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Health Care Fraud Enforcement Continues to Rock Pharmacy Industry

April 30th, 2021 by

pharmacy fraudBy: Karen Davila

Yet again, the fraud enforcement arm of the DOJ strikes out against fraud in the pharmacy industry.  Two new cases shed continuing light on the ongoing fraud.

Announced last week by the DOJ, the owner/operator of five pharmacies in New York pled guilty to charges stemming from a scheme to defraud Medicare and Medicaid by billing for prescription drugs that were not dispensed, not prescribed, not medically necessary or dispensed when the pharmacy had no authority to dispense the prescription drugs.  This blatant disregard for the law was magnified when the owner/operator used the ill-gotten gains of her scheme to purchase luxury items like cars and jewelry.  Nothing screams “come and get me” like openly flaunting the money taken from the government. read more

Pharmaceutical Company Brings Lawsuit in Florida to Stop Alleged 340B Fraud

November 10th, 2020 by

gilead complaint november 2020By: Jacqueline Bain

On November 3, 2020, Gilead Sciences Inc. filed suite in the Southern District of Florida Federal Court seeking damages from and injunctions against 58 defendants in South Florida for their part in an alleged scheme to defraud Gilead for millions of dollars. The defendants are comprised of medical clinics, laboratories, pharmacies and their owners, officers and employees.

Gilead is a pharmaceutical company that develops and manufactures drugs for the prevention and treatment of HIV, AIDS, hepatitis B and hepatitis C. Gilead has created a medication assistance program that provides eligible uninsured persons with free medication to help protect them from becoming infected with HIV. Gilead alleges that the defendants are exploiting the program’s charitable purpose for their own financial gain, endangering patients in the process.

The alleged scheme is complex and involves a lot of people participating in a wide-spread conspiracy, yet is exactly the type of convoluted scheme that regulators and insurance companies target. If the allegations are true, nearly 60 fraudulent operators will have to find another line of business. The OIG is likely to be following this very closely to determine if federal charges should follow. read more

Lab Owner Indictment Update

October 7th, 2020 by

fhlf laboratory complianceBy: Dean Viskovich

On October 6, 2020, the Unites States Attorney’s Office of the Western District of Louisiana announced that George M “Trey” Fluitt III of Monroe, Louisiana was indicted.  The federal grand jury indicted the lab owner for paying bribes and kickbacks in violation of the Anti-Kickback Statute, resulting in improper Medicare billing of approximately $117 million. Fluitt was the owner and operator of Specialty Drug Testing, LLC and is alleged to have solicited paid kickbacks and bribes in return for patient DNA specimens and physicians’ orders for cancer genetic and pharmacogenetic testing. Medicare allegedly paid Specialty Drug Testing, LLC $28,726,299 as a result of the fraudulent claims. If convicted, the defendant faces up to five years in prison for each count of conspiracy to defraud a healthcare program.  Fluitt also faces 10 years in prison for illegal kickbacks, a $250,00 fine, forfeiture and restitution.

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Role of Laboratories in Determining Medical Necessity

February 12th, 2018 by

medical necessity laboratoryBy: Karina Gonzalez 

A recent whistleblower action (by UnitedHealthcare Medical Director, Tina Groat) against Boston Heart (laboratory) was brought under the federal False Claims Act and deals with medical necessity issues.  As part of the analysis, the Court reviewed whether a laboratory [or supplier like DME] must determine the medical necessity of the ordering physician.  Boston Heart contended that a doctor, not a laboratory, determines the medical necessity of a test.  Boston Heart argued that when a laboratory bills Medicare for testing ordered by a physician, it must only maintain documentation it receives from the ordering physician and ensure that the information that it submitted with the claim accurately reflects the information it received from the ordering physician. It noted that the CMS-1500 form certification does not require that the billing lab to make the medical necessity determination. The lab certifies that the services are medically necessary by relying on the clinical determination of the treating physician. read more

Medicare Audit and Appeal Process from A to Z: Challenging Extrapolated Overpayments

February 1st, 2018 by

ZPIC auditBy: Matt Fischer

Medicare claims are processed by organizations (i.e. Medicare Administrative Contractors (“MACs”)) that contract with the Centers for Medicare & Medicaid Services (“CMS”) to act as liaisons between the Medicare program and providers and suppliers.  As CMS continues to evolve its enforcement strategies to reduce fraud and abuse in the system, post payment reviews utilizing statistical sampling still remain as one of its key methods.  These reviews are conducted not just by MACs but also by Zone Program Integrity Contractors (“ZPICs”).  When a review is completed, providers and suppliers often face large extrapolated overpayment amounts based on the analysis of a small sample of claims.  Therefore, providers and suppliers need to understand the process and most importantly, how to effectively navigate the system.

ZPICs are a part of Medicare’s integrity program and took the place of Program Safeguard Contractors (“PSCs”) that operated with the same goal in the past.  ZPIC reviews initiate in various ways such as from whistleblower complaints, through ZPIC investigations (e.g. using data mining), and from referral from the Office of Inspector General (“OIG”).       read more

OIG Reviews Medicare Payments for Telehealth Services

September 19th, 2017 by

oig work plan 2017By: Karina Gonzalez

The US Department of Health and Human Services, Office of Inspector General (OIG) reports that as part of its 2017 Work Plan it will be reviewing Medicare Part B payments for telehealth services. These services support rural access to care and Medicare pays telehealth services provided through live, interactive videoconferencing between a Medicare beneficiary located at an origination site and a healthcare provider located at a distant site.

The OIG is reviewing Medicare claims that have been paid for telehealth services that are not eligible for payment because the beneficiary was not at an originating site when the consultation occurred. A beneficiary’s home or office is not an originating site, an eligible originating site must be a practitioner’s office or a specified medical facility. read more

Ugh, Healthcare Compliance.

June 20th, 2017 by

compliance planBy: Jacqueline Bain

I had a law school professor who repeatedly referred to his class as “Doom at Noon.”  The topic was dry, the cases were boring and, if not for the professor himself, the class would have been unbearable. I think of that, all these years later, every time I have to counsel a client on a topic that makes his or her eyes glaze over, like healthcare compliance.

Compliance means that you’re operating within the bounds of law. Sure, it sounds boring, but it’s a giant undertaking for any business, and especially for one so regulated as healthcare. Over the last three decades, the Department of Health and Human Services’ Office of the Inspector General has urged the private healthcare community in to take steps to combat fraudulent conduct and prevent the submission of erroneous claims. read more

Copay Waiver Questions: OIG Opines that Charities Allowed to Help with Patients’ Insurance Obligations

January 10th, 2017 by

financial hardshipBy: Jacqueline Bain

In the healthcare business, giving a patient a break on a health insurance copay is often viewed as suspicious. The reasoning for the suspicion is that the financial incentive may give one provider a competitive advantage over another, or persuade a patient to seek services that might not be medically necessary.  Moreover, any person who interferes with a patient’s obligations under his/her health insurance contract may be viewed as tortuously interfering with that contract. However, in an advisory opinion issued on December 28, 2016, the OIG opined that, in certain instances, a non-profit, tax-exempt, charitable organization could provide financial assistance with an individual’s co-payment, health insurance premiums and insurance deductibles when a patient exhibits a financial need.

The party requesting the advisory opinion was a non-profit, tax-exempt, charitable organization that did not provide any healthcare services and served one specified disease. The non-profit, tax-exempt, charitable organization is governed by an independent board of directors with no direct or indirect link to any donor. Donors to the non-profit, tax-exempt, charitable organization may be referral sources or persons in a position to financially gain from increased usage of their services, but may not earmark funds and or have any control over where their donation is directed. read more

EMTALA Compliance: A Primer

October 12th, 2016 by

EMTALABy: Dave Davidson

In 1986 President Ronald Reagan signed the Emergency Medical Treatment and Active Labor Act (EMTALA) into law.  Since then, the application of the law has been expanded and refined.  It was one of the first laws giving the government the authority to dictate certain operations of a hospital.  While other laws and regulations such as the Anti-Kickback Statute and the Stark Law have become more of a focus for health care providers, EMTALA remains an area of active enforcement.  All providers with hospital privileges should therefore be aware of its application.

The policy behind the law is fairly straightforward.  Hospitals with emergency departments should not be able to turn away patients needing care because of their inability to pay (no more “wallet biopsies” as part of triage).  Likewise, hospitals should not be able to “dump” patients on other facilities for reasons other than for advanced care.

The requirements of the law are also very basic.  If a patient comes to an emergency department and requests an examination or treatment for a medical condition, the hospital must provide an appropriate medical screening exam, within its capability, to determine whether or not the patient has an emergency medical condition.  The screening provided goes beyond simple triage, and must be performed by a clinical provider such as a physician, nurse practitioner, or physician’s assistant. read more

The OIG Addresses Free Patient Transportation Issues

October 29th, 2015 by

vanBy: Jacqueline Bain

The issue of whether a medical provider can provide free patient transport is one that we are asked to look into a few times every year. Aside from the liability issues that it raises, it is one that we have never been able to justify from an Anti-Kickback and Patient Brokering perspective.  The fact is, even given the good intentions of most providers to allow their patients easier access to healthcare, transporting patients to and from your facility or practice is providing them with something of value in return for coming to see you.  However, under slightly different facts than we are usually asked to consider the question, last week, the Department of Health and Human Services Office of the Inspector General (“OIG”) came to a different conclusion.

The OIG issued an advisory opinion upon the request of a hospital system who had asked whether it could provide free transportation to persons who had limited access to public transportation to access the hospital’s facilities. The hospital system offered that the town had inadequate and infrequent public transportation services which would act as a barrier to healthcare for local residents.  The hospital system offered the following facts for consideration: read more