What Does “Direct Supervision” Mean in Non-Hospital Diagnostic Testing Facilities?

The Centers for Medicare and Medicaid Services, commonly known as CMS, requires physician supervision of certain services as a condition for reimbursement. The required supervision level depends on the type of service performed, the setting where the service is performed and the physical location of where the service is performed. Adhering to the proper protocol is critical, as services furnished without the required level of physician supervision are not reimbursable by Medicare and may potentially have even more significant consequences, including civil and criminal penalties.

Types of Physician Supervision

Generally, there are three levels of supervision for diagnostic testing in non-hospital facilities:

  • General supervision, which means the procedure is furnished under the supervising physician’s overall direction and control, but the physician’s physical presence is not required during the procedure’s performance.
  • Direct supervision, which means the supervising physician must be present and immediately available to furnish assistance and direction throughout the procedure’s performance. It does not mean the physician must be physically present in the room when the procedure is performed.
  • Personal supervision, which means the physician must be physically present in the room during the procedure’s performance.  

Direct Supervision in Hospital Settings v. Non-Hospital Settings

CMS regulations tell us that the required direct supervision for diagnostic tests performed directly or under arrangement with a hospital or in an on-campus or off-campus outpatient department of the hospital (i.e., hospital settings) differs from the required direct supervision for diagnostic tests performed in a free-standing facility, physician’s office or independent diagnostic testing facility (i.e., non-hospital settings).

For diagnostic tests performed in hospital settings, direct supervision does not require the supervising physician to be present within any physical boundary as long as he or she is immediately available.

In contrast, when services are provided in non-hospital settings or under arrangement with hospitals in non-hospital settings, direct supervision requires the supervising physician to remain present in the “office suite” where the service is being performed and be immediately available to give assistance and direction throughout the performance of the procedure.

What Does Office Suite Mean in Non-Hospital Settings?

While we know that supervising physicians are not physically bound in hospital settings and that they are physically bound in non-hospital settings, a question arises: what are the physical boundaries supervising physicians must comply with in non-hospital settings?

Does office suite mean one space, as identified in a lease, containing a collection of smaller offices or rooms? Does it allow for one primary office suite with sub-suites within? What if two separate office suites have a connecting door in between them?

No CMS regulation, Medicare Benefit Policy Manual provision or any other authority defines “office suite,” nor is there any directive case law or advisement interpreting the meaning of “office suite.” In addition, there is a lack of guidance regarding interest in enforcing the relevant CMS regulations and consequences for failing to comply with the relevant CMS regulations.

Consequences of Failing to Comply with the Required Physician Supervision Requirements

Nevertheless, knowing your options and risks are critical. Should CMS find physician supervision practices noncompliant with CMS regulations, billing entities and supervising physicians may be subject to claims’ denials, be required to reimburse CMS, be subject to whistleblower lawsuits and medical malpractice lawsuits, and potentially face civil and criminal penalties.

DME Scheme of Greed Knows No Bounds

Durable Medical EquipmentBy: Susan St. John

In yet another take-down of an illicit scheme to defraud the Medicare Program and ChampVA, as well as other insurers, Patsy Truglia has been sentenced to 15 years in federal prison. He has also had assets forfeited since these assets were acquired with money from his ill-gotten fraud scheme. In total, Mr. Truglia and his co-conspirators collected approximately $18.5 million from Medicare, ChampVA, and insurance using a scheme of telemarketing, telemedicine, and multiple DME providers or “store fronts.”

The scheme used telemarketers to collect beneficiaries personal and medical information to create orders for DME products such as knee, back, and wrist braces. These orders were then provided to telemedicine practitioners for signature – often without a valid telehealth communication. In essence, there was no attempt at having a practitioner exercise independent judgment as to the medical necessity of these DME products. Instead, these practitioners were paid for their signatures on the pre-filled order forms as part of the “scheme of greed.” From January 2018 to 2019, this scheme of greed resulted in approximately $12 million in payment to Truglia and his co-conspirators.Continue reading

Genetic Testing: Be Hopeful but Wary

Genetic tests are valuable because they can provide important information to patients and their medical providers regarding diagnoses, treatment, and disease prevention. However, the rapid growth in the number of tests ordered, especially in light of the telemedicine expansion during the pandemic, has invited well-earned scrutiny to the industry.

Make no mistake: genetic testing is heavily regulated (and enforced). The Federal Anti-Kickback Statute, Eliminating Kickbacks in Recovery Act, and Commercial Insurance Fraud Law have all been used to prosecute unscrupulous marketers, call centers, and telemedicine providers in the last few months. Kickbacks in exchange for genetic specimens are just as illegal as kickbacks for patients. Three months ago, a Florida man was sentenced to 10 years in prison for conspiracy to commit health care fraud. His actions resulted in the submission of approximately $3.3 million in fraudulent claims to Medicare for genetic testing.Continue reading

Federal Agencies Scrutinizing Home Healthcare Fraud & Kickbacks

home healthcare, HHS, heathcare

home healthcare, HHS, heathcare
checking mans blood pressure

By Karina P. Gonzalez

Federal agencies are continuing to target home healthcare industry fraud in “hot zone areas.”

Recently, the U.S. Department of Health and Human Services Office of Inspector General (HHS) released its report. It identified Florida, Texas and select areas in Southern California and the Midwest as areas where home healthcare fraud is more likely to occur. It is obvious that the watch dog agencies will continue to monitor home healthcare spending in these hot zones.

HHS found that a home health agency incorrectly billed Medicare and did not comply with Medicare Billing requirements for beneficiaries that were not homebound and for others that did not require skilled services at all.

In August and September 2018, physicians and the owner of a home health agency were each sentenced on multiple counts of conspiracy and healthcare fraud and ordered to pay $6.5 million in restitution. One physician was sentenced to 132 months in prison following trial. A physician who pled guilty was sentenced to 27 months in prison following a guilty plea. The home health agency owner was sentenced to 42 months in prison.   The defendants paid and received kickbacks in exchange for patients and billed Medicare more than $8.9 million for services that were medically unnecessary, never provided, and/or not otherwise reimbursable. Additionally, certain defendants provided prescriptions for opioid medications to induce patient participation in the scheme.

In September 2018, the co-owner and administrator of a home health agency was sentenced to 24 months in prison, ordered to pay over $2.2 million in restitution, and ordered to forfeit over $1.1 million. The co-owners participated in a home healthcare fraud conspiracy that resulted in Medicare paying at least $2.2 million on false and fraudulent claims. The owners and their co-conspirators paid kickbacks to doctors and patient recruiters in exchange for patient referrals, billed Medicare for services that were medically unnecessary, and caused patient files to be falsified to justify the fraudulent billing.

Back in February 2018, the owner of more than twenty home health agencies was sentenced to 240 months in prison and ordered to pay $66.4 million in restitution, jointly and severally with his co-defendants, after pleading guilty to one count of conspiracy to commit health care fraud and wire fraud. A patient recruiter for the home health agencies, who also owned a medical clinic and two home health agencies of her own, was sentenced to 180 months in prison. Another patient recruiter, who also was the owner of two home health agencies, was sentenced to 115 months in prison. These conspirators paid illegal bribes and kickbacks to patient recruiters in return for the referral of Medicare beneficiaries many of whom did not need or qualify for home health services.  Medicare paid approximately $66 million on those claims.

Illegal kickbacks in exchange for referrals of Medicare beneficiaries, lack of medical necessity for home health services, failing to meet the guidelines, fraudulent billing, billing for services beneficiaries did not receive and fraudulent documentation continues to plague the home healthcare industry.

 

Operation Double Helix – Unprecedented Genetic Testing Fraud

By: Karina P. Gonzalez 

According to the Department of Justice (DOJ) genetic testing is the next frontier for healthcare fraud.

In a fraudulent operation that the Department of Justice calls, “unprecedented”, elderly or disabled patients nationwide were lured into providing their DNA for testing in a widespread genetic testing fraud scheme powered by a large telemarketing network. The doctors involved were paid to write orders prescribing the testing without any patient interaction or with only a brief telephone conversation.Continue reading

DME Fraud Enforcement: Telemarketing & Telemedicine

By: Michael Silverman

The indictments and regulatory activities that took place on April 9th were just the tip of the iceberg when it comes to the crackdown on DME fraud, telemarketing and telemedicine operations.

In the weeks and months that have followed ‘Operation Brace Yourself’, healthcare providers (such as DME suppliers and telehealth physicians) and telemarketers allegedly involved in these activities have been subjected to a wide range of penalties from suspension of Medicare billing privileges to civil penalties and/or criminal charges. Here are some of the more serious recent DME, telemarketing and telemedicine related civil and criminal regulatory enforcement actions:Continue reading

Latest Developments: Medicare Appeal Backlog Litigation

cms medicare regulations

medicare appealBy: Matt Fischer

In 2012, the American Hospital Association (AHA) along with three member hospitals filed a lawsuit against the U.S. Department of Health and Human Services (HHS) for the agency’s failure to meet the 90 day decision requirement at the Administrative Law Judge (ALJ) level known as the Office of Medicare Hearings and Appeals (OMHA).  Through the years, the case has moved back and forth between a federal district court and federal appeals court in the District of Columbia.  Most recently in March, a federal district court judge ordered the AHA to expand on its suggestions it has made over the course of its litigation for how HHS can clear the ever-growing backlog and additionally, explain why the current procedures are insufficient.Continue reading

Cutting Patients a Break: Your Financial Hardship Policy

financial hardshipBy David Hirshfeld

with Jean Acevedo, Guest Contributor

As premiums and deductibles rise and coverage shrinks, more and more patients have difficulty paying for their health care.  You can provide financial relief to your patients if you wish, but you should only do so in accordance with a uniform hardship policy.

As a general rule, the practice should not routinely waive co-pays or deductibles, or offer discounts based on a patient’s statement that the patient is suffering from financial hardship.  If the practice does routinely offer discounts or waivers of deductibles without properly investigating a patient’s financial wherewithal, the practice runs the risk of violating its payor contracts, being accused of committing insurance fraud, and/or paying an illegal kickback to induce patients to come to the practice.  Some payor contracts require the practice to bill the payor the lowest rate that the practice bills any of its patients, a so-called “most favored nation provision.”  Typical Medicare participation agreements are subject to this type of provision.  If the practice waives deductibles or co-pays, then insurers often take the position that the amount being billed by the practice to the insurer ought to be reduced by the amount waived.  In addition, a regulator could conceivably accuse the practice of waiving co-pays and deductibles as a means of inducing patients to seek treatment from the practice in violation of anti-kickback laws.Continue reading

The Cost of Inaccurate Medical Records

medicare backlog

0607-for-the-record-1690On July 8, 2013 the United States Attorney’s Office for the Southern District of Florida issued a Press Release with the headline “Supervisor of $63 Million Health Care Fraud Scheme Sentenced in Florida To 10 Years in Prison”. The Defendant, a 51 year old employee of the Healthcare Provider was the director of medical records. The employee was a certified medical records technician and was found to have overseen the alteration, fabrication and forgery of documents that were used to support claims submitted to Medicare and Medicaid. In addition, the employee was found to have directed therapists to fabricate documents and forged signatures on documents. The defective medical records were used to support claims to Medicare and Medicaid in excess of 63 million dollars.Continue reading