Theories of Liability
There are 3 recognized legal theories under which False Claims Act (FCA) liability may be established – the FCA Express Certification, Implied Certification, and Worthless Services theories. As you may know, the FCA is the government’s primary fraud fighting tool, and prohibits the presentation of false claims for payment by the government. It is used most often, but not exclusively, in health care fraud matters. Recently, the FCA was amended to prohibit the holding of identified overpayments as well.
FCA Express Certification
In any regard, the most common theory relied upon by the government and relators in FCA cases is known as “Express Certification.” Specifically, an “expressly” false claim occurs when a provider falsely certifies compliance with a law or contractual term that is a prerequisite to payment. As you know, all health care providers submit claims on the CMS 1500 form, and as part of that form, the provider must certify that the service or supply provided was “medically indicated and necessary to the health of [the] patient.” Therefore, if a provider submits a claim for payment for a service or supply that does not end up being “medically indicated and necessary,” they have falsely certified compliance and have likely violated the FCA. Additionally, this also includes claims when services were not provided as billed, or not provided at all.
FCA express certification is the most obvious type of false claim. For instance, when a provider performs a stent procedure to open up a patient’s blocked artery, but the patient’s occlusion level (the percentage of blockage) was not significant, the procedure was most likely medically unnecessary. But by the provider signing the CMS-1500 (usually electronically), they have formally stated to the government that the service was medically necessary, making the claim false.
Government Intervention in FCA Cases
When a whistleblower or relator alleges a simple “express certification” theory in their complaint, the government may very well take the case if the facts are clearly set out and show on their face that a violation has occurred. It is also more enticing to the government if the dollar amounts at issue are high (greater than a million dollars). Regardless, the government ends up taking (it is formally known as “intervening”) many fewer cases than it receives – only around 25%. Many of the cases in which the government decides not to intervene may likely be legitimate matters, but the resources of the Department of Justice are limited.
In any regard, as Medicare and Medicaid fraud prevention efforts continue to expand, there will likely continue to be a rise in the number of FCA cases filed. This area of the law has become increasingly important as the Justice Department looks to stem the rising tide of fraud and abuse in the nation’s healthcare system, and providers should ensure that their compliance programs are effective to identifying and deterring potential violations of the FCA and other laws.
Robert W. Liles is the managing member of Liles Parker PLLC, located in our Washington D.C. office. Robert was the first National Health Care Fraud Coordinator for the Department of Justice, and has extensive experience in litigation cases under the False Claims Act. He is a talented advocate and has practiced with and before many of the Assistant United States Attorneys (AUSAs) that handle these cases on a daily basis. For more information or for a free 30 minute consultation, call today at 1-800-475-1906.
Hospice Fraud Background
Hospice fraud has been the subject of news report recently in the wake of several hospice fraud cases brought by whistleblowers and the Federal government. Don’t let your hospice make the news!
As all hospice providers know, a Medicare beneficiary is only eligible for the hospice benefit when a physician certifies that if that patient’s terminal condition in its regular course, the patient is not expected to live longer than six months. In addition, there are a number of tests, including the FAST score, that can lend further support to a physician’s terminal diagnosis. In any regard, however, these things must be reasonable and well-documented.
While no one can predict the true course of an individual’s condition – someone could pass away tomorrow with no symptoms or live many years with extraordinary conditions and infirmities – continuous re-certification of an individual with an alleged terminal illness will raise Medicare contractor eyebrows and quickly dissolve a physician’s credibility for making such a determination. This is only exacerbated if a number of patients at a hospice have been receiving hospice benefits significantly longer than six months. Every time an individual comes up for re-certification past the six month window, the hospice and the certifying physician should be sure that they explain exactly why the patient’s diagnosis remains terminal.
Recent Hospice Fraud Cases
Because of the sensitive nature of hospice care – patients are electing to give up curative treatment and instead receive palliative care – and the potential for fraud, government investigators, including the Department of Health and Human Services (HHS) Office of Inspector General (OIG) and the Department of Justice (DOJ), have cracked down on hospice billing lately. A physician and hospice in Pennsylvania, for instance, were recently indicted on charges of violating the Anti-Kickback Statute (AKS). In other locations, from Kansas to California, Texas to Florida, hospice fraud has become a highly investigated practice, where OIG, DOJ, and Medicare contractors are alleging violations of AKS or fraudulent certification of terminal diagnosis.
What Can Hospice Providers Do?
Either way, hospice providers should take note of the recent uptick in enforcement. If you receive a letter from a Medicare contractor, such as a ZPIC, RAC, or MAC, or a request from OIG or DOJ, it is important that you contact a qualified health law attorney about your rights and obligations. Whether you end up in the Medicare appeals process or in discussions with OIG or DOJ, you should retain counsel who is experienced and knows the people and the procedure for these types of matters.
Robert Liles represents clients nationwide in Medicare overpayment appeals and other actions taken by RACs and ZPICs, including suspensions and prepayment review. In addition, he counsels clients regarding OIG and CMS self-disclosure protocols, and works with clients and the government in negotiating settlements of administrative claims. Moreover, he assists doctors, hospitals, hospices, home health agencies, and other providers in implementing effective compliance plans. For a free consultation, call Robert today at 1-800-475-1906.
Largest Health Care Fraud Bust in History
Update (May 3): In total, 107 individuals were charged yesterday in connection with a health care fraud scheme comprising $452 million in false billing. 91 of the accused have been arrested and are in custody.
News outlets are reporting that approximately 100 people have been arrested and charged with one or more health care fraud schemes involving false billings to Medicare, Medicaid, and other federal health care programs. These health care fraud schemes allegedly resulted in approximately $450 million in fraudulent billings, one of, if not the largest, such busts in the history of federal health care programs. The report goes on to state that arrests were made in seven major metropolitan areas as a result of an investigation over several months into these issues. CBS is reporting that over 50 of the individuals arrested were in Miami, Florida. Other arrests were made in Los Angeles, Houston, Detroit, Chicago, Tampa Bay, and Baton Rouge. In Baton Rouge, authorities are saying that these arrests were not just the result of several months of investigation, but a capped a six year long process to uncover fraudulent activities. Many of those arrested were allegedly involved in schemes related to the provision of mental health services or home health services.
Law Abiding Providers Should Take Note
Health care providers in the cities where these health care fraud busts occurred should be wary. While HHS-OIG and DOJ have allegedly rooted out criminals from the Medicare program, these events cast a bad light on all providers in these regions. It has been our observation that after a large health care fraud bust such as this, the Zone Program Integrity Contractor (ZPIC) or Recovery Audit Contractor (RAC) for each region enhances their auditing efforts of similar providers. The ZPICs in these regions include SafeGuard Services (Los Angeles, Miami and Tampa), AdvanceMed Corporation (Baton Rouge) and Health Integrity (Houston). All of the ZPICs are capable, aggressive, and will critically audit a provider’s claims for both technical deficiencies and lack of medical necessity issues.
Despite the federal government taking health care fraud wrongdoers off of the streets, ZPICs and RACs will likely step up enforcement efforts for other providers. It is therefore imperative that you establish and follow an effective compliance plan in your practice or facility as soon as possible. You should conduct a gap analysis to review your documentation practices, business operations, and relationships with referral sources, suppliers, and other providers. These issues are too important at this point to ignore. Moreover, if you have received a letter from a ZPIC or RAC, it is not something to fool around with or ignore. These entities will often review a sample of claims, deny many or all of those claims, and then extrapolate those findings onto a one or two year universe. This results in alleged overpayments to providers, sometimes in the millions of dollars. If you have received one of these letters, call us today to learn more about the process and your rights and responsibilities.
Liles Parker is a full-service law firm with offices in Washington, DC, Baton Rouge, Houston, and San Antonio. We provide nationwide representation of health care providers in a variety of administrative and other matters, including administrative appeals of ZPIC, RAC, MAC, MIC and Medicaid RAC overpayment determinations. In addition, we provide compliance plan drafting and implementation, compliance training for office staff, and mock audits. For more information, call us today at 1-800-475-1906 for a free consultation.
South Texas Health Care Providers Remain Under Considerable Scrutiny by HEAT Prosecutors and Investigators
(January 6, 2011): Three Houston-area residents, one of whom is a physician, were sentenced to prison on January 4th for their roles in a multi-million dollar durable medical equipment (DME) Medicare fraud scheme. Each of the three defendants were also ordered to pay restitution to the Federal government, in amounts ranging from $29,052 to $1.4 million.
According to DOJ, a Houston-area DME company improperly billed Medicare for power wheelchairs and orthotic devices, beginning in 2003 and continuing until late 2009. In addition to the three co-conspirators sentenced today, a total of eight other individuals were convicted for their participation in the fraudulent scheme. One of the eight included the owner of the DME company.
At trial, Federal prosecutors were able to show that a variety of fraudulent actions had been taken by members of the group, ranging from the payment of illegal kickbacks to the prescription of medically unnecessary devices.
Notably, this was just the latest case investigated by members of the DOJ / HHS-OIG / MFCU Health Care Fraud Prevention and Enforcement Action Team (HEAT). This strike force is responsible for investigating and prosecuting cases throughout South Texas. As DOJ noted:
“Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 850 individuals who collectively have falsely billed the Medicare program for more than $2.1 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”
Both Federal and State investigators are aggressively targeting non-compliant providers. South Texas providers who take the time to review and update their current Compliance Plan should also conduct a gap analysis to better ensure that their operational and billing practices fully comply with applicable statutory and regulatory requirements.
Liles Parker attorneys have extensive experience representing health care providers in alleged Medicare overpayment and fraud cases. Should you have questions about our services, give us a call for a free consultation. We can be reached at 1 (800) 475-1906.
(October 17, 2010): The FBI has announced the arrest of 73 defendants, a number of which are allegedly members of an international organized crime organization, as part of one of the largest criminal health care fraud cases ever brought. It is estimated that these individuals are responsible for the illegal submission of over $163 million in fraudulent Medicare claims. As the FBI’s Press Release reflects:
“. . .the defendants allegedly stole the identities of doctors and thousands of Medicare beneficiaries and operated at least 118 different phony clinics in 25 states for the purposes of submitting Medicare reimbursements.
As the FBI noted, the schemes employed by this group included the submission of fraudulent claims for medically unnecessary treatments and services to the Medicare program for payment by these “phantom clinics.” Indictments covering these defendants were issued in five states, California, Georgia, New Mexico, New York, and Ohio. Commenting on the multi-agency cooperation involved, the Press Release notes that:
“Today’s arrests are an example of the FBI’s ability to conduct cross-program, multi-divisional investigations targeting a national level threat. In recent years, the department has undertaken a series of steps to modernize its organized crime program and enable federal law enforcement to take a unified approach to combating international organized crime. The Attorney General’s Organized Crime Council brings together the leadership of the FBI and eight other federal law enforcement agencies or offices with the department’s prosecutors, focusing high-level attention on these issues. The IOC-2 provides support in the form of information and intelligence to the member agencies that enhance efforts to identify, penetrate and dismantle the most dangerous organized crime groups through investigations and prosecutions. The creation of the International Organized Crime Targeting Committee and the Top International Criminal Organizations Target (TICOT) List, directs investigators and prosecutors to concentrate their limited resources on those international organized crime groups that pose the greatest threat to the United States. The department’s Criminal Division, through the Health Care Fraud Unit, Organized Crime and Racketeering Section, and the Asset Forfeiture and Money Laundering Section, has created new training programs to educate investigators and prosecutors on the intricacies of international organized crime and financial investigations.” (emphasis added).
Commentary: As this case reflects, the ease and extraordinary profits which can be generated from health care fraud is more than enough incentive for international organized crime syndicates to move into this area. With the uncovering of this scheme, we should fully expect that DOJ, HHS-OIG and other law enforcement agencies will continue to investigate these relationships.
Liles Parker attorneys represent health care providers around the country in administrative, civil and criminal health law related matters and cases. Please call us at 1 (800) 475-1906 for a free consultation.
She allegedly admitted falsifying and forging encounter forms used when providing care for Medicare beneficiaries. More specifically, the nurse reportedly falsified information such as:
“. . .areas dealing with the beneficiary’s blood pressure, pulse rate, temperature, cardiac and respiratory status, homebound status and the medical supplies purportedly used during the visit.”
As the government’s release further notes, the nurse also allegedly admitted to forging beneficiary signatures on the bottom of the forms. Sentencing is scheduled for next January. She reportedly faces up to five years in Federal prison and a criminal fine of up to $250,000.
Commentary: While few facts regarding how this conduct was uncovered have been disclosed by the government, Home Health companies in the Valley should take note of the fact that Medicare providers in South Texas (especially Home Health companies, DME suppliers and Hospices) remain under considerable scrutiny by ZPICs, HHS-OIG, the State MFCU, the FBI and DOJ.
Under Health Care Reform’s mandatory compliance provisions, an effective Compliance Plan will soon be required of all providers. While many Home Health companies already have Compliance Plans in place, the question to be asked is simple: Would instances of improper billing, such as those outlined above, be disclosed as part of your normal Compliance Plan audit and review process? If not, you have a problem.
We recommend that you review your current compliance policies and procedures to better ensure that problems can readily be identified and fixed. Having said that, take care when engaging consultants to review your agency or practice. To the extent that serious problems are identified, the information learned may not be privileged. As a result, should the government investigate your company, you may be forced to disclose negative reports and other findings that your consultants have issued — essentially turning these internal audit documents into a “roadmap” for the prosecution. A better course is for you to work through your attorney. Have your attorney directly engage the consultant and supervise the review. That way, the report will be issued to your legal counsel. You may then at least arguably assert that any reports are privileged.
Liles Parker attorneys represent Home Health companies and other Medicare providers in South Texas. Our staff has extensive experience responding to ZPIC audits and other health care fraud investigations. Call us at 1 (800) 475-1906 for a free consultation.
(August 27, 2010): Yesterday, Attorney General Eric Holder and U. S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius conducted the second of a planned series of “Regional Health Care Fraud Prevention Summits.”
In addition to these agency heads, participants learned of current and additional planned initiatives from a number of Federal and State law enforcement officials. The first summit was recently conducted in Miami, Florida. This summit was held in Los Angeles, California.
Describing the progress made in the last fiscal year, Attorney General Holder noted that:
“In just the last fiscal year, we’ve won or negotiated more than $1.6 billion in judgments and settlements, returned more than $2.5 billion to the Medicare Trust Fund, opened thousands of new criminal and civil health care fraud investigations, reached an all-time high in the number of health care fraud defendants charged, and stopped numerous large-scale fraud schemes in their tracks.”
Notably, Attorney General Holder also made it clear that the government’s joint Health Care Fraud Prevention and Enforcement Action Team (HEAT) program is slated for further expansion over the next year. As he noted:
“HEAT’s impact has been recognized by President Obama, whose FY 2011 budget request includes an additional $60 million to expand our network of Strike Forces to additional cities. With these new resources, and our continued commitment to collaboration, I have no doubt we’ll be able to extend HEAT’s record of achievement. And this record is extraordinary. (emphasis added).
These funds will be to supplement, not supplant, existing health care fraud enforcement efforts currently underway. While the additional cities slated for HEAT expansion were not announced at this event, all health care providers, regardless of location, should be especially vigilant in their efforts to ensure that Medicare coding and billing practices regulating the items and services they are providing must comply with applicable statutory and agency requirements.
Should you have questions regarding a health care fraud issue, you may call Robert W. Liles or another of our attorneys. Call 1 (800) 475-1906 for a free consultation.
Medicare Fraud Strike Force Operation Leads to Charges against 94 Defendants, including 4 in South Texas
(July 17, 2010): Yesterday, the Department of Justice (DOJ) announced charges against 94 physicians, medical assistants, and health care company owners and executives in connection with alleged false Medicare claims amounting to more than $251 million. 24 defendants from Miami account for approximately $103 million of that amount. Four defendants were charged in Houston for their alleged roles in a $3 million scheme to submit fraudulent claims for durable medical equipment (DME). Other arrests were made in Baton Rouge, Brooklyn, and Detroit.
The offenses charged include conspiracy to defraud the Medicare program, criminal false claims, violations of the anti-kickback statutes, and money laundering. The charges are based on a variety of fraud schemes, including physical therapy and occupational therapy schemes, home health care schemes, HIV infusion fraud schemes and durable medical equipment (DME) schemes.
Announcing the arrests, Attorney General Eric Holder said, “With today’s arrests, we’re putting would-be criminals on notice: Health care fraud is no longer a safe bet. It’s no longer easy money. If you choose to engage in health care fraud, you will be found; you will be stopped; and you will be brought to justice.”
The operation was conducted by the joint DOJ-HHS Medicare Fraud Strike Force, multi-agency teams of federal, state, and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing. Strike Force teams are operating in seven cities in the United States: the five aforementioned cities, Los Angeles, and Tampa. AG Holder noted that the ongoing Strike Force initiative in South Florida has resulted in the indictments of 810 organizations and individuals since March 2007 and uncovered $1.85 billion in improperly billed claims.
The Strike Forces are a part of Health Care Fraud Prevention and Enforcement Action Team (HEAT), which is made up of top level law enforcement and professional staff from the DOJ and HHS and their operating divisions. HEAT is dedicated to joint efforts across government to both prevent fraud and enforce current anti-fraud laws around the country.
Should you have any questions regarding these issues, don’t hesitate to contact us. For a complementary consultation, you may call Robert W. Liles or one of our other attorneys at: 1 (800) 475-1906.
HEAT Strike Force in Texas
The Federal government is taking considerable steps to stop Medicare fraud and abuse. Notably, the number of publicly-disclosed HEAT Strike Force investigations and prosecutions in Texas significantly increased last month. Two of the cases disclosed involved mental health professionals:
- A Psychologist was convicted of health care fraud and money laundering, in connection with various claims fraudulently billed to Medicare. Instances of improper conduct included billing for more than twenty-four hours of services in a single day; billing for services in a single day which amounted to more than double the normal business hours of the Psychologist’s practice; billing for services allegedly rendered during weekends, holidays, and times that the Psychologist was known to be out of town and away from the practice; and, submitting claims for services and evaluations not actually performed by the Psychologist, as required by law.
- An unlicensed Behavioral Health Counselor was charged with Medicaid fraud for allegedly engaging in aggravated identity theft. The defendant allegedly improperly acquired Medicaid beneficiaries’ information, including names, addresses and Medicaid numbers, then used the information to file false claims through a behavioral counseling service the defendant owned. These behavioral counseling services were billed to Medicaid but allegedly not provided to the beneficiaries for which they were billed.
Since being established approximately a year ago, Texas’ HEAT Strike Force has significantly increased both investigations and prosecutions throughout the State. Both enforcement efforts and the frequency of Medicare audits are anticipated to increase throughout 2010 and following years. In addition to the increasing number of civil and criminal cases brought by the Texas HEAT Strike Force, the number of administrative overpayment cases is anticipated to grow as well. It is essential that Texas providers continue their efforts to ensure that both business operations and billing practices fully comply with applicable statutory and regulatory requirements.
Our Firm includes a number of attorneys with extensive former experience as Federal and / or State prosecutors. Should your organization find itself under investigation, call us today for a complimentary consultation at: 1 (800) 475-1906.