Avoiding Medicaid and Medicare Fraud and Abuse

Guide for every Physician:

Every day we hear about new doctors being arrested for Medicaid and Medicare Fraud. It’s sad and shameful to hear, especially when some of those doctors are practicing in our so-called “Russian” community. Some of the doctors arrested later become my clients. Instead of waiting for another physician to lose his license because of the way he runs his practice, I decided to write this article as a “Road Map” on how to avoid Medicaid and Medicare Fraud and abuse.

Most doctors strive to work ethically and submit proper claims for payment. Society places enormous trust in physicians, and rightly so. Trust is at the core of the physician-patient relationship. When our health is at its most vulnerable, we rely on physicians to use their expert medical training to put us on the road to a healthy recovery.

The Federal Government, however also places enormous trust in physicians. Medicare, Medicaid, and other Federal health care programs rely on physicians’ medical judgment to treat beneficiaries with appropriate services and to bill for such services correctly. This obviously is not always the case. I represent a lot of doctors in my practice as an attorney. In my legal practice I find one thing interesting about doctors: there are some doctors (I will obviously never name them) who deliberately run their practices in violation of the laws and clearly deserve to be punished. There are others (who comprise most of my clients), who violate the laws unintentionally – simply by not knowing that they were doing something wrong and that certain billing practices are illegal.

Thus, my article is intended for the second group – those physicians who want to run their practice in compliance with every State and Federal regulation and who need my help to identify “red flags” that could lead to potential liability in law enforcement and administrative actions.

The five most important Federal fraud and abuse laws that apply to physicians are the False Claims Act (FCA), the Anti-Kickback Statute (AKS), the Physician Self-Referral Law (Stark law), and the Civil Monetary Penalties Law (CMPL). Government agencies, including the Department of Justice, the Department of Health & Human Services Office of Inspector General (OIG), and the Centers for Medicare & Medicaid Services (CMS), are charged with enforcing these laws.

Under the False Claims Act: It is illegal to submit claims for payment to Medicare or Medicaid that you know or should know are false or fraudulent. Filing false claims may result in fines of up to three times the programs’ loss plus $11,000 per claim filed. Criminal penalties for submitting false claims include imprisonment and criminal fines. Physicians have gone to prison for submitting false health care claims.

Anti-Kickback Statute (AKS) is a criminal law that prohibits payment of “remuneration” to patient referrals or the generation of business. Remuneration includes anything of value and can take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies. In some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime.

Fee Sharing – It is illegal for a doctor to be in business with non-doctor. Thus, any fees charged by a doctor cannot be split with non-doctor, even if this non-doctor invested into the medical facility such doctor occupies. Yes, as an attorney I have seen a number of Management and Sublease Agreements and I went over every line in this agreement with my doctor clients. However, just recently I met a doctor who told me she was getting “30%” of billing done by a management company and she saw nothing wrong with this arrangement. It’s a miracle that I met this doctor before Office of Medicaid Inspector General did…

Fraudulent Billing – Billing is Ahyles foot of every physician. I tell all my physician clients: When you submit a claim for services performed for a Medicare or Medicaid beneficiary, you are filing a bill with the Federal Government and certifying that you have earned the payment requested and complied with the billing requirements. If you knew or should have known that the submitted claim was false, then the attempt to collect unearned money constitutes a violation.

A common type of false claim is “upcoding,” – using incorrect billing codes for more severe illness than actually existed or a more expensive treatment than was provided. Another common problem with billing – billing for services that were “not medically necessary”.

Here are just some of the examples of incorrect billing:

• A psychiatrist was fined $400,000 and permanently excluded from participating in the Federal health care programs for misrepresenting that he provided therapy sessions requiring 30 or 60 minutes of face-to-face time with the patient, when he had provided only medication checks for 15 minutes or less. The psychiatrist also misrepresented that he provided therapy sessions when in fact a non-licensed individual conducted the sessions.

• A dermatologist was sentenced to 2 years of probation and 6 months of home confinement and ordered to pay $2.9 million after he pled guilty to one count of obstruction of a criminal health care fraud investigation. The dermatologist admitted to falsifying lab tests and backdating letters to referring physicians to substantiate false diagnoses to make the documentation appear that his patients had Medicare-covered conditions when they did not.

• A cardiologist paid the Government $435,000 and entered into a 5-year Integrity Agreement with OIG to settle allegations that he knowingly submitted claims for consultation services that were not supported by patient medical records and did not meet the criteria for a consultation. The physician also allegedly knowingly submitted false claims for E&M services when he had already received payment for such services in connection with previous claims for nuclear stress testing.

• An endocrinologist billed routine blood draws as critical care blood draws. He paid $447,000 to settle allegations of upcoding and other billing violations.

In conclusion, I want to add that all physicians study extremely hard to become doctors – they went through years in college, medical school, residency training. Most physicians come peningles from Medical School and are eager to open their own offices and start making money to recoup the costs and to pay off their college loans. Very often, unknowingly they get themselves into schemes outlined above and end up losing their hard earned medical licenses and even going to jail. My job as their health care law attorney is to prevent this from happening.

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