Texas Physician Indicted and Arrested

(July 9, 2010):  On June 14, 2010 the U.S. Attorney’s Office for the Western District of Texas announced that a Federal Grand Jury had returned a 99-count indictment against a pain management physician who operated clinics in San Antonio and El Paso.  The physician was charged with 21 counts of health care fraud, 20 counts of false statements relating to health care fraud matters, 21 counts of mail fraud, 16 counts of wire fraud, 4 counts of unlawful distribution of a controlled substances and 16 counts of money laundering.  The indictment alleges that the physician “caused to be submitted claims for reimbursement of peripheral nerve injections, facet injection procedures and Level Four office visits–typically involving 25 minutes of face-to-face time between patient and physician–which never were performed.”  Instead, the U.S. Attorney’s Office alleges that the physician performed “prolotherapy” on his patients — a procedure that Federal health care benefit programs do not reimburse.

Notably, an indictment is merely a charge and is not considered to be evidence of guilt.  In issuing this indictment, the Texas HEAT task force, comprised of Federal prosecutors and investigative agencies,  have continued to ramp up efforts to investigate and prosecute allegations of health care fraud.  Notably, the use of “prolotherapy,” a relatively new therapeutic approach, has been supported by some of the best known clinics and physicians in the country.

While this case has yet to fully develop, it again points out that health care providers must take care when utilizing new approaches, despite the fact the therapeutic technique may be considered to be state-of-the-art.  Unfortunately, Medicare may take years to recognize and cover some techniques.  In the mean time, it is essential that providers take care when coding and billing for procedures that may not clearly qualify for coverage under applicable Medicare and / or contractor guidance.

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.

ACA Creates a Minefield for Medicare Providers Who Fail to Promptly Return Overpayments

(July 9, 2010): Does the failure to promptly return a Medicare overpayment really warrant liability under the False Claims Act (FCA)?  Congress thinks so.  The Patient Protection and Affordable Care Act (also known as the “Affordable Care Act” or “ACA”) creates an obligation under the FCA whereby a Medicare provider who fails to timely report and refund an overpayment may be subject to substantial penalties and damages.

Section 6402 of the ACA requires Medicare providers, including physicians and partial hospitalization providers, among others, to a) return and report any overpayment, and b) explain, in writing, the reason for the overpayment.

This law creates a minefield for physicians and other Medicare providers.  First, providers have only 60 days to comply with the reporting and refund requirement from the date on which the overpayment was identified or, if applicable, the date any corresponding cost report is due, whichever is later.  Of course, the ACA does not actually explain what it means to “identify” an overpayment.

Nonetheless, the ACA makes this reporting and repayment requirement an “obligation” under the FCA.  Pursuant to the Fraud Enforcement and Recovery Act of 2009 (FERA) amendments to the FCA, an individual or entity may be liable if he or it “knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government.”  Thus, providers who fail to meet their 60 day “obligation” may be subject to monetary penalties of up to $11,000 per claim, and treble damages.

Several Liles Parker attorneys have worked former Federal and / or State prosecutors.  Our attorneys have extensive experience working on False Claims Act cases.  Should you have any questions, 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.

President Obama Publicizes Measures to Fight Health Care Fraud. . . Again. . .

(June 8, 2010):  For those of you who missed the first two dozen pronouncements (okay, perhaps a little exaggerated, but still . . . we got the message when Congress made it a False Claims Act violation to hold onto a mere overpayment for more than 60 days), President Barack Obama has again expressed his concern about health care fraud in a national Town Hall video teleconference with Senior Citizens across the country.  He took this opportunity to further publicize his “national campaign to combat fraud and misinformation” regarding the Medicare program and the Affordable Care Act.

As President Obama reiterated, the current Administration is committed to fighting health care fraud.  To that end, the following steps have been taken:

The President has directed HHS to cut the improper payment rate, which tracks fraud, waste and abuse in the Medicare Fee for Services program, in half by 2012.

 The Administration has helped support a renewed partnership between the Federal government and state Attorneys General. Secretary Kathleen Sebelius and Attorney General Eric Holder today sent a letter to state Attorneys General urging them to vigorously prosecute criminals who seek to steal from seniors and taxpayers and pledged the support of federal officials for state efforts.

 A nationwide series of anti-fraud summits hosted by the Departments of Justice and Health and Human Services will bring federal, state and local officials together with representatives from the private sector to discuss tactics to fight fraud. The first summit will be held in Miami with additional summits in Los Angeles, Las Vegas, Detroit, Boston, New York, and Philadelphia.

 A redoubling of efforts by U.S. Attorneys nationwide to coordinate with state and local law enforcement to prevent and prosecute fraud. Today, Attorney General Holder called on U.S. Attorneys to hold regular forums with local officials to discuss how to better crack down on criminals who commit fraud.

 Notably, the current administration’s focus on health care fraud enforcement is reminiscent of the major initiatives rolled out during the President Clinton’s terms in office.  As you may recall, Attorney General Reno named “Health Care Fraud” as the Department of Justice’s “#1” white collar priority.  While many voters tend to associate Republicans with “pro-law enforcement” and “anti-fraud” measures, the Democrats have clearly led in the area of health care fraud enforcement.

 In any event, the message is quite clear – the current administration has been, and will continue to be, extremely aggressive in its efforts to identify and prosecute instances of health care fraud.  Unfortunately, with recent changes to the False Claims Act and the Federal Anti-Kickback Statute, incidents that might have otherwise qualified as a mere overpayment may be viewed quite differently today by Federal prosecutors.  Health care providers should diligently work to ensure that their operations, coding and billing activities fully comply with statutory and regulatory requirements.

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 Update: Prosecutions in Texas Increased in March 2010

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.

Are ZPICs Tougher than RACs When Conducting Medicare Audits?

Medicare Audits: RACs vs. ZPICs

The Recovery Audit Contractor (RAC) program is an integral part of the Centers for Medicare & Medicaid Services’ (CMS’) “benefit integrity” efforts which seek to identify and recoup alleged overpayments paid to Medicare providers. While the RAC program is still being expanded in many parts of the country (to cover not only hospitals but also other providers and types of Medicare claims), health care providers should be aware that the Zone Program Integrity Contractors (ZPICs) are already active in many areas and are actively conducting Medicare audits of physicians, home health agencies, hospices, DME companies, therapy clinics, chiropractors and other small to mid-sized health care providers.  Despite the “hype” surrounding RACs, at this time, ZPICs represent a significantly greater risk to non-hospital providers than do RACs.  The purpose of this article to examine a number of the differences between these Medicare audit contractor programs.

What are the chances of your practice being reported by a ZPIC or RAC to HHS-OIG or DOJ for possible fraud violations?

While both Medicare audit contractor programs are designed to “find and prevent waste, fraud and abuse in Medicare,” the fact is that to date, ZPICs have been much more likely than RACs to report possible incidents of “fraud” that are identified while conducting Medicare audits.  Frankly, it makes sense.  RACs make money by identifying alleged overpayments – not by making a fraud referral to law enforcement.  Notably, as a result of recent criticism by HHS-OIG, CMS will be requiring RACs to be much more diligent in the future about making referrals to law enforcement when it appears that a health care provider’s conduct represents fraud rather than a mere overpayment.  CMS has provided training to RACs on how to identify fraud in the near future.  Importantly, a RAC denial of claims which results in a provider repayment will not necessarily prevent HHS-OIG from investigating and making a referral to DOJ for possible prosecution, as appropriate, if there are allegations of fraud or abuse arising out of the alleged overpayment.

Notably, recent letters by ZPICs conducting Medicare audits in South Texas and in other parts of the country have been seeking copies of business related records (copies of contracts, agreements with Medical Directors, lease agreements and more), along with its request for claims-related medical documentation.  Importantly, the contractor is assessing the provider’s business relationships to help verify that referral and other business relationships do not violate the Federal Anti-Kickback Statute or Stark Law.  To reduce the possiblity of civil or criminal liability, it is essential that Medicare providers take affirmative steps to better ensure that their practices are compliant with applicable statutory and regulatory requirements.  2011 will be the “Year of Compliance.”  All providers, regardless of size, should take steps to implement an effective Compliance Program.  Should you not have an compliance program in place, give us a call — we can help.

What is different about ZPICs and their predecessors, Program Safeguard Contractors (PSCs)?

Both ZPICs and Program Safeguard Contractors (PSCs) readily point out that they are not “bounty hunters” in the Medicare audit process.   ZPICs are not paid contingency fees like RACs and are paid directly by CMS on a contractual basis.  Nevertheless, common sense tells us that if ZPICs aren’t successful at identifying alleged overpayments through Medicare audits, the chances of a particular contractor getting their contract with CMS renewed are pretty slim.  Experience has shown that both ZPICs and PSCs don’t always appear to strictly adhere to medical review standards established by Medicare Administrative Contractors (MACs) and approved by CMS.  In our opinion, there appear to have been cases where these contractors applied their own unwritten standards, often denying claims based on conjecture and speculation rather than a strict application of the applicable LCD or LMRP.

In any event, over the last year, both ZPICs and PSCs have increasingly placed health care providers on pre-payment review, conducting post-payment Medicare audits, and  recommending suspensions of payment.  Additionally, in many cases they have been extrapolating the alleged damages based on a sample of claims reviewed. Finally, as discussed above, identified instances of potential fraud are being referred by ZPICs and PSCs to HHS-OIG for possible investigation, referral for prosecution and / or administrative sanction.

What sources of coding / billing data are used by ZPICs during Medicare audits?

ZPICS are required to use a variety of techniques, both proactive and reactive, to address any potentially fraudulent practices.  Proactive techniques will include the ZPIC IT Systems that will combine claims data (fiscal intermediary, regional home health intermediary, carrier, and durable medical equipment regional carrier data) and other source of information to create a platform for conducting complex data analyses. By combining data from various sources, ZPICs have been able to assemble a fairly comprehensive picture of a beneficiary’s claim history regardless of where the claim was processed. The primary source of this data is reportedly CMS’ National Claims History (NCH) database.

How do ZPICs conduct medical reviews?

During their Medicare audits, ZPICs conduct medical reviews of charts to determine, among other things, whether the service submitted was actually provided, and whether the service was medically reasonably and necessary.  Based upon their findings, ZPICs may approve, downcode or deny a claim.  To date, we have never seen a ZPIC conclude that a claim should have been coded at a higher level, only a lower level.  Regrettably, ZPICs are not required to have a physician review a claim in order to deny coverage.  In most of the cases on which we have worked, the contractor’s medical reviewer has been a Registered Nurse.   While some Federal courts have found that a treating physician’s opinion should be given paramount weight, others have ruled that the opinion of a treating physician should not be given any special consideration.  Generally, ZPICs have completely disregarded the “Treating Physician Rule,” despite the fact that a patient’s treating physician was the only provider to have actually seen and assessed the patient at issue.

How should you respond to a ZPIC Medicare audit?

In responding to a ZPIC audit, it is important to remember that although they may not technically be “bounty hunters,” in our opinion, they are in the business of finding fault.   Moreover, they are quite adept at identifying “technical” errors, many of which they will readily cite when denying your Medicare claims.  Unfortunately, it is not at all uncommon for a ZPIC to find that 75% — 100 % of the sample of claims reviewed did not qualify for coverage and payment by Medicare.  After extrapolating the damages to the universe of claims at issue, health care providers often find that they are facing alleged overpayments of between $150,000 and several million dollars.  In many cases, the assessment is far in excess of the provider’s ability to pay.  As such, the administrative appeal becomes a “bet the farm” matter for the health care provider.  If the assessment remains, the provider will have no choice but to declare bankruptcy.

It is also important to remember that ZPIC enforcement actions are not limited to merely overpayment assessments.  In recent months, ZPICs have been increasingly conducting unexpected site visits of health care provider’s offices and facilities, often requesting immediate access to a limited number of claims and the medical records supporing the services billed to Medicare.  Typically, they then require that a provider send supporting documention covering a wider list of claims within 30 days of their visit.  In other cases, should a ZPIC identify serious problems when reviewing the medical records requested, they may recommend to CMS that the provider’s Medicare billing privileges be suspended.  From a practical standapoint, few providers are diversified (in terms of payor mix) to the point that they can easily do without Medicare reimbursement.  The practical effect of a Medicare suspension is therefore that the provider cannot continue in business throughout the 180-day initial period of suspension typically imposed by CMS.  Finally, in a limited number of cases, after a ZPIC or PSC has visited an office, the provider will subsequently learn that the contractor has recommended that the provider’s Medicare number be revoked.  In a fairly recent case we are aware of (not involving a client of the Firm), the contractor claimed that the provider failed to cooperate, a clear violation of the provider’s “Conditions of Participation” with Medicare.  As a result, the contractor recommended (and CMS approved) the revocation of the provider’s Medicare number.  Short of exclusion from participation in the Medicare program, this is arguably the most serious and far-reaching administrative action that can be taken against a Medicare provider.

In light of the seriousness of the situation, regardless of whether you are contacted by a RAC, a ZPIC or a PSC, you must take great care when responding to Medicare audits.  Administrative enforcement actions can be extraordinarily serious.  Therefore, is essential that you engage an experienced attorney and law firm to represent your interest.

Robert W. Liles, J.D., M.S., M.B.A., is a health lawyer with Liles Parker PLLC.   Liles Parker has offices in Washington, DC, Houston, TX and San Antonio, TX.  Prior to entering private practice, Mr. Liles served as an Assistant U.S. Attorney.  He now represents health care providers around the country in connection with administrative, civil and criminal health law issues.  He has extensive experience defending providers in audits by ZPICs, PSCs and other Medicare / Medicaid contractors.   For a complimentary consultation, please call:  1 (800) 475-1906.

« Previous Page