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!
Telemedicine pharmacy arrangements continue to be of significant interest to fraud enforcement. A 2018 case in which four individuals and seven companies were indicted ended in a month-long jury trial of one of the individuals, a Florida pharmacy owner. The federal jury trial in the billion-dollar telehealth pharmacy fraud scheme resulted in conviction on 22 counts of mail fraud, conspiracy to commit health care fraud and introduction of misbranded drugs into interstate commerce. Sentencing in the case is set for May of 2022. Other co-conspirators entered plea agreements along the way, pleading guilty to various charges including felony conspiracy to commit health care fraud, felony misbranding, conspiracy to commit wire fraud, and fraudulent telemarketing of dietary supplements, skin creams and testosterone. Many of these are still awaiting sentencing, also expected to be scheduled sometime in 2022.
The scheme involved several individuals, compounding pharmacies and telemarketers engaged in a conspiracy to commit health care fraud, mail fraud and introducing misbranded drugs into interstate commerce. Peter Bolos, along with two other co-conspirators, owned and operated Synergy Pharmacy in Palm Harbor, Florida. Working with HealthRight, a telemarketer, the co-conspirators generated prescriptions for drugs such as pain creams, scar creams, and vitamins. Using the HealthRight telemarketing platform, they would call consumers and deceive them into providing their personal insurance information and accept the drugs. HealthRight then communicated the prescription requests to physicians who authorized the prescriptions without ever interacting with the patients, and paid those physicians for issuance of the prescriptions. Through this scheme, the co-conspirators were able to solicitate insurance coverage information from consumers across the county for prescription pain creams, fraudulently obtain prescriptions, mark up the prices of the drugs and bill private insurance carriers.
So, you’ve received a letter from the Zone Program Integrity Contractor or “ZPIC” to review for the accuracy and justification of services reimbursed by the Medicare program. In other words, a dreaded ZPIC Audit or ZPIC Investigation. Now What?!
First, remain calm. Chances are an audit by ZPIC will go well if you have been diligent in completing patients’ medical records, justifying medical necessity, and your billing is accurate and well supported by the patients’ medical records. Even if errors are discovered, most errors do not represent fraud, that is, the errors were not committed knowingly, willfully and intentionally. Still, a ZPIC audit can be daunting and if Medicare has noticed a pattern of billing that it considers suspect, or there has been a complaint against you, the ZPIC audit will be rigorous, and often adversarial. The ZPIC’s job is to protect the program from potential fraud. It will conduct data analysis, including statistical outliers within a well-defined group, or other analysis to detect patterns within claims or groups of claims that might suggest improper billing. Data analysis can be undertaken as part of a general review of claims pre or post submission, or in response to information about specific problems arising from complaints, provider or beneficiary input, fraud alerts, CMS reports, Medicare Area Contractors, or independent governmental or nongovernmental agencies.
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.