Medicaid Program. Concurrently, the SIU will place the suspicious incident/individual on a watch list and a formal investigation may be conducted.
2. The SIU will conduct the research and investigation and will coordinate with the appropriate departments within VSP in the fact gathering process necessary to confirm or negate the suspicions of fraudulent, wasteful, or abusive activities.
3. Once the fact gathering process is completed, the information will be evaluated by the SIU to determine whether further audit/investigation is required.
4. The SIU will make a final determination, thus deciphering if the incident truly comprises fraudulent intent or is more abusive in nature. If suspected fraud is identified at this initial stage, further audit, investigation will occur.
5. If the incident of suspected fraud includes fraud in the Medicaid Program, the SIU will ensure prompt referral of any potential FWA, in accordance with state law, to the State Medicaid program integrity unit, the State Medicaid Fraud Control Unit (MFCU), or to a VSP Medicare and Medicaid client, as required.
6. The SIU will prioritize the case, the strategy will be decided and any action toward future claims will be implemented.
7. Once all audits/investigations have been completed, all facts of the investigation will be presented to VSP's Medical or Optometric Director in the form of a recommendation for action.
8. When applicable, suspension of payments to a network provider will occur, for which the State Medicaid program integrity unit or MFCU determines there is a credible allegation of fraud in accordance with, 42, CFR, 455.23.

5. Sanctions and Disciplinary Actions

Fraudulent or abusive practices could result in the following sanctions and disciplinary actions:

• Providers – suspension or removal from the VSP panel, restitution and/or overpayments collected and referral to the appropriate state's governing Board of Optometry, Board of Ophthalmology, Medical Boards, and referral to law enforcement agencies
• Contract Laboratories – suspension or removal from the approved listing of VSP laboratories, restitution collected and referral to law enforcement agencies
• VSP employees – disciplinary action up to and including termination, demand for restitution, and referral to law enforcement agencies
• Members – Client notified of inappropriate activities and referral to law enforcement agencies
• Agents – suspension or removal as VSP agent, restitution collected and referral to the appropriate state's governing Insurance Department and referral to law enforcement agencies
• Clients – cancellation of plan, refusal to do business with the offending client, restitution collected

In cases where sufficient evidence is gathered to indicate that fraudulent activity has in fact occurred, VSP's Corporate Legal Counsel may coordinate actions with law enforcement agencies as well as be prepared to initiate civil litigation in furtherance of all anti-fraud, waste, and abuse objectives. VSP will cooperate fully Policy Number: C-0004 VSP Proprietary and Confidential Page 6 with all law enforcement agencies in the prosecution of such activities. If fraudulent activity has occurred as a result of actions by a VSP network provider, the SIU will coordinate with VSP’s Corporate Legal Counsel to engage with the provider and ensure the provider is afforded his/her due process rights pursuant to the VSP Dispute Resolution Process.

The SIU will collect data and maintain documentation of investigations to provide support for VSP actions. Cases under review or turned over to law enforcement for prosecution will be documented and reported to the Audit and Finance Committees of the Board of Directors. To meet standards of compliance, the SIU will report to states and requesting clients as required. VSP will also evaluate the effectiveness of its anti-fraud, waste and abuse efforts on an annual basis.

VSP is a member of the National Health Care Anti-Fraud Association (NHCAA). VSP will incorporate any additional fraud, waste and abuse detection and investigation measures deemed necessary to our operation and as required to comply with the NHCAA standards, and with local, state, or federal law.

1. 42, CFR, Section 455.2-Definitions
2. 42, CFR, Section 438.608-Program Integrity Requirements
3. 42, CFR, Section 455.23-Suspension of payments in cases of fraud
4. Policy C-018 Element 3-Compliance Program-Effective Training and Education
5. Employee Handbook-Fraud and Abuse Policy