Healthcare Fraud Scheme Indictment Starts the New Year

The U.S. Attorney arrested 13 people in a $100 Million healthcare fraud scheme in NY and NJ involving automobile insurance claims.  Some of the facts alleged include—

  • Bribed 911 operators and hospital employees for confidential information of insured drivers
  • Unnecessary and painful medical procedures
  • A non-physician owning medical clinics
  • Paying hundreds of thousand of dollars to “runners” who used the money to bribe people

Healthcare businesses that largely serve people injured in motor vehicle accidents remain a top tier focus for law enforcement and special investigative units (SIUs) of insurers.  But so do many other providers in the healthcare sector, such as pharmacies, durable medical equipment (DME) providers, addiction treatment providers and labs.  Payer and governmental presumption is often that financial motives are driving clinical behavior, NOT documented medical necessity.  Hence the need for active compliance plans and policies and procedures that don’t sit on a shelf, but rather are woven into daily business and clinical operations.  Nothing less than the right contracts, the right compliance plan and the right business culture will establish and maintain a sustainable healthcare business!

Permissible Payments For Referrals Under The Federal Anti Kickback Statute

anti kickback

anti kickbackBy: Karen Davila

The term “payment for referral” strikes fear in the hearts of health care providers throughout the country because of the significant prohibitions under the federal Anti-Kickback Statute (AKS).  And, Florida’s Patient Brokering Act (PBA) casts an even bigger shadow over arrangements involving payment in exchange for referrals.  There are other statutory restrictions as well, which may apply depending upon the services for which a referral is being made.  Those include but are not limited to statutes prohibiting physician fee-splitting and the federal Eliminating Kickbacks in Recovery Act (EKRA) (applicable to referrals to recovery homes, clinical treatment facilities, or laboratories in an effort to stave off growing opioid-related fraud), and the potential collateral damage of a false claim under the federal False Claims Act (FCA) if any of the above statutes are violated.

So, is there any scenario where a payment may be made by a health care provider in exchange for referrals?  The answer is yes- there is a safe harbor under the AKS (42 U.S. C. §1320a-7b(b)) specifically for such arrangements.  This safe harbor is not commonly used and likely means revision to existing arrangements to come into compliance with its specific requirements.  But it may be worth considering if the referral (and payment for that referral) is not otherwise prohibited as noted above.Continue reading

A Self-Audit Checklist for Laboratories

By: Dean Viskovich

The Office of Inspector General (OIG) and other Federal agencies charged with responsibility for enforcement of Federal law have emphasized the importance of voluntarily developed and implemented compliance plans.  The government, especially the OIG, has a zero- tolerance policy towards fraud and abuse and uses its extensive statutory authority to reduce fraud in Medicare and other federally funded health care programs.  The OIG believes that through a partnership with the private sector, significant reductions in fraud and abuse can be accomplished.  Compliance plans offer a vehicle to achieve that goal.  The OIG has provided a model compliance plan for clinical laboratories to assist laboratory providers in crafting and refining their own compliance plans.

The OIG suggests that the comprehensive compliance program should include the following elements:

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OIG’s Audit found Medicare Contractors Were Not Consistent in How They Reviewed Extrapolated Overpayments in the Provider Appeals Process

oig audit

oig auditBy: Karina P. Gonzalez

When an overpayment is identified in Medicare Part A or B claims, providers can contest the overpayment amount by using the Medicare administrative appeals process.  Because of the large difference between overpayment amount in a sample from an extrapolated amount, the OIG states that it is critical for the review process during an appeal to be fair and consistent. In the first and second levels of Medicare appeals (redetermination and reconsideration) extrapolated overpayments are reviewed by MAC (Medicare Administrative Contractors) and by QICs (Qualified Independent Contractors).

The OIG audit was to make sure that the MACs and the QICs reviewed the appealed extrapolated overpayments consistently and in compliance with CMS requirements.

What OIG found was that CMS did not always provide sufficient guidance and oversight to ensure that these reviews were performed in a consistent manner.  The most significant inconsistency identified was the use of a type of simulation testing that was performed only by a subset of contractors.  The test was associated with at least $42 million in extrapolated overpayments that were overturned in fiscal years 2017 and 2018.Continue reading

Modifier 25 Requirements for Avoiding Potential Billing Fraud

modifier 25

modifier 25By: Dave Davidson

On February 4, 2020, the Department of Justice announced a $1.5 million settlement with Southeastern Retina Associates, a 17 physician practice, with offices in Tennessee, Georgia and Virginia.  The sole basis of the claim was the alleged misuse of the Modifier 25 billing code and charging for exams at higher levels than warranted.  The claim was initiated by a whistleblower, who will receive $270,000 from the settlement.

Use and potential abuse of Modifier 25 is obviously not unique to retina surgeons.  In fact, the modifier can be very beneficial to providers, since it allows for payment for those patient visits when the care provided exceeds the scope of the scheduled appointment.  However, given the potential for abuse and the many watchful eyes of the government (the Southeastern Retina case was investigated by the U.S. Attorney’s Office, the HHS Office of Inspector General, the U.S. Office of Personnel Management, the FBI, and the Tennessee Attorney General’s Office) and wannabe whistleblowers, a periodic review of a provider’s billing practices is always a good idea.Continue reading

Law Enforcement Referrals by UPICs

Florida medical attorneys

UPIC investigatorBy: Matt Fischer

CMS contractors such as Unified Program Integrity Contractors (UPICs) are tasked with ensuring that Medicare pays the right amount for covered services by legitimate providers.  Specifically, a UPIC’s main goal is to identify cases of suspected fraud, waste and abuse, and additionally, to take immediate administrative action to protect federal program funds.  Within its administrative action toolkit, apart from the common pre- or post-payment reviews and payment suspensions, UPICs have the ability to refer cases of potential fraud to law enforcement agencies.Continue reading

OIG Unveils Latest Tool for Evaluating Fraud Risk

OIG fraud risk
OIG fraud risk
https://oig.hhs.gov/compliance/corporate-integrity-agreements/risk.asp

By: Karina Gonzalez

The Office of Inspector General (OIG) announced the launch of a new tool on its website titled the “Fraud Risk Indicator”.  The OIG has stated that the purpose for the tool is to provide guidance on how it has evaluated risk in settling False Claims Act (FCA) cases and to publicize information about where FCA defendants fall on the OIG’s risk spectrum.  This tool can benefit patients, healthcare industry professionals and other individuals who may find this information relevant.   This tool will also benefit the public with information about providers charged under the FCA that are at high risk for committing healthcare fraud. The Indicator shows the Risk Spectrum from Highest Risk to Lower Risk.Continue reading

Pharmacy Billing Basics: Know Your Payor!

pharmacy billing

pharmacy billingBy: Michael Silverman

In giving consideration to whether healthcare regulations apply to a proposed course of conduct it’s absolutely vital for a pharmacy to know its payor! This is especially so in the context of patient marketing and the various regulatory prohibitions on paying for healthcare referrals. Unfortunately, some pharmacy owners remain a bit mixed up about who the ultimate payor is for the medications they dispense, and, depending on that pharmacy’s billing operations, such mistakes can have devastating consequences.

A large part of this confusion might be attributed to the fact that in most instances, a pharmacy is not billing the ultimate payor directly (unlike a DMEPOS provider that may be directly submitting claims to Medicare Part B), but rather, the pharmacy is billing an intermediary entity called a Pharmacy Benefit Manager (“PBM”), which is usually a commercially run entity (non-government owned) that manages and adjudicates claims on behalf of health insurance plans that cover pharmacy benefits.Continue reading