Health law is the federal, state, and local law, rules, regulations and other jurisprudence among providers, payers and vendors to the healthcare industry and its patient and delivery of health care services; all with an emphasis on operations, regulatory and transactional legal issues.
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!
Enforcement against medical device companies is not new and yet, these companies continue to engage in schemes that land them in hot water. Frequently the same schemes are repeated over and over- some form of payment by the device company to a physician who selects/recommends the device to patients. In some cases, the payment is in the form of an honorarium for speaking engagements. In others, the payment is an all-expense paid travel to attend device company-sponsored “CME” in exotic locations or consulting fees for assisting in the evaluation and design of the device.
Announced yesterday by the U.S. Department of Justice (DOJ), is the settlement of allegations against Florida-based Arthrex Inc., a medical device company that specializes in orthopedic products. Under the settlement agreement, Arthrex will pay $16 million for allegedly paying kickbacks to an orthopedic surgeon (Dr. Peter Millett) in Colorado. The “payment” in this case was structured as royalty payments purportedly to compensate the orthopedic surgeon for his “contributions” to the development of two of Arthrex’s products when in fact the “payment” was intended to induce the surgeon’s recommendation/selection of the Arthrex products. By offering the payments to the surgeon with the intent to induce purchase of Arthrex’ products which were then billed to Medicare, Arthrex violated the Anti-Kickback Statute (AKS) as well as the False Claims Act. read more
Genetic tests are valuable because they can provide important information to patients and their medical providers regarding diagnoses, treatment, and disease prevention. However, the rapid growth in the number of tests ordered, especially in light of the telemedicine expansion during the pandemic, has invited well-earned scrutiny to the industry.
Make no mistake: genetic testing is heavily regulated (and enforced). The Federal Anti-Kickback Statute, Eliminating Kickbacks in Recovery Act, and Commercial Insurance Fraud Law have all been used to prosecute unscrupulous marketers, call centers, and telemedicine providers in the last few months. Kickbacks in exchange for genetic specimens are just as illegal as kickbacks for patients. Three months ago, a Florida man was sentenced to 10 years in prison for conspiracy to commit health care fraud. His actions resulted in the submission of approximately $3.3 million in fraudulent claims to Medicare for genetic testing. read more
While not a ‘classic’ kickback – such as the scenario of a practitioner receiving remuneration in exchange for a prescription or referral of healthcare business – the routine waiver of patient financial responsibly by a healthcare provider ALSO constitutes healthcare fraud, even for commercially insured patients!
Unfortunately, such a serious violation does not readily come to mind for many of those operating in the healthcare space, but its relatively straightforward once you think about it. In essence, a financial incentive is being provided to the patient to utilize the services of a certain healthcare provider by virtue of that individual not being subjected to out-of-pocket expense they normally would be subjected to if they were to utilize another similarly situated provider. read more
Healthcare fraud law should be easy to understand. If you don’t set out to lie, cheat, or steal to make money, you should be safe, right?
Unfortunately, the laws can be incredibly complex. Add in partnerships and sophisticated work-sharing agreements, and untangling the mess of responsibility could be even more difficult.
We’ll explain a few examples of healthcare law and fraud to make the problem easier to understand. But know that it’s always wise to contact a lawyer when you think you’re engaged in activity that could be considered fraudulent.
Inadvertent Healthcare Fraud Cases
Sometimes, the decisions you make as a healthcare professional break the laws, even if you never intended to do so.
Consider the Stark Law. Under that statute, you’re not allowed to refer a Medicare patient to any entity with which you have a financial relationship. In theory, you could break that law by:
Referring patients for tests and accepting a portion of the fees billed for those tests.
Giving your doctors an incentive for some kinds of tests.
Improperly paying your physicians
Making an arrangement with a medical center and promising to refer patients for some kinds of tests.
Inadvertent fraud is real, and these cases are complex. It’s wise to work with a lawyer, especially if healthcare arrangements are involved.
What About the Healthcare Fraud Law False Claims Act?
Typically, healthcare professionals know that they’re breaking this particular fraud law. They doctor the paperwork and hope to make money before anyone notices. But sloppy bookkeeping could also play a role. If you’re not absolutely sure that you’re submitting everything properly, wait and think before you take action.
Healthcare Fraud Law: Criminal Statutes
Sometimes, your mistakes aren’t inadvertent or paperwork related. If you intend to break the law and you know your conduct is wrong, you could be liable for criminal charges.
Two main criminal statutes apply to medical professionals, and they involve:
Kickbacks. If you get something in return for Medicare or Medicaid business, you’re involved in an illegal scheme.
Fraud. If you intend to falsify records or documents for your financial gain, you could face legal challenges.
Criminal charges could end your career. And they could also put you in jail for long periods of time.
What Should You Do When You Suspect Fraud?
If you’ve been reading this list with a growing suspicion that you’re engaged in something unethical, take action.
With off-the-shelf knee and lumbar orthotics (HCPCS Code OR03) included in Medicare’s Round 2021 of Competitive Bidding (and thus ability to supply such devices to beneficiaries living in competitive bid areas limited to bid-winners), non bid-winning DMEPOS providers have been scrambling to find new revenue streams for their business models.
Many such providers are looking to continue providing orthotics – such as prefabricated (HCPCS Code OR02) or custom fabricated (HCPCS Code OR01) braces.
Unfortunately, a misunderstanding that could jeopardize Medicare billing privileges seems to be spreading. It pertains to DMEPOS provider personnel/fitter requirements to enable billing for such prefabricated or custom fabricated orthotics; allow me an opportunity to clear the air. read more
Almost two years after “Operation Brace Yourself” regarding purported telemedicine and orthotic bracing fraud made national headlines, on February 4, 2021 the Department of Justice Announced that a major player in that fraud – Florida businesswoman Kelly Wolfe – recently pled guilty to criminal health care and tax fraud charges.
Operation Brace Yourself was a 2019 crackdown on the illegal use of telemarketing and telemedicine to generate fraudulent claims for DME orders, whose reach spanned continents and ultimate implications defrauded taxpayers out of billions of dollars.
According to the Department of Justice Press Release and Settlement Agreement, Mr. Wolfe was seemingly a significant mastermind in establishing hundreds of DME companies that went on to defraud US taxpayers and Medicare beneficiaries.
Here are some highlights of the recently signed Settlement Agreement between the United States DOJ, Kelly Wolfe and her company Regency, Inc. read more
Following last year’s growth expansion, Florida Healthcare Law Firm in Delray Beach, FL has hired board certified attorney (in Health Law) Karen Davila, as of January 4, 2021. Karen will play an essential role representing healthcare businesses with a specialized focus on retail pharmacy owners and operators. Karen has nearly 30 years’ experience in the health law space and is licensed in both Florida and Illinois.
Florida Healthcare Law Firm has announced that they have added Karen Davila to the team. Karen brings a wealth of healthcare business expertise working with national corporate pharmacies, large hospitals and local family-run businesses. As part of the firm’s expert pharmacy law team, Karen will advise independent pharmacies on matters such as PBM audits, regulatory compliance and transactional support. She also has experience complex provider relationships, reimbursement, fraud and abuse, DEA and FDA regulatory compliance, scope of practice of health care professionals, and quality/patient safety issues across the health care continuum. read more
Pharmacies and their pharmacists are in a very tough spot in the current regulatory enforcement environment. This is particularly true with dispensing controlled substances. Headlines like the below are commonplace:
DEA RAIDS PHARMACY AS PART OF LOCAL DRUG SWEEP
PHARMACY PAYS $500,000 IN PENALTIES FOR CONTROLLED SUBSTANCES ACT VIOLATIONS
MAN ARRESTED USING DOCTOR’S PRESCRIPTION PAD TO WRITE FRAUDULENT RX’S
So, how do you avoid filling a fraudulent prescription for controlled substances? Before getting into the nitty gritty, it is important to lay the foundation of standard of care and the corresponding responsibility so pharmacies and pharmacists can evaluate what steps are most likely to mitigate these risks.
As background, federal law states that the primary responsibility for prescribing controlled substances rests with the prescriber. However, that same law places a “corresponding responsibility” on the pharmacist to assure each prescription is written for a legitimate medical purpose pursuant to a valid patient-prescriber relationship. 21 CFR §1306.04(a).
Under Florida law:
A pharmacist may not dispense a Schedule II-IV controlled substance to any patient or patient’s agent without first determining, in the exercise of her or his professional judgment, that the prescription is valid. F.S. §893.04 (2)(a).
A prescriber or dispenser must consult the prescription drug monitoring system, eForce, to review a patient’s controlled substance dispensing history before prescribing or dispensing a controlled substance.S. §893.055
Once you have a clear understanding of a pharmacist’s liability, you can then consider ways to mitigate the inherent risks in filling controlled substance prescriptions. read more
A 2018 Department of Justice civil settlement involving a Florida interventional pain physician was a cliff hanger when it surfaced, especially vis a vis the issue of the so-called Company Model, where anesthesiologists and referring physicians jointly owned an anesthesia provider. The Daitch settlement involved interventional pain specialists who settled the case for $2.8 Million. There, the government claimed that a mass of urine drug tests weren’t reasonable or medically necessary. But the issue buried in the settlement call the issue of intertwined medical businesses and the Company Model into question.
The so-called Company Model involves the formation of a company that provides anesthesia services. It’s jointly owned by anesthesiologists and referring physicians. Theoretically, on a Monday, the anesthesiologists own the anesthesia practice and bill for all anesthesia services performed at a GI lab or ASC. On a Tuesday, however, the new company (jointly owned by the same anesthesiologists and the referring physicians) steps in and starts billing for the anesthesia services, thus indirectly sharing a part of the profits with the physicians who are generating the anesthesia referrals.