U.S. Attorney General Eric Holder recently announced a crackdown against false medical billing with the arrest of 89 people from Miami to Los Angeles (including Houston) on charges of defrauding the government to the tune of approximately $223 million. Experts estimate that fraud, waste and billing abuses cost U.S. taxpayers 3 to 10 percent (between $30 billion and $100 billion annually) of all Medicare and Medicaid spending.
Those arrests are part of a six-year, $250-million effort to stop Medicare and Medicaid fraud and abuse. To say federal prosecutors are casting a wary eye toward government medical bills is an understatement.
Most physicians practicing in the U.S. will treat a federal health care program beneficiary at some point in their careers (most likely through Medicare or Medicaid). If physicians and other health care providers don’t know what constitutes fraud and abuse of these funds – and many don’t – then they’re severely hampered when trying to minimize their exposure. Health care providers also might find themselves on the wrong end of a Department of Justice enforcement action.
What is fraud?
Simply put, fraud is defined as obtaining something of value through intentional misrepresentation or deception.
In the context of a medical practice, fraud can mean billing for services or items not provided, charging for work that was already reimbursed by another insurer, or altering claims forms. Other types of medical billing fraud can include charging for an item or service for which payment needn’t be made (such as prescription samples), and making false statements when applying to take part in a federal health care program. The federal government provides a detailed description of various types of health care fraud and tips for billing compliance here.
Those who dare to defraud the health care system face real consequences:
A dermatologist was sentenced to two years’ probation and six months of home confinement, and ordered to pay $2.9 million after pleading guilty to one count of obstruction of a criminal health care fraud investigation related to falsifying lab tests and backdating letters to referring physicians in order to substantiate false diagnoses of Medicare patients.
Another physician was sentenced to 10 years in prison and ordered to pay $7.9 million in restitution after accepting cash payments for signing preprinted prescriptions and certificates of medical necessity for motorized wheelchairs for patients who were never examined.
Medicare billing abuse
Another type of false medical billing that’s made headlines lately is Medicare billing abuse, which is defined as inappropriate billing patterns inconsistent with accepted medical/billing practices.
This can include excessive charges for services or supplies, upcoding for procedures, billing for services performed by unqualified employees, claims for services that are not medically necessary, providing false or misleading information with the intention of influencing a decision to discharge a patient, and billing Medicare at a higher rate than a private insurer.
In the aforementioned recent crackdown by the federal government, a Houston nurse and a social worker were charged with billing the government for $8.1 million in bogus services for home health care. The defendants, who are brother and sister, allegedly used patient recruiters to obtain Medicare beneficiary information that they then used to bill for services that were not medically necessary and not provided.
Again, those who manipulate bills submitted to the federal government face serious fines and jail time. In one instance, a psychiatrist was fined $400,000 and permanently banned from taking part in federal health care programs for misrepresenting that he provided 30- to 60-minute face-to-face therapy sessions when he hadonly provided 15-minute medication checks. In another case, an endocrinologist billed routine blood draws as critical-care blood draws. He paid $447,000 to settle allegations of upcoding and other billing violations.
Cracking down on false billing in three acts
The U.S. government primarily uses two federal laws to address medical billing fraud and abuse: the False Claims Act (passed in 1863 to prevent weapons suppliers from defrauding the Union Army during the Civil War), and the Fraud Enforcement and Recovery Act (passed in 2009 to allow the federal government to reclaim money it overpaid).
A third law, the 2010 Affordable Care Act, created 32 new sections of the law related to fraud and abuse, including requiring Medicare/Medicaid providers to establish compliance programs. The Affordable Care Act also allotted $250 million for fraud and abuse enforcement. This year, the Act requires that medicine and device manufacturers publicly report nearly all gifts or payments made to physicians.
The creation of the Fraud Enforcement and Recovery Act and the fraud investigation elements of the Affordable Care Act leave no doubt that the government is taking medical billing fraud and abuse very seriously.
Minimizing fraud and abuse claims
As stated here before, a well-trained, competent office staff can save physicians innumerable legal headaches. Training in proper Medicare and Medicaid billing is no exception. Medical professionals can reduce their chances for government scrutiny by taking care to sufficiently train staff members in billing policies and procedures.
The Office of the Inspector General (OIG) offers extensive information about fraud investigations and proper training on its website. The Centers for Medicare & Medicaid Services (CMS), which administers those programs, has published “Medicare Physician Guide: A Resource for Residents, Practicing Physicians, and Other Health Care Professionals,” which is available here.
By now, you’re getting the idea – scrutinize Medicare and Medicaid bills before submitting them for reimbursement because we know the federal government will. This self-scrutiny should include:
Ø Implementing compliance and practice standards;
Ø Conducting routine inter-office review of billing practices;
Ø Checking the OIG’s website here once per year for its Advisory Opinions relating to medical billing procedures;
Ø Reviewing health care providers’ credentials to determine if they’ve been excluded from participation in federal health care programs. That searchable database is here;
Ø Considering enlisting a certified public accountant to complete a yearly external audit of your group’s billing practices;
Ø Seeking assistance from an experienced health care lawyer to provide legal advice on billing and coding issue; and
Ø Responding appropriately to detected offenses and develop a corrective action plan.
Staying off federal investigators’ radar for Medicare and Medicaid billing is all part of maintaining sound billing practices for any medical office. Keeping accurate and complete medical records for services provided and completed diagnoses already should be part of your day-to-day business. But every insurance claim – for Medicare or any other private-sector provider – should be properly supported by documentation. The federal government may review a patient’s medical records to verify a claim, and will typically take the position, “If you didn’t document it, you didn’t do it.”
With hefty fines and even jail time resulting from federal fraud and abuse violations, it’s up to health care providers to decide if they’re willing to make the preventative checks necessary to stay off of Uncle Sam’s radar.
And as always, when it doubt, seek counsel from a qualified health care attorney.
— Kimberly K. Bocell, a former registered nurse, is a shareholder at Dallas’ Chamblee, Ryan, Kershaw & Anderson, where she represents healthcare providers in all facets of health law.