Civil Investigative Demand: What to Expect in a Heightened Regulatory Environment

DOJ InvestigationBy: Matt Fischer

The United States Department of Justice (DOJ) has the power to issue civil investigative demand (CIDs) when the DOJ has reason to believe that a person may be in possession of information relevant to a false claims investigation.  The DOJ is empowered to serve CIDs by the False Claims Act (FCA).  A CID is similar to a grand jury subpoena; however, it provides greater versatility in the use of the information obtained.  In addition to requiring the production of documents similar to a grand jury subpoena, CIDs demand other types of discovery responses and the information gathered may be shared between the civil and criminal sides of an investigation.  Given this flexibility and with the passage of the Fraud Enforcement and Recovery Act of 2009 (which changed the law to allow issuance of a CID without the personal signature of the Attorney General), the DOJ has substantially increased its use of CIDs in the realm of healthcare law enforcement.    Continue reading

The United States Supreme Court adopted an “Implied Certification Theory” in “some circumstances”

bcbs lawsuitBy: Karina Gonzalez

The Supreme Court of the United States in the case of Universal Health Services v. United States ex rel. Escobar (decided 6/16/2016) extended the reach of the False Claims Act (FCA) to cover implied false certifications made “in certain circumstances” by healthcare providers in requesting payment for goods and services.

At issue was a theory of liability known as the “implied false certification theory” and whether this theory was valid under the FCA.  The implied false certification theory treats a payment request as an implied certification of compliance with relevant statutes, regulations or contract requirements that are a material condition of payment and treats a failure to disclose a violation as a misrepresentation that renders the claim false or fraudulent. Continue reading

Physicians: Start Preparing for 2016 Changes in Healthcare

By: Jeff Cohen

Stepping into 2016, physicians and medical practices must continue to be vigilant about the changing landscape in healthcare.  Those who adapt quickly and smartly will thrive, while those who don’t will lose.  What can they do?

Stabilize

Stability for medical practices requires two things:  clear analytics and fixes.  Smart medical practices will examine threats outside the practice and within it.  As far as external threats go, the key area to focus on is competition.  Do you know what competitors are doing and how they’re different than you?

Internal threats are general revealed in the form of (a) employees that need better training and communication, (b) employees that just need to go, and (c) creating a succession plan for the practice.  If the practice is top heavy with older physicians, what plan is in place to ensure that “new blood” is brought in?  What recruitment strategies are in place?  Can the practice go it alone or does it need a recruitment arrangement with a hospital that can demonstrate a community need?  How will the older physicians phase out?  Is there a plan in the corporate documents to make sure phase out is slow and planned?  What do departing physicians get?  What about billing and collection?  When was the last time that was analyzed?  And finally, coding analysis.  Is money being left on the table?  Far too many practices actually undercode visits and services out of fear of payer audit.  Apart from constituting a False Claims Act violation (though regulators are not fast to indict providers who are underpaid), the differential can mean the difference between a good year and a bad one.

Finally, in light of the fact that regulatory and recoupment activity has never been higher, practices would do well to ensure compliance via a self-audit and compliance plan.  This is a different animal than a coding audit.  This one looks at all contractual relationships to ensure compliance and augments coding compliance.  Continue reading

The First False Claims Act Involving the Affordable Care Act (ACA) 60 Day Repayment Rule

By: Valerie Shahriari

While the False Claims Act (FCA) has been in existence for years, many providers do not know that the rule was extended in 2010.  As part of the Affordable Care Act (ACA), Congress created the “60 Day Rule” and extended the False Claims Act liability to health care providers who fail to report and return overpayments within 60 days of identification if that overpayment came from a federal program (i.e., Medicare and Medicaid).  United States ex rel. Kane et al. v. Healthfirst, Inc., et al (Case No. 1:11-cv-02325) (S.D.N.Y. August 3, 2015) is the first case in which the federal government intervened on an alleged violation of the 60 Day Rule. Continue reading

Provider Credit Balances Result in $6.8 Million Overpayment Settlement

bonus calculationBy: Karina Gonzalez

USA v. Pediatric Services of America –  settlement under the False Claims Act involving a health provider’s failure to investigate credit balances on its books to determine whether they resulted from overpayment by a federal health care program.

The U.S. Attorney for the Northern District of Georgia  announced that Pediatric Services of America Healthcare, Pediatric Services of America, Inc., Pediatric Healthcare, Inc., Pediatric Home Nursing Services (collectively, “PSA”), and Portfolio Logic, LLC agreed to pay $6.88 million ($6,882,387) to resolve allegations that PSA, a provider of home nursing services to medically fragile children, knowingly (1) failed to disclose and return overpayments that it received from federal health care programs such as Medicare and Medicaid, (2) submitted claims under the Georgia Pediatric Program for home nursing care without documenting the requisite monthly supervisory visits by a registered nurse, and (3) submitted claims to federal health care programs that overstated the length of time their staff had provided services, which resulted in PSA being overpaid.

“Participants in federal health care programs are required to actively investigate whether they have received overpayments and, if so, promptly return the overpayments,” said United States Attorney, John Horn. “This settlement is the first of its kind and reflects the serious obligations of health care providers to be responsible stewards of public health funds.”Continue reading

OIG Frowns Again on Proposed Company Model Arrangements with Anesthesiologists

anesthIn December, 2012, the OIG reviewed and frowned upon two proposed scenarios, each of which had the effect of shifting to ASC-owner/surgeons a portion of the fees earned from anesthesia services.  The OIG has done it again!

In an era of tremendous stress in the healthcare marketplace, it’s not surprising that some surgeons were willing to push the envelope to capture anesthesia fees they otherwise would not receive.  Traditionally, physician-owned surgery and endoscopy centers contract with anesthesia providers on an exclusive basis and let the anesthesiologists separately bill for anesthesia services.  Anesthesiologists kept whatever was collected for anesthesia services; and surgeons kept whatever was paid for their services.  Plus, if the surgeon was also an owner of the center, the surgeon received a portion of the profits left over from the facility or technical fee.  In the past several years, however, center-owning surgeons are often looking for ways to share anesthesia fees.  The latest OIG Advisory Opinion (13-15) may cause some surgeons to back down or to reevaluate the long-term viability of the so-called “Company Model.” Continue reading

Billing for Associates Fraught with Risk

ACO-Payment-300x225You’ve hired a new doctor to join your practice, but it will take several months to get the new doctor on your insurance plans and to add him or her to your group practice.  What do you do?  Can you bill for the new doctor’s services under your own provider name or number?  Can you hold the billing and submit it at a later date?

Billing for the new doctor’s services under the name or provider number of a physician who did not actually perform the service is fraud.  It’s as simple as that.  And it’s a serious offense, punishable as a criminal offence, regardless of the payer involved.  In other words, it’s not true to say “Well, it’s ok to do with HMOs, but not Medicare.”  It’s fraud for every payer.  And, with federal payers, it’s a federal crime!  So what do you do?

Physicians are very limited with respect to Medicare and Medicaid patients.  The new doctor must be added to the practice’s provider number, especially if the practice provides “designated health services” such as PT, rehab, clinical lab and diagnostic imaging.  Most practices time the hiring of the new doctor with adding him or her to the provider number and also ensuring that the new doctor is contracted with various payers, all of which can take several months.

There may be a little more flexibility with respect to PPOs and HMOs, though this is tricky.  These payers are usually adamant about credentialing the new doctor and about having him or her sign a participating provider agreement before providing services to their insureds.  In some very limited circumstances, a payer may expedite the process and may even suggest a billing arrangement that would otherwise constitute insurance fraud, but physicians still need to be careful with these arrangement.  When a payer suggests such an arrangement, it is absolutely essential that the proposal and agreement be in writing and review to ensure regulatory compliance.  Otherwise, the practice and the doctors involved may be subject to fraud based claims—e.g. violations of the state insurance laws and even the federal False Claims Act.

 

Fraud & Abuse Enforcement Soars Sky High

Investigations and successful prosecutions for violation of laws like the Anti Kickback Statute (“AKS”), the Stark Law and the False Claims Act were dramatically up in 2011 and are expected to climb still higher in 2012. For instance 13 doctors were charged in December, 2011 with violating the AKS by receiving payment for referring patients to an MRI center. Physicians and other healthcare business people MUST have any suspect arrangement closely scrutinized by highly qualified counsel. A “suspect arrangement” is any arrangement between providers of healthcare services that involve, to any degree, the exchange or payment of anything of value, including money. The AKS is a criminal statute; and the risks of enforcement are now huge.
Business and arrangements which are designed at all to lock in physician referrals carry particularly large risks and require close scrutiny. For instance, surgery centers that received referrals from non-owner physicians viewed that as a great thing. Now, referrals from unaffiliated physicians are viewed as inherently suspect. “What,” the regulator thinks, “is driving this referral? What wrongful conduct is being engaged in here?” This is especially so with any marketing arrangement as well.

Physicians and other healthcare business people would do well to recall that if even “one purpose” of the arrangement is to compensate (cash or anything of value) someone for a patient referral, the AKS is triggered. Moreover, where Safe Harbor Act compliance was recommended, many now find it necessary.