A Credible Allegation of Fraud Related to Medicare or Medicaid Services Will Result in Your Dental Practice Being Placed on “Suspension” or “Payment Hold.”

(December 31, 2012): Over the last year, many dentists, orthodontists and oral surgeons around the country who participate in federal health care benefits programs such as Medicare and Medicaid have found themselves accused of a "credible allegation of fraud," levied by federal / state investigators or agents contracted to audit dental providers on behalf of the government. As these dental professionals have learned, regulatory compliance is essential. Unlike physicians, hospitals, DME suppliers and other health care providers who are constantly under regulatory scrutiny, the dental community has largely been left alone by the government. In past years, Medicaid audits have occasionally occurred but the cases pursued have been infrequent and typically appeared to involve egregious improper conduct. Similarly, Medicare audits and investigations of the few dental services which qualify for coverage and payment have been relatively rare. As many dental providers are now finding, both law enforcement and government contractors are actively relying on sophisticated data mining and other targeting tools to identify and audit providers who may appear to be outliers, either in their coding, billing or utilization practices. Now, more than ever before, it is essential that dental providers examine each aspect of their business to better ensure that their actions fully comply with applicable statutory and regulatory requirements.

II. Under the ACA, if a “Credible Allegation of Fraud” is Raised Against a Dental Provider, the Provider’s Participation Status in Medicare May be “Suspended” and its Medicaid Payments May be “Placed on Payment Hold.”

With the passage of the Affordable Care Act (ACA) in March 2011, the Medicare Program (covered in Title XVIII of the Social Security Act (the Act)) was amended in a number of important ways. One of its more significant changes permitted the Secretary, Department of Health and Human Services (HHS) to:

“. . . suspend payments to a provider or supplier pending an investigation of a< span class"underline">credible allegation of fraud unless the Secretary determines that there is good cause not to suspend payments.”[1] (emphasis added).

When exercising this option, the Secretary is first required to consult with the Office of Inspector General (HHS-OIG) to determine whether a “credible allegation of fraud” against a provider or supplier is present. Importantly, the phrase “credible allegation of fraud,’’ has been expressly defined by HHS-OIG to include:

“. . .an allegation from any source, including but not limited to fraud hotline complaints, claims data mining, patterns identified through provider audits, civil False Claims Act, and law enforcement investigations.”

Over the past year, a number of Medicare providers have found themselves facing suspension based on an alleged “credible allegation of fraud” arising out of an anonymous complaint. This complaint may have been filed by a patient, a disgruntled former employee or possibly even a vindictive competitor. Alternatively, the suspension action may have been generated based on the provider’s billing patterns or the provider’s possible over-utilization of certain services. Importantly, the decision to suspend a provider from the Medicare program remains discretionary with CMS and HHS-OIG. In contrast, no such discretion exists in similarly situated Medicaid cases.

III. If a “Credible Allegation of Fraud” is Present, States Must Suspend Medicaid Payments:

A payment hold action is a “temporary denial of reimbursement under the Medicaid or other HHS program for items or services furnished” by a dental professional.[2] Medicaid payment holds are initiated by the Texas Health and Human Services Commission, Office of Inspector General (HHSC-OIG). This type of administrative remedy effectively freezes a dental provider’s cash flow. Payment hold actions are intended to stay in place until the dispute is resolved between the dental professional and HHSC-OIG.

If a credible allegation of fraud has been levied against a Texas provider of Medicaid dental services, the state must suspend all Medicaid payments to the dental provider. (See to 42 CFR § 455.23 (2011). In further support of such an action, the Texas Government Code section 531.102(g)(2), allows the state to place a Medicaid provider on payment hold “on receipt of reliable evidence that the circumstances giving rise to the hold on payment involve fraud or willful misrepresentation under the state Medicaid program in accordance with 42 C.F.R. 455.23, as applicable.” The bottom line is clear – if a credible allegation of fraud has been alleged against a Texas dental provider of Medicaid reimbursed services, the provider will in all likelihood be placed on payment hold – an action that is tantamount to a suspension from the program.

IV. Exceptions to the Suspension / Credible Allegations of Fraud Rule.

To date, HHSC-OIG has been reluctant to exercise its authority to waive a payment hold / suspension action in cases where a credible allegation of fraud has been alleged against a Texas dental provider of Medicaid services. Nevertheless, under the Affordable Care Act (ACA), if the state determines that “good cause” exists not to suspend payments, the government may waive its right to place a provider on payment hold and suspend payments. The following reasons have been cited as possibly constituting “good cause”:

“Upon a specific request by a law enforcement agency; (for example, when a suspension might alert a violator at a critical stage of an undercover investigation or compromise the identity of an informant);

If the state determines that another remedy could more effectively protect Medicaid funds (for example, through an injunction or court intervention);

If the state determines that the suspension is not in the best interests of the Medicaid program; and

If the state determines that a suspension will have an adverse effect on beneficiaries’ access to care.”[3]

Finally, HHSC-OIG may also decide to discontinue a payment hold / suspension action if a law enforcement agency declines to certify that a matter is still under investigation.

V. Final Remarks:

Unfortunately, very few dental professionals participating in either Medicare or Medicaid have developed and implemented an effective Compliance Plan. To the extent that portions of a program have been prepared, in most instances these sections have focused almost exclusively on HIPAA privacy and OSHA requirements. It is imperative that dental professionals examine their current practices and compare those practices with applicable documentation, medical necessity and coverage mandates. The number of claims audits currently underway by Medicare and Medicaid contractors is significant and is expected to continue to grow. Now, more than ever, it is essential that you examine your practice, identify and potential deficiencies, promptly pay back any overpayments and implement remedial measures to help ensure that these types of problems do not reoccur.

Robert W. Liles is Managing Partner at the health law firm, Liles Parker, PLLC. With offices in Washington, DC, Houston, TX, McAllen, TX and Baton Rouge, LA, our attorneys represent dental professionals around the country in connection with Medicare / Medicaid audits, Compliance Plan reviews and state peer review actions. Should you have any questions, please call us for a free consultation. Robert can be reached at: 1 (800) 475-1906.