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Texas Prosecutors are Aggressively Targeting Criminal Home Health Fraud

January 9, 2019 by  
Filed under Home Health & Hospice

Texas prosecutors are aggressively pursuing criminal home health cases. (January 9, 2019):  Despite real progress being made with respect to regulatory compliance, home health agencies, their owners, and affiliated health care professionals (such as referring / supervising physicians, therapists and staff) remain under strict government scrutiny. The government’s efforts to investigate and prosecute home health fraud cases have been especially evident in Texas.  In calendar year 2018, a number of home health agencies, owners and affiliated individuals have been indicted, prosecuted and / or sentenced in connection with their improper conduct.  This article examines many of these recent cases and discusses the improper conduct that led to these Texas home health prosecutions.

I. Texas Home Health Prosecutions in Calendar Year 2018:

Several significant home health fraud cases were investigated and prosecuted by the Department of Justice (DOJ) in Texas during 2018. These cases included, but were not limited to the following:

  • Southern District of Texas. December 2018.  In this case, the owner of a home health agency allegedly paid marketers and group home owners for Medicare beneficiary information which he used to bill Medicare and Medicaid for home health services that were either not provided or did not qualify for coverage and payment.  The government also alleged that the defendant owner personally falsified home health patient assessment forms to make the beneficiaries appear sicker on paper to receive higher reimbursement rates from Medicare,”and that he instructed agency employees to falsify home health certifications and forge physician signatures. A jury found the defendant guilty and he was sentenced to 109 months in prison. The defendant was also ordered to pay $3.5 million in restitution to the Medicare program.
  • Northern District of Texas. October 2018. Two owners and the administrator of a home health agency were convicted in this prosecution of various health care fraud violations after a six-day trial. The owners were convicted of conspiracy to commit health care fraud, and one of the owners and the administrator were convicted of two counts of making a false statement in connection with a health care benefit program. At trial, evidence was presented that both of the home health agency owners had previously been excluded from participating in federal health benefit programs. The government alleged that the administrator concealed the fact that the home health agency owners were excluded parties. The government further alleged that the administrator signed false documents indicating that a third person was the owner of the agency and that no one associated with the home health agency had been excluded from participating in federal health benefits programs such as Medicare and Medicaid.  Federal prosecutors were also able to show that the home health agency had billed the Medicare and Medicaid programs more than $3.7 million to which it was not entitled because the agency was owned by excluded parties. The defendants have not been sentenced as of the date of this publication.
  • Northern District of Texas. October 2018.  In this case, a licensed vocational nurse who was also the part-owner of a home health agency was sentenced to 120 months in prison for her role in the fraudulent submission of home health claims to Medicare for payment. The former part-owner and supervising physician at a physician house call company was also sentenced to 42 months in prison for his role in the fraud. Two additional home health agency employees were also convicted for their roles in the fraud. At trial,the government produced evidence that the supervising physician certified the medical necessity of home health services for a number of patients who had never been seen,and that the physician billed Medicare for over $1.6 millionin medically unnecessary home health certifications and physician home visits.
  • Southern District of Texas. October 2018. A patient recruiter was sentenced to 108 months in prison today for her role in a $3.6 million home health Medicare fraud scheme in this health care fraud case. At trial, the government submitted evidence to prove that the defendant patient recruiter sold personal patient information to a home health agency which it then used to bill the Medicare and Medicaid program for services that were either not medically need or were never even providedNotably, the patient recruiter paid Medicare beneficiaries, doctors, physical therapy companies and others for the paperwork and Medicare beneficiary information and services needed to facilitate the fraud.  Finally, to hide the fraud, the patient recruiter tried to make it look like she was paid an hourly wage and the marketing services she was providing were legal and proper.
  • Southern District of Texas. June 2018.  The part-owner of a home health agency, who also served as the agency’s Director of Nursing, was indicted in this prosecution for conspiracy to commit health care fraud.  The government has alleged that the defendant, along with an unnamed group of co-conspirators, paid physicians to falsely certify the medical necessity of home health services for Medicare beneficiaries.  The defendant and the unnamed group of conspirators are also charged with paying patient recruiters for referring Medicare patients to the home health agency.  The government has also filed a criminal forfeiture count in the indictment in which it claims that more than $16 million is subject to forfeiture.
  • Southern District of Texas. June 2018.  The owner of a Harris County home health agency was indicted by a Federal Grand Jury for Conspiracy to Defraud the United States, paying and Receiving Health Care Kickbacks, and substantive violations of the Federal Anti-Kickback Statute. Specifically, the government has alleged that the defendant owner and a number of co-conspirators paid kickbacks to several patient recruiters in exchange for referring Medicare beneficiaries to the owner’s home health agency. The government also alleges that the defendant owner and his co-conspirators paid kickbacks to a number of physicians in exchange for their certification of Medicare-required paperwork, and that they paid Medicare patients for their Medicare information in order to bill the Medicare program for home health services.  The case is set for trial in 2019, and the government also has included a criminal forfeiture count in the indictment, seeking the forfeiture of at least $1.2 million
  • Eastern District of Texas. June 2018.  In this case, the owner of a Missouri City, Texas home health agency, was indicted for conspiracy to violate the Federal Anti-Kickback Statute and f or violations of the Aiding and Abetting statutory requirements. The defendant and a co-conspirator patient recruiter are alleged to have paid cash amounts ranging from approximately $1,600 to $2,900 to Medicare beneficiaries to sign up for home health services with the defendant’s home health agency. The matter is set for trial later this year.
  • Southern District of Texas. May 2018. After a three-day trial, a Federal jury found a patient recruiter for a Texas home health agency guilty for her role in a $3.6 million Medicare fraud case. The patient recruiter was found guilty of one count of conspiracy to commit health care, five counts of health care fraud, and one count of conspiracy to pay health care kickbacks.  At trial, evidence was introduced that showed that the defendant and her co-conspirators submitted claims to Medicare for home health services that were not medically necessary and, in some case, were not provided. According to the government, the patient recruiter paid beneficiaries, doctors, physical therapy companies, and others for the paperwork, Medicare beneficiary information, and services needed to facilitate the fraud.”
  • Southern District of Texas. January 2018.  In this final case, a Texas mayor (a licensed physician and Medical Director) and three owners of a number of home health and hospice providers services, were indicted for their roles in an alleged $150 million health care fraud and money laundering scheme. The government has alleged that the owners caused kickbacks and bribes to be paid to the defendant physician (and other physicians) who served as Medicare Directors for their home health agency in exchange for falsely certifying that Medicare patients qualified for services. The defendant owners are alleged to have fraudulently kept patients on hospice services for years when such care was not medically appropriate.  A number of the defendants are also alleged to have made a false statement to the FBI and / or obstructed justice by producing false and fictitious records to a Federal Grand Jury.

II. What Lessons Can be Learned from these Home Health Prosecutions?

At the outset, it is important to note that none of the home health fraud prosecutions discussed above were based on differing professional assessments of the Medicare beneficiaries’ clinical condition or on a battle between medical experts over the medical necessity of home health services.  Instead, Texas prosecutors focused on illegal payments in the form of kickbacks and bribes by home health owners and operators in exchange for the referral of Medicare patients, falsification of certifications or statements, and/or for acquisition of beneficiary information. In other words, the Federal criminal cases being brought against home health owners, operators and affiliated physicians were based on the parties’ fraudulent conduct, not on the quality of care provided or the medical necessity of the home health services. Several fundamental lessons to be learned based on these cases include:

Lesson #1:  Sooner or later, improper Medicare claims practices and criminal wrongdoing WILL be identified by law enforcement or one of the contractors working for the Centers for Medicare and Medicaid Services (CMS). 

Since first passing the Medicare and Medicaid programs in 1965, the government has been compiling utilization, coding, and billing data related to the services billed to Federal and State health benefit programs.  CMS shares access to this information with a number of private claims processing and / or program integrity contractors.[1]  These entities are required (as part of their contractual obligations to CMS), to conduct data mining analyses of provider and supplier coding, billing and utilization practices.  While criminal conduct may escape discovery in the short run, it is essential for home health agencies, their owners, patient recruiters and affiliated physicians to recognize that there is a strong likelihood that the government will ultimately find out about the wrongdoing.

Lesson #2: Don’t pay kickbacks. . . ever. You will eventually be caught.

The Anti-Kickback Statute became a felony in 1977.[2]  Under the Anti-Kickback Statute, it is a criminal violation to offer, pay, solicit or receive anything of value to induce referrals or generate referrals reimbursed by Federal health care programs.[3]The Department of Health and Humans Services, Office of Inspector General (OIG) first publicized the agency’s concerns regarding home health related kickbacks in a “1995 Special Fraud Alert.”[4]  At that time, the OIG identified the following business practices as improper and potential violations of the Anti-Kickback Statute:

“Payment of a fee to a physician for each plan of care certified by the physician on behalf of the home health agency. 

Disguising referral fees as salaries by paying referring physicians for services not rendered, or in excess of fair market value for services rendered.

Offering free services to beneficiaries, including transportation and meals, if they agree to switch home health providers.

Providing hospitals with discharge planners, home care coordinators, or home care liaisons in order to induce referrals.Providing free services, such as 24-hour nursing coverage to retirement homes or adult congregate living facilities in return for home health referrals.

Subcontracting with retirement homes or adult congregate living facilities for the provision of home health services to induce the facility to make referrals to the agency.”  

Most of the Texas home health prosecutions pursued by DOJ prosecutors in 2018 involved illegal kickback conduct that the government first identified its 1995 Special Fraud Alert.  Despite the fact that more than twenty years have elapsed, a number of home health agency owners, operators, marketing personnel and referring physicians have continued to engage in illegal kickback activities.

Lesson #3: Don’t play games. Efforts to deceive the government or obstruct an investigation will only compound your problems.

In the criminal cases outlined in Section II above, a number of the defendants engaged in deceitful conduct. Several examples of the deceitful conduct included:

“A home health agency owner was alleged to have falsified home health patient assessment forms. 

A home health agency owner was alleged to have instructed home health staff to falsify physician signatures.   

A home health agency administrator was alleged to have signed false documents indicating that a third-party owned the agency and that no excluded parties were associated with the agency, when in fact, the true owners had been excluded from participation in the Medicare program.  

Defendants were also alleged to have made a false statement to the FBI and / or obstructed justice by producing false and fictitious records to a Federal Grand Jury.”

There are several Federal statutes that are implicated by this type of deceitful conduct.[5]  Statutory provisions that may be implicated (depending on the facts), include, but are not limited to:

Fraud and False Statements (18 U.S.C. § 1001). It is illegal for any person, in connection with any matter before any branch of the federal government or any federal agency, to do any of the following: (1) falsify or conceal a material fact; (2) make any material misrepresentations; or (3) make or use any false document knowing that such document contains a material falsehood. 

False Statements Involving Health Care Programs (18 U.S.C. § 1035).  It is unlawful for any person to, in any matter involving a health care benefit program and in connection with the delivery of or payment for health care services, knowingly: (1) falsify or conceal a material fact; (2) make a material misrepresentation; or (3) use a document knowing that it contains a material misrepresentation.

Health Care Fraud (18 U.S.C. § 1347).  It is unlawful for any person to knowingly: (1) defraud any health care benefit program; or (2) obtain by false pretenses any money or property owned or under the control of a health care benefit program. 

Obstruction of a Criminal Investigation into Health Care Offenses (18 U.S.C. § 1518).  It is unlawful to prevent, obstruct, or delay the communication of information relating to a federal health care offense to a criminal investigator. 

False Statements Involving Federal Health Care Programs (42 U.S.C. § 1320a–7b(a)). It is unlawful for any person to: (1) knowingly make a false statement in an application for benefits or payment under a federal health care program; (2) knowingly make a false statement for use in determining rights to benefits or payment under a federal health care program; (3) knowingly conceals or fails to disclose any event affecting one’s eligibility for benefits or payment under a federal health care program; (4) knowingly use the benefits or payment of another under a federal health care program for some reason other than their intended purpose; (5) knowingly present a claim for a physician’s service under a federal health care program where the person presenting the claim knows the service provider was not a licensed physician; or (6) knowingly assist another in disposing or transferring of assets such that he or she will be eligible for benefits under a federal health care program. 

Violations of these statutes are often uncovered during the course of administrative audits by CMS program integrity contractors. These types of violations may also arise in connection with patient complaints and whistleblower cases.

Lesson #4:  Medical Director agreements — it all comes down to the nature of the business relationship. 

Both parties need to recognize the importance of conducting due diligence before entering into a contract with a Medical Director.  Does the home health agency have an effective Compliance Program in place? Has either the home health agency or the physician being considered for a Medical Director position been the subject of an adverse action by Medicare, Medicaid, or a private payor?  To paraphrase the Greek philosopher Aesop, “You are judged by the company that you keep.”

When reviewing Medical Director agreements, government prosecutors and investigators are trained to conduct a critical assessment of these business relationships.  Are the terms of the Medical Director agreement consistent with Fair Market Value principles?  Has the Medical Director properly documented the services he or she provided and properly recorded the amount of time being spent in the performance of his or her Medical Director duties?  How many patient referrals are generated by your Medical Directors?  In a perfect world, a home health agency would not receive any patient referrals from the agency’s Medical Director.  To the extent that an agency’s Medical Director does, in fact, make a significant number of referrals to the agency for home health services, the government will understandably wonder whether the referrals being made are in exchange, in whole or in part, for the monies being paid to the physician under the Medical Director agreement.

Lesson #5:  Do you employ sales or marketing personnel? Regardless of whether you refer to a position as a Community Outreach Coordinator, a Marketing Specialist or a Physician Liaison, the government will still carefully review how these individuals are compensated, and the actual duties that are being performed.    

Marketing activities that may constitute ordinary business courtesies if extended to an actual or potential referral source in another industry, are often illegal in the context of Federal health care programs. Home health agencies that employ or contract with individuals to conduct marketing services on behalf of the agency need to ensure that the services being performed do not violate the Federal Anti-Kickback Statute or, if applicable, a state’s bribery law or all-payor statute.  Compensation agreements that reward a marketing individual based on the number of patient referrals generated are especially problematic.

III.  Conclusion:

The likelihood that your home health agency will be subjected to a Medicare or Medicaid audit or investigation increases every day.  As a participating provider in one or more Federal health care programs, providers have an affirmative obligation to ensure that your claims are properly documented, coded, and billed.  Additionally, providers must ensure that otherwise payable home health service claims have not been “tainted” by any statutory or regulatory violation of the Stark laws, the Federal Anti-Kickback Statute or the False Claims Act. When examining whether a claim is “payable,” a provider needs to remember that even though the medical service at issue may have been medically necessary and qualified for payment, if it is the result of an illegal activity, it will be tainted and will likely not qualify for payment. Unfortunately, many providers have never researched or reviewed the proper rules covering the work they provide.  If you have questions?  Give us a call.  Liles Parker attorneys have extensive experience representing home health providers around the country in connection with Medicare audits and investigations.

Robert W. Liles, J.D., M.B.A., M.S., serves as Managing Partner at the health law firm Liles Parker, PLLC.  Liles Parker attorneys represent home health and hospice agencies around the country in connection with Medicare and Medicaid audits and investigations of home health and hospice services.  Has your agency received an administrative request or a subpoena for records?  Give us a call.  We can help. For a free consultation, please call: 1 (800) 475-1906.

[1] CMS works with claims processing contractors (Medicare Administrative Contractors (MACs)), and program integrity contractors (such as Recovery Audit Contractors (RACs), Supplemental Medical Review Contractors (SMRCs) and Uniform Program Integrity Contractors (UPICs) to identify overpayments and instances of potential fraud which may be referred to law enforcement authorities for investigation and prosecution.

[2] 42 U.S.C. 1320a-7b(b). The Medicare-Medicaid Anti-Fraud and Abuse Amendments of 1977 (Public Law 95-142), made violations of the Anti-Kickback Statute a felony. It also made those who offered remuneration for referrals and those who received them subject to various penalties.

[3] Under 42 U.S.C. 1320a-7b(f),a “Federal health care program” is defined as:

“(1) any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government (other than the health insurance program under chapter 89 of title 5); or

(2) any State health care program, as defined in section 1320a-7(h) of this title.”

[4] Federal Register, August 10, 1996 (Volume 60, Number 154). A copy of this Special Fraud Alert can also be found on OIG’s website.

[5] For each of the criminal statutes identified below, there are corresponding regulations which would authorize the imposition of Civil Money Penalties by the Health and Human Services, Office of Inspector General (HHS/OIG), see, 42 U.S.C. 1320a-7a(a).

Aetna’s SIU is Actively Auditing Dental Claims. Are Your Dental Services Compliant with Applicable Regulatory and Contractual Requirements?

Dental Claims(January 3, 2019):  Slowly but surely, the percentage of adults and children with dental insurance coverage benefits has gradually climbed.  These increases have been driven, at least in part, by several factors.  First, despite the fact that traditional Medicare does not cover routine dental services, a number of Medicare Advantage plans are now offering coverage for routine dental procedures such as cleanings and fillings.  Second, approximately 37 states have expanded their Medicaid plan’s eligibility requirements.  Notably, 25 of these states now provide at least limited dental benefits for adult Medicaid beneficiaries.[1] Finally, a growing number of employers are now offering supplemental dental policies at affordable prices for their staff and families. Collectively, the American Dental Association’s (ADA’s) Health Policy Institute has estimated that approximately 89.7% of children and 72.5% of adults currently have some level of dental benefits coverage.[2]

Aetna is one of the largest insurance payors currently offering dental service plans. In fact, more than 12.7 million individuals now have coverage for dental services through Aetna.[3]  The payor has developed dental benefits packages that are offered by a number of Medicare Advantage, Medicaid and private plans around the country. Not surprisingly, Aetna’s “Special Investigations Unit” (SIU) has been aggressively working to identify and address suspected instances of dental improper billing practices, fraud and abuse.  The purpose of this article is to provide an overview of Aetna’s dental claims program integrity auditing practices and discuss steps that your dental practice can take to reduce its level of risk and hopefully avoid the imposition of a significant overpayment by the payor.

I. Aetna SIU Dental Enforcement Activities:

Aetna employs a core team of investigators to review and assess questionable dental claims billed to one or more of their programs.  In addition to cases involving allegations of improper billing, the SIU is also responsible for investigating possible instances of health care fraud and abuse.  From a business standpoint, Aetna’s SIU has proven to be financially prudent.  Aetna’s SIU claims that for every dollar spent on enforcement, it recovered and / or saved the payor fifteen dollars.  As you can imagine, a return on investment of 15 to 1 provides significant motivation for Aetna to further expand its SIU’s investigation efforts.

From a practical standpoint, Aetna’s enforcement authorities are limited to taking administrative action against a dental provider when wrongdoing has been identified.  This may include the assessment of an overpayment and / or termination from one or more of Aetna’s participating provider programs.  In some instances, Aetna may also report a dental provider to the “National Practitioner Data Bank (NPDB).” [4]  In addition to dental professionals having the ability to “self-query,” it is important to remember that when a dentist is reported to the NPDB, the information is also made available to:

  • Hospitals.
  • Health Care Entities with Formal Peer Review Functions.
  • Health Plans.
  • Professional Societies with Formal Peer Review Functions.
  • Quality Improvement Organizations.
  • State Licensing and Certification Authorities State Law Enforcement Agencies.
  • State Medicaid Fraud Control Units.
  • State Agencies Administering or Supervising the Administration of a State Health Care Program.
  • Agencies Administering Federal Health Care Programs, Including Private Entities Administering Such Programs Under Contract.
  • Federal Licensing or Certification Agencies.
  • Federal Law Enforcement Officials or Agencies.

Unfortunately, after being reported to the NPDB, many dentists and other health care providers have suffered the proverbial “death by a thousand cuts.”  After Aetna or another payor takes a reportable adverse action against you and files the report with the NPDB, it is quite common for other payors to initiate their own reviews of your dental practices and claims.  This often results in additional adverse actions being pursued by other payor networks.  Notably, most payor participation agreements include a requirement that you notify them with 30 – 60 days (depending on the payor) of any adverse action taken against you or your license.  In recent years, the mere failure to file this report in a timely fashion has been cited as justification by some payors for terminating a provider’s participation in their network.

II. Examples of Criminal Cases Brought Against Dentists in Connection with Fraudulent Aetna Claims:

It is important to keep in mind that in addition to offering private dental insurance products, the company has greatly expanded its Medicare Advantage, Medicaid and Medicaid Advantage programs footprint.  Additionally, the payor offers a number of dental coverage programs through the Federal Employee Health Benefits Programs (FEHBP).  These relationships have further strengthened Aetna’s close working relationship with Federal and State prosecutors, investigators, auditors and agents around the country.  Why does this matter?  It is important to keep in mind that Aetna’s SIU will not hesitate to refer cases involving fraud and abuse to law enforcement.  Several cases brought against dentists for defrauding Aetna and other private payors include the following:

Virginia.  In this case, a Virginia dentist was sentenced to 25 months in prison for illegally dispensing controlled substances and for using the identity of another dentist to fraudulently bill Aetna for more than $160,000 in dental services he provided to family members.

Virginia.  In this case, the owner / operator of a dental practice was sentenced to 30 months in prison for defrauding Medicaid and four dental insurers of approximately $783,000.  In this case, the defendant dentist’s fraud scheme included:  (1) the fraudulent billing of dental services to Medicaid and other payors for dental services that were never rendered, some of which were billed while the dentist was out of the country; (2) the improper use of incorrect CDT billing codes that resulted in higher bills than were justified by the actual dental services provided; (3) the fraudulent “backdating” of dental services in an effort to have certain dental services covered by the insurance payor AFTER the patient’s insurance coverage had been terminated.

New Jersey.  In this case, a New Jersey dentist pleaded guilty to theft after fraudulently altering the dates of service when dental work for provided. The dentist admitted that he had falsified the dates of service in an effort to avoid contractual date restrictions set out in the patient’s dental insurance policies.  After pleading guilty, he faced up to five years in state prison.

III.  How Are Dentists and Their Practices Targeted by Aetna’s SIU?

Aetna SIU reviews and audits of dental claims can arise in a number of ways.  In most cases, Aetna’s SIU identifies audit target based solely on the results of data-mining, without anyone actually taking the time to review any of your dental practice’s patient records.  This type of review examines the CDT coding and billing information submitted by the dental practice and takes into account the provider’s billing patterns and those of his or her peers and other dental providers.  Once a target is identified, Aetna’s SIU will normally advise a dental practice that a review of relevant patient dental records is necessary in order to determine whether or not an overpayment exists. In addition to data-mining, Aetna’s SIU may also initiate an audit based on:

  • A prior history of alleged overpayments.
  • An adverse report filed against a dental professional on the NPDB.
  • Complaints from beneficiaries and their families.
  • Actions taken by State Dental Boards.
  • Actions taken by Federal and / or State prosecutors and regulators.

When Aetna’s SIU suspects that a dental provider is committing fraud, it will generally contact one or more of the dentist’s Aetna patients to confirm whether certain dental services were actually rendered.  Many of our clients first heard that Aetna was conducting an audit of their claims from one of the practice’s patients.

IV. Examples of Improper Dental Coding and Billing Practices:

Examples of improper claims cited by Aetna SIU investigators have included:

  • Billing for dental services that are not considered medically necessary after reviewing the beneficiary’s dental records.
  • Billing for radiographs when no record of the x-rays can be produced.
  • Billing for dental services that have been based on radiographs when a review of the x-rays does not show that the services were medically necessary.
  • Billing for dental services that are not covered due to contractual date restrictions.
  • Billing for dental services under the identity of a credentialed dentists when, in fact, the dental services were provided by a non-credentialed dentist.
  • Billing for dental services that were not provided.
  • Billing for dental services that qualify for coverage, when other non-covered dental services were actually provided.
  • Failure to collect contractually required co-payments and deductibles from patients.
  • Claims that are submitted with falsified dates of services in order to avoid denial because the services were provided after a patient’s period of coverage.
  • Improper unbundling of claims for dental services that are supposed to be billed together.

V. Steps That You Can Take to Reduce Your Level of Risk:

As with any payor, it is essential that dentists and dental practices submitting claims to Aetna for coverage and payment take the time to review the terms of their participation agreement and understand the specific contractual limitations that may apply to a specific beneficiary’s plan.  In recent years, compliance plans have become an essential program integrity tool utilized by dentists and dental practices.  Compliance programs aimed at reducing, preventing, and deterring fraudulent and improper conduct are at the forefront of the health care industry’s goals.  These programs can also benefit dental practices by helping them avoid costly litigation and by streamlining their business operations.  Additional benefits of implementing a compliance program include:

  • Proactive approach.  A compliance program is a proactive way to make sure that your dental practice is meeting all ofits statutory and regulatory obligations.
  • Evidence of good faith.  The existence of a compliance program serves as evidence of a good faith effort to comply with the law in the event your dental practice becomes the subject of an investigation.
  • Sentencing guidelines.  In the event of criminal prosecution, the existence of a compliance plan is favorably considered under the sentencing guidelines.  Your dental practice and its staff will also likely benefit from its compliance efforts if civil or administrative proceedings are pursued by the government or private payors such as Aetna.
  • Minimize mistakes. An effective compliance program can speed-up and optimize the proper payment of your dental claims.  It can also minimize the likelihood that you will submit incorrect dental claims to insurance companies for payment.

VI. Conclusion:

If your dental practice is audited by Aetna or another payor, it is important that you contact qualified health law counsel before you respond to the payor’s request for documentation.  You need to put your best foot forward when responding to an audit.  We can assist you in that regard.

The attorneys at Liles Parker have extensive experience representing dentists and dental practices in connection with dental claims audits.  Notably, the attorneys working on your dental case are also Certified Professional Coders and have successfully passed the certification exam of the American Association of Professional Coders.

Robert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law.  Liles Parker attorneys represent health care providers and suppliers around the country in connection with UPIC audits, ZPIC audits, OIG audits and DOJ investigations of Medicare telehealth services.  He also advises health care providers in connection with Medicaid and private payor audits of telehealth services. Are you currently being audited or under investigation?  We can help.  For a free initial consultation regarding your situation, call Robert at:  1 (800) 475-1906.

[1] Henry J. Kaiser Family Foundation, “Current Status of State Medicaid Expansion Decisions,” as of December 28, 2018.

[2] ADA Health Policy Institute, Dental Benefits Coverage in the U.S.

[3] Aetna Facts, can be found at:

[4] The types of actions that must be reported to the National Practitioner Data Bank are quite extensive.  Notably, reportable actions are limited to allegations of malpractice.  A wide scope of other adverse actions against a professional licensee (such as a dentist) must also be reported.

Recent Changes to DOJ’s “Justice Manual” Addressing De-Facto Regulations and Agency Guidance Documents

Guidance Documents and De-Facto Regulations not Supported by Existing Statutes and Regulations are Not Binding(December 27, 2018):  On November 16, 2017, Attorney General Jeff Sessions issued a memorandum[1] (Sessions Memo) implementing the principles set out in President Trump’s Executive Order 13777.[2]  The Sessions Memo was addressed to all components of the U.S. Department of Justice (DOJ) and noted the fact that in the past, some DOJ guidance documents had not gone through the rulemaking process but had still been issued and used to bind private parties.  As the memorandum further noted:

“Effective immediately, Department components may not issue guidance documents that purport to create rights or obligations binding on persons or entities outside the Executive Branch (including state, local, and tribal governments).”

The purpose of this memorandum was fairly straight-forward.  Regulated parties should be able to rely on statutory and regulatory requirements that have been implemented in accordance with the legislative and rulemaking process. Guidance documents that have not gone through this formal process shouldn’t be used to establish obligations or rights with respect to regulated private parties. The Sessions Memo was intended to prevent DOJ components from “evading required rulemaking processes by using guidance memos to create de facto regulations.”[3] (emphasis added).

Several months after the issuance of Attorney General’s memorandum, Associate Attorney General Rachel Brand issued a related memorandum (Brand Memo) addressing this issue.[4]  The Brand Memo made it clear that the principles set out in the Attorney General’s memorandum should also be used by DOJ prosecutors when determining whether guidance documents issued by other federal agencies should be considered “binding” when the requirements set out in the guidance documents are not supported by existing statutes and / or regulations.  As the Brand Memo states:

“. . . the Department should not treat a party’s noncompliance with an agency guidance document as presumptively or conclusively establishing that the party violated the applicable statute or regulation.  That a party fails to comply with agency guidance expanding upon statutory or regulatory requirements does not mean that the party violated those underlying legal requirements; agency guidance documents cannot create any additional legal obligations.”   (emphasis added).

Although the Brand Memo was directed at the use of guidance documents in False Claims Act and other affirmative civil enforcement cases,[5]  as we will discuss in the sections below, the principles set out in the memorandum should also applicable to criminal enforcement actions.

Not surprisingly, the role of agency guidance when assessing a health care provider’s obligations under the law have been debated ever since the Sessions and Brand memoranda were first issued. Almost a year after the Brand Memo was released, the DOJ has recently expanded upon these principles in its revised issuance of the “Justice Manual.”[6]  This article reviews these new provisions and discusses how DOJ’s guidance may impact fraud cases brought against health care providers and suppliers.

I. Impact of the DOJ’s Position in Civil and Criminal Health Care Fraud Cases:

At this point, you may be thinking “Why should I care about these directives? As discussed below, the possible impact of the Sessions and Brand memos on health care providers and suppliers can be substantial.  Moreover, depending on the facts in your particular case, DOJ’s consideration of agency guidance (that is not based on an existing regulation or statute) may make, or break the government’s fraud case against a health care provider or supplier.  On or about December 18, 2018, the DOJ published its latest guidance in the Justice Manual (§§ 1-19.000[7] and 1-20.000[8]) on the limitations of issuance and use of agency guidance documents.  These Justice Manual provisions are discussed in more detail below.

II. Justice Manual, § 1-19.000 – Limitation on Issuance of Guidance Documents:

As § 1-19.000 of the Justice Manual provides, when issuing non-binding guidance documents, DOJ components should expressly identify the documents as guidance that does not carry the force or effect of law.  Moreover, DOJ components should clearly state that noncompliance with these voluntary standards will not, in itself, result in any enforcement action.”  It is important to note that DOJ components may still issue guidance documents that are intended as voluntary guidelines or standards for private entities to consider and follow.  However, such guidance documents must make it clear that the instructions set out in the guidance is not legally binding and may be beyond an entity’s legal obligations under existing statutes and regulations.

What constitutes an agency guidance document? Great question. As § 1-19.000 reflects, the term “guidance document” does not include:

  • Decisions, orders, or other documents issued in adjudicatory actions that do not purport to or have the effect of binding anyone beyond the parties to the adjudication. 
  • Documents informing the public of the agency’s enforcement priorities or factors the agency considers in exercising its prosecutorial discretion. 
  • Internal directives, memoranda, legal and strategy monographs, or training materials for agency personnel directing them on how to carry out their duties, positions taken by an agency in litigation, or legal advice provided by the Department.

III.  Justice Manual § 1-20.000 – Limitation on Use of Guidance Documents in Litigation:

In contrast to § 1-19.000 (which covers the ISSUANCE of guidance documents by DOJ components), § 1-20.000 of the Justice Manual focuses on the USE of guidance documents issued by other federal agencies in litigation.  As § 1-20.100 of the manual provides:

“Criminal and civil enforcement actions brought by the Department must be based on violations of applicable legal requirements, not mere noncompliance with guidance documents issued by federal agencies, because guidance documents cannot by themselves create binding requirements that do not already exist by statute or regulation.” (emphasis added).

Justice Manual § 1-20.201 notes that if an agency guidance document describes a statutory or regulatory provision, federal prosecutors are still permitted to use and rely on agency guidance documents to argue that a party’s awareness of the guidance document shows that the party had the requisite notice or knowledge of the law.  Justice Manual § 1-20.202 further provides that an agency guidance document can be used as probative evidence that:

“. . . a party has satisfied, or failed to satisfy, professional or industry standards or practices relating to applicable statutory or regulatory requirements.”[9]

This section of the Justice Manual further notes that this rationale applies “broadly” in the healthcare arena and expressly cites guidance documents issued by the Centers for Medicare and Medicaid Services (CMS) such as the agency’s Medicare Benefit Policy Manual and Local Coverage Determinations (LCDs) as relevant evidence that procedures may (or may not) be medically reasonable and necessary.[10] For example:

“. . . if a primary care physician writes prescriptions in excess of the CDC Guideline for Prescribing Opioids for Chronic Pain, which contain medical recommendations for primary care physicians, that fact may be offered as evidence that the prescriptions were made and opioids dispensed without any “legitimate medical purpose” and outside “the usual course of professional practice,” 21 C.F.R. § 1306.04(a), in violation of the Controlled Substances Act.”                                    ‘ 

Justice Manual § 1-20.204 further notes that DOJ may cite an agency guidance document “where a party’s compliance, or failure to comply, with the agency guidance is itself relevant to the claims at issue.”  For example, if a health care provider falsely certifies compliance with a guidance document AND the certification is material to a decision by CMS (including its contractors) to pay a claim, the false certification may be offered by DOJ prosecutors to establish the elements of falsity, materiality and knowledge. As the section further provides:

“. . . when a government contract or provider agreement requires compliance with some agency guidance document, it is the contract—not the agency guidance itself—that makes the agency guidance pertinent and, in these cases, violations of that guidance undertaken with the requisite mental state may expose individuals to liability.” 

IV. Conclusion:

From a practical standpoint, the Sessions and Brand memoranda and the recent updates to the Justice Manual will likely only come into play if the DOJ is directly involved in a case, either before or after a civil or criminal case has been filed.  Having said that, the DOJ is not the only government entity tasked with complying with Executive Order 13777.  All federal agencies, including those of the Department of Health and Human Services (such as the Centers for Medicare and Medicaid Services(CMS)) are required to identify and repeal existing guidance documents that are outdated, unnecessary, inconsistent with existing law, or otherwise improper.

In light of this mandate, CMS published its Proposed Rule entitled “Medicare and Medicaid Programs; Regulatory Provisions to Promote Program Efficiency, Transparency, and Burden Reduction,”[11] on September 20, 2018.  To its credit, CMS has issued a number of proposals that are intended to alleviate the regulatory burden on Ambulatory Surgical Centers, Hospices, Home Health Agencies, Hospitals, Transplant Centers, Community Mental Health Centers, Rural Health Clinics and various other types of health care provider and suppliers.

Unfortunately, almost all of the proposed changes have been aimed at specific types of health care providers and suppliers.  For the most part, CMS’s Proposed Rule does not touch upon the quasi-legal obligations that have been imposed on health care providers and suppliers in the form of National Coverage Determination rules (NCDs), Local Coverage Determination rules (LCDs), manual provisions (such as the Medicare Program Integrity Manual (PIM), Medicare Claims Processing Manual (MCPM), and Medicare Benefit Policy Manual (MBPM)), along with practically countless issuances of policy guidance memoranda and other documents.  Although some of this guidance is, in fact, based on already existing statutory and regulatory requirements that have been properly vetted through the rule-making process, much of this information would undoubtedly qualify as “de facto regulations” that are not statutorily based.       

Unless CMS takes further action in this regard, all health care providers and suppliers participating in Medicare, Medicaid and / or other federal health benefits providers should continue to comply with all applicable guidance that has been issued by federal or state sponsored health plans (or their contractors, such as Medicare Administrative Contractors) which set out the specific requirements that must be met in order for a health care service or item to qualify for coverage and payment.  These requirements include, but are not limited to specific guidance regarding the medical necessity of certain services, frequency and dosage restrictions, documentation mandates and billing / coding requirements.

Robert W. Liles represents health care providers and suppliers in UPIC and ZPIC audits of claims. Robert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law.  Liles Parker attorneys represent health care providers and suppliers around the country in connection with UPIC audits, ZPIC audits, OIG audits and DOJ investigations of Medicare / Medicaid False Claims Act allegations.  Are your Medicare or Medicaid claims currently being audited or under investigation?  We can help.  For a free initial consultation regarding your situation, call Robert at:  1 (800) 475-1906.

[1] Memorandum dated November 16, 2017, titled Prohibition on Improper Guidance Documents.”

[2] On March 21, 2017, President Trump signed Executive Order 13777.  Simply put, pursuant to Executive Order 13777, federal agencies are required to identify and repeal existing guidance documents that are outdated, unnecessary, inconsistent with existing law, or other improper.  Citing Executive Order 13777  and the Sessions Memo, on December 21, 2018, Acting Attorney General Matthew Whitaker announced in a Press Release that the DOJ was rescinding an additional 69 guidance documents that were either “unnecessary, outdated, inconsistent with existing law, or otherwise improper.”  The Regulatory Task Force established by the DOJ pursuant to Executive Order 13777 has been active in its efforts to rescind guidance documents that have been determined to be unnecessary, inconsistent with existing law, or improper.  In December 2017, DOJ’s Regulatory Task Force identified 25 guidance documents to be repealed. The Task Force subsequently identified 24 additional guidance documents to be repealed in July 2018.

[3] See Press Release titled “Attorney General Sessions Ends the Department’s Practice of Regulation by Guidance” issued November 17, 2017.

[4] Memorandum dated January 25, 2018, titled “Limiting Use of Agency Guidance Documents in Affirmative Civil Enforcement Cases.

[5] The term “Affirmative Civil Enforcement” refers to the filing of “civil lawsuits on behalf of the United States. The purpose of these civil actions is to recover government money lost to fraud or other misconduct or to impose penalties for violations of Federal health, safety, civil rights or environmental laws.”

[6] The Justice Manual was previously known as the United States Attorneys’ Manual.  It was revised and renamed the Justice Manual in 2018.

[7] Justice Manual § 1-19.000 can be found at this link.

[8] Justice Manual § 1-20.000 can be found at this link.

[9] See Justice Manual § 1-20.202.

[10] As set out in United States ex rel Polukoff v. St. Mark’s Hospital, No. 17-4014, at 14-15 (10th Cir. July 7, 2017), the use of agency guidance documents “does not give these documents the force of law, but rather aids in demonstrating that the standards in the relevant statutory and regulatory requirements have been or have not been satisfied.”   

[11] Medicare and Medicaid Programs; Regulatory Provisions to Promote Program Efficiency, Transparency, and Burden Reduction,” September 20, 2018. 83 FR 47686.

Audits of Telehealth Services are Increasing. Do Your Telehealth Services Meet Applicable Requirements?

Audits of Telehealth Services are Increasing(December 21, 2018): The use of “telehealth” technologies to diagnose and treat patients can be used to address provider shortages, improve patient access to otherwise unavailable specialized services, reduces costs, and provides an effective way to monitor the status of patients from long distances.  The many benefits of telehealth have been readily recognized by health care providers, payors and most importantly, patients. Unfortunately, the expanded use of telehealth services hasn’t gone as smoothly as hoped.  In recent years, a number of investigations brought by federal and state regulators have identified telehealth cases involving significant overpayments, violations of the False Claims Act and instances of criminal conduct.  This article examines the current enforcement landscape facing telehealth providers and discusses ways that a provider can better meet its obligations under the law and reduce a telehealth provider’s level of regulatory risk. 

I. “Telehealth” versus “Telemedicine”:

The Health Resources Services Administration (HRSA), an agency of the U.S. Department of Health and Human Services (HHS), has defined the term “telehealth” as the:

“[U]se of electronic communication and information technologies to provide or support long-distance clinical health care, patient professional health-related education, public health, and health administration.”[1]

The most common technologies used to provide telehealth services include videoconferencing, the internet, store-and-forward imaging, streaming media, and terrestrial and wireless communications.

Telehealth is different from telemedicine because it refers to a broader scope of remote healthcare services than telemedicine. While telemedicine refers specifically to remote clinical services, telehealth can refer to remote non-clinical services, such as provider training, administrative meetings, and continuing medical education, in addition to clinical services.

II. Background of Medicare Telehealth Coverage Requirements:

The Balanced Budget ACT of 1997 (BBA) mandated that Medicare cover certain Fee-For-Service (FFS) payments for “telehealth” services beginning in 1999.  The BBA also provided for the  funding of telehealth demonstration projects. Initially, covered telehealth services were limited to only those provided to Medicare beneficiaries in health professional shortage areas (HPSAs).  Additionally, the legislation mandated that Medicare practitioners be with the patient (and function as a “telepresenter”) when the telehealth consultation was conducted.  Not surprisingly, these restrictions were viewed as practically unworkable by health care providers and patients alike. Subsequent legislation under the Benefits Improvement and Protection Act of 2000 (BIPA) amended portions of the BBA and expanded Medicare‘s telehealth payment rules.

The list of telehealth services that may qualify for coverage under Medicare are released each year through the annual physician fee schedule rulemaking process. As a general rule, Medicare Part B will pay for covered telehealth services[2] when they are furnished by an interactive telecommunications system[3], as long as the following requirements are met:

(1) The physician or practitioner at the distant site must be licensed to furnish the service under State law. The physician or practitioner at the distant site who is licensed under State law to furnish a covered telehealth services described in this section may bill, and receive payment for, the service when it is delivered via a telecommunications system.

(2) Under 42 C.F.R. § 410.78(b)(2), the following providers qualify as a practitioner at the distant site:”

(i) A physician as described in 42 C.F.R. § 410.20.

(ii) A physician assistant as described in 42 C.F.R. § 410.74.

(iii) A nurse practitioner as described in 42 C.F.R. § 410.75.

(iv) A clinical nurse specialist as described in 42 C.F.R. § 410.76.

(v) A nurse-midwife as described in 42 C.F.R. § 410.77.

(vi) A clinical psychologist as described in 42 C.F.R. § 410.72.

(vii) A clinical social worker as described in 42 C.F.R. § 410.73.

(viii) A registered dietitian or nutrition professional as described in 42 C.F.R. § 410.134.

(ix) A certified nurse anesthetist as described in 42 C.F.R. § 410.69.

Please note, as set out under 42 C.F.R. § 410.78(e)(1), clinical psychologists and clinical social workers cannot bill Medicare for medical evaluation and management services. They may only bill and receive payment for individual psychotherapy via a telecommunications system.

Additionally, as provided under 42 C.F.R. § 410.78(e)(2), physician visits required under 42 C.F.R. § 483.40(c)[4] may not be furnished as telehealth services.

(3) The telehealth services are furnished to a beneficiary at an originating site.”[5] Under 42 C.F.R. § 410.78(b)(3), an originating site includes one of the following:

(i) The office of a physician or practitioner

(ii) A critical access hospital (as described in section 1861(mm)(1) of the Social Security Act).

(iii) A rural health clinic (as described in section 1861(aa)(2) of the Social Security Act).

(iv) A Federally qualified health center (as defined in section 1861(aa)(4) of the Social Security Act).

(v) A hospital (as defined in section 1861(e) of the Social Security Act).

(vi) A hospital-based or critical access hospital-based renal dialysis center (including satellites).

(vii) A skilled nursing facility (as defined in section 1819(a) of the Social Security Act).

(viii) A community mental health center (as defined in section 1861(ff)(3)(B) of the Social Security Act).

 (4) As required out under 42 C.F.R. § 410.78(b)(3), to qualify as an originating site, the location must also be:

(i) Located in a health professional shortage area (HPSA), as defined under section 332(a)(1)(A) of the Public Health Service Act (42 U.S.C. 254e(a)(1)(A)), that is either outside of a Metropolitan Statistical Area (MSA) as of December 31st of the preceding calendar year or within a rural census tract of an MSA as determined by the Office of Rural Health Policy of the Health Resources and Services Administration as of December 31st of the preceding calendar year, or

(ii) Located in a county that is not included in a Metropolitan Statistical Area as defined in section 1886(d)(2)(D) of the Act as of December 31st of the preceding year, or

(iii) An entity participating in a Federal telemedicine demonstration project that has been approved by, or receive funding from, the Secretary as of December 31, 2000, regardless of its geographic location.

 (5) The medical examination of the patient is under the control of the physician or practitioner at the distant site.  Additionally, as set out under 42 C.F.R. § 410.78(c), a telepresenter is not required as a condition of payment unless it is determined to be medically necessary by the physician or practitioner at the distant site.

Simply put, to qualify under Medicare as covered telehealth services, providers must take ensure that each element of the telehealth services comply fit within the restrictions set out above.  

III.  Medicaid Telehealth Services:

As with the case of Medicare, state Medicaid telehealth guidelines require that all qualified practitioners providing telehealth services meet the requirements of their State Practice Act.  With respect to the coverage and payment of telehealth services, the Medicaid programs of 49 states and the District of Columbia currently pay for live video telehealth services as long as jurisdiction specific requirements have been met. For example, as long as all applicable requirements are met, Texas Medicaid will pay for live video and for store-and-forward telehealth services[6] (in certain circumstances).  In Texas, Medicaid also covers home telemonitoring as long as certain conditions are met.  It is important that you conduct a careful review of your state’s requirements and restrictions before assuming that your state’s Medicaid program will cover telehealth services.    

IV. Private Payor Coverage of Telehealth Services:

Over the last decade, considerable progress has been made with respect to the coverage and payment of telehealth services by private payors.  This is due, in large part, to the passage of various private payor parity laws.  At last count, 39 states and the District of Columbia have enacted such laws.[7]  Private payor parity laws vary from one jurisdiction to another.  While some states laws focus on the types of specialty services qualify for telehealth coverage, other states have also enacted laws that require payers to treat telehealth-delivered care the same way as in-person care with respect to reimbursement.

V. OIG Telehealth Report Findings:

As the telehealth services industry has grown, regulatory compliance concerns have also increased.  Both governmental and private payors have identified a number of program integrity risks that require ongoing monitoring and assessment.  In recent years, the OIG has included a number of telehealth-related projects as part of their Work Plan. Most recently, the OIG identified the use of unauthorized telehealth originating site as areas of deficiency in its recent report titled “CMS Paid Practitioners for Telehealth Services that Did Not Meet Medicare Requirements.”[8] As reflected in the OIG’s report, after reviewing a sample of 100 claims:

  • 24 claims were unallowable because the beneficiaries received services at nonrural originating sites,
  • 7 claims were billed by ineligible institutional providers,
  • 3 claims were for services provided to beneficiaries at unauthorized originating sites,
  • 2 claims were for services provided by an unallowable means of communication,
  • 1 claim was for a noncovered service, and
  • 1 claim was for services provided by a physician located outside the United States.[9]

Collectively, 31 out of 100 claims (31%) of the telehealth claims examined by the OIG did not meet Medicare’s requirements for coverage and payment.

VI. Telehealth Fraud Cases:

The following cases are illustrative of the various types of telehealth fraud cases that are being identified, investigated and prosecuted around the country:

(2018):  Tennessee.  The government recently charged four individuals and seven companies with fraud for their involvement in an alleged fraud scheme that resulting in almost $1 billion in claims being submitted to insurance payors.[10]  The government has alleged that a defendant telemedicine company had their employees call and impersonate medical professionals in order to obtain information from patients.  The telemedicine company then contacted local physicians and falsely advised them that an electronic consultation was ready for their review.  The prescribing physicians were led to believe that a licensed health professional (not merely a telemedicine company employee) had examined the patient’s medical history and that the patients had requested the drug at issue.   The case is ongoing.

(2018):  California.  In this case, seven defendants have been charged with fraud for their roles in a massive “sham” telemedicine scheme that defrauded TRICARE out of an estimated $65 million. The defendants included a nurse practitioner, a physician and two chiropractors, among others. In this case, it was alleged that one or more individuals recruited and paid Marines and the defendants to fill prescriptions for specialty medications (filled by co-conspirator pharmacies) that resulted in fraudulent and / or tainted claims being submitted to TRICARE for payment.  This case remains ongoing.

(2018):  Florida.  In this case, a Florida compounding pharmacy paid the government $350,000 to settle allegations that it violated the federal False Claims Act when it filled prescriptions that did not meet TRICARE’s telemedicine coverage requirements.  When investigating the case, agents for the Defense Criminal Investigative Service (DCIS) found that pharmacy representatives made unsolicited calls to TRICARE beneficiaries, provided medically unnecessary compound medications to beneficiaries, and knowingly filled prescriptions from doctors who did not meet or properly consult with TRICARE beneficiaries.”

(2017):  Florida. In this case, a Florida compounding pharmacy and its owner agreed to pay the government $170,000 for violations of the federal False Claims Act.   The government alleged that the defendants knowingly submitted claims to TRICARE for compounded medications that did not qualify for coverage and payment because they the prescriptions were not issued pursuant to a valid physician-patient relationship. Instead, the prescriptions were issued after brief calls were conducted between the prescribing physician and the TRICARE beneficiary.   The telephone calls made did not meet applicable telehealth coverage requirements.  Notably, prosecutors also alleged that the prescriptions for compounded medications were not medically necessary AND were tainted because of kickbacks paid to marketers.

(2016):  Connecticut.  In this case, a Connecticut psychiatrist and his practice were sued by a whistleblower under the federal Civil Claims Act for improper submitting telehealth claims to Medicare for payment.  As the government found, the psychiatrist provided psychiatric services over the phone to Medicare beneficiaries that did not meet Medicare’s coverage requirements.  More specifically, treating a patient over the phone does not meet Medicare’s requirements that the services be provided using an interactive audio and video communications system that permits real-time communications between the physician and the Medicare beneficiary. Additionally, the Medicare patients receiving the telehealth services did not live in a HPSA nor meet any of the other requirements under 42 C.F.R. § 410.78(b)(3) to properly qualify as an originating site. To resolve the false claims allegations, the defendants paid the government $36,704.

(2016):  Florida.  In this complex case, multiple defendants (including a physician, a physician’s assistant, a pharmacist, individuals working for a telemarketing company and related corporate entities) were convicted of various charges arising out of their improper submission of fraudulent, tainted prescription claims to TRICARE for payment and resulting in approximately $5.7 million in payments. The government alleged that the clinicians with prescribing authority were paid kickbacks by the defendant pharmacist to sign prescriptions made out to TRICARE beneficiaries.  In addition to the kickback-tainted prescriptions, it is worth noting that there was no valid provider-patient relationship. Moreover, the prescriptions did not meet TRICARE’s telemedicine coverage requirements.  A number of the defendants have plead guilty to the charges and are awaiting sentencing.


As the Medicare requirements above reflect, telehealth services are subject to a number of restrictions.  First and foremost, not all services qualify for payments as telehealth services under Medicare’s coverage rules.  Assuming that the telehealth services to be provided do, in fact, qualify for coverage by Medicare, several additional requirements must be met.  For example, the originating site where the Medicare beneficiary is located must qualify as an authorized geographic location.  Is the region being served a rural area that has been designated as a HPSA? The specific location where the beneficiary will be receiving the services (such as a physician’s office) must also fit within Medicare’s narrow list of sites where a beneficiary can receive qualifying telehealth services.  Additionally, the type of practitioner providing the services at the distant site qualify as an eligible provider type under Medicare’s rules. Eligible providers must also meet applicable State Practice Act requirements to provide telehealth services.  For instance, several state legislatures have enacted rules that require practitioners providing telehealth services across state lines to also hold a valid state license where the patient is located. Finally, the telehealth services must be provided through the use of an appropriate interactive telecommunications system.

Are you providing telehealth services?  If so, it is essential that you conduct a comprehensive review of the logistical, documentation, medical necessity, billing and coding requirements that must be met in order for the services to qualify for coverage and payment.  Our attorneys can assist you with these efforts and / or represent you if your telehealth services are audited by Medicare, Medicaid or a private payor.

Robert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law.  Liles Parker attorneys represent health care providers and suppliers around the country in connection with UPIC audits, ZPIC audits, OIG audits and DOJ investigations of Medicare telehealth services.  He also advises health care providers in connection with Medicaid and private payor audits of telehealth services. Are you currently being audited or under investigation?  We can help.  For a free initial consultation regarding your situation, call Robert at:  1 (800) 475-1906.

[1] Telehealth in Rural America, Policy Brief March 2015.  National Advisory Committee on Rural Health and Human Services. 

[2] During Calendar Year (CY) 2018, services that may qualify for coverage as telehealth services under Medicare include:



Telehealth consultations, emergency department or initial inpatient          

HCPCS codes G0425–G0427

Follow-up inpatient telehealth consultations furnished to beneficiaries in hospitals or SNFs

HCPCS codes G0406–G0408


Office or other outpatient visits

CPT codes 99201–99215

Subsequent hospital care services, with the limitation of 1 telehealth visit every 3 days

CPT codes 99231–99233

Subsequent nursing facility care services, with the limitation of 1 telehealth visit every 30 days

CPT codes 99307–99310


Individual and group kidney disease education services

HCPCS codes G0420 and G0421

Individual and group diabetes self-management training services, with a minimum of 1 hour of in-person instruction to be furnished in the initial year training period to ensure effective injection training

HCPCS codes G0108 and G0109

Individual and group health and behavior assessment and intervention

CPT codes 96150–96154


Individual psychotherapy

CPT codes 90832–90834 and 90836–90838

Telehealth Pharmacologic Management

HCPCS code G0459

Psychiatric diagnostic interview examination


CPT codes 90791 and 90792


End-Stage Renal Disease (ESRD)-related services included in the monthly capitation payment

CPT codes 90951, 90952, 90954, 90955, 90957, 90958, 90960, and 90961


End-Stage Renal Disease (ESRD)-related services for home dialysis per full month, for patients younger than 2 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents

CPT code 90963


End-Stage Renal Disease (ESRD)-related services for home dialysis per full month, for patients 2-11 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents

CPT code 90964


End-Stage Renal Disease (ESRD)-related services for home dialysis per full month, for patients 12-19 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents


CPT code 90965


End-Stage Renal Disease (ESRD)-related services for home dialysis per full month, for patients 20 years of age and older

CPT code 90966


End-Stage Renal Disease (ESRD)-related services for dialysis less than a full month of service, per day; for patients younger than 2 years of age (effective for services furnished on and after January 1, 2017)

CPT code 90967


End-Stage Renal Disease (ESRD)-related services for dialysis less than a full month of service, per day; for patients 2-11 years of age (effective for services furnished on and after January 1, 2017)

CPT code 90968

End-Stage Renal Disease (ESRD)-related services for dialysis less than a full month of service, per day; for patients 12-19 years of age (effective for services furnished on and after January 1, 2017)

CPT code 90969

End-Stage Renal Disease (ESRD)-related services for dialysis less than a full month of service, per day; for patients 20 years of age and older (effective for services furnished on and after January 1, 2017)

CPT code 90970

Individual and group medical nutrition therapy

HCPCS code G0270 and CPT codes 97802–97804

Neurobehavioral status examination

CPT code 96116

Smoking cessation services

HCPCS codes G0436 and G0437 and CPT codes 99406 and 99407

Alcohol and/or substance (other than tobacco) abuse structured assessment and intervention services

HCPCS codes G0396 and G0397

Annual alcohol misuse screening, 15 minutes

HCPCS code G0442

Brief face-to-face behavioral counseling for alcohol misuse, 15 minutes

HCPCS code G0443

Annual depression screening, 15 minutes

HCPCS code G0444

High-intensity behavioral counseling to prevent sexually transmitted infection; face-to-face, individual, includes: education, skills training and guidance on how to change sexual behavior; performed semi-annually, 30 minutes

HCPCS code G0445

Annual, face-to-face intensive behavioral therapy for cardiovascular disease, individual, 15 minutes

HCPCS code G0446

Face-to-face behavioral counseling for obesity, 15 minutes

HCPCS code G0447

Transitional care management services with moderate medical decision complexity (face-to-face visit within 14 days of discharge)

CPT code 99495

Transitional care management services with high medical decision complexity (face-to-face visit within 7 days of discharge)

CPT code 99496

Advance Care Planning, 30 minutes (effective for services furnished on and after January 1, 2017)

CPT code 99497

Advance Care Planning, additional 30 minutes (effective for services furnished on and after January 1, 2017)

CPT code 99498


CPT code 90845

Family psychotherapy (without the patient present)

CPT code 90846

Family psychotherapy (conjoint psychotherapy) (with patient present)

CPT code 90847

Prolonged service in the office or other outpatient setting requiring direct patient contact beyond the usual service; first hour

CPT code 99354

Prolonged service in the office or other outpatient setting requiring direct patient contact beyond the usual service; each additional 30 minutes

CPT code 99355

Prolonged service in the inpatient or observation setting requiring unit/floor time beyond the usual service; first hour (list separately in addition to code for inpatient evaluation and management service)

CPT code 99356

Prolonged service in the inpatient or observation setting requiring unit/floor time beyond the usual service; each additional 30 minutes (list separately in addition to code for prolonged service)

CPT code 99357

Annual Wellness Visit, includes a personalized prevention plan of service (PPPS) first visit

HCPCS code G0438

Annual Wellness Visit, includes a personalized prevention plan of service (PPPS) subsequent visit

HCPCS code G0439

Telehealth Consultation, Critical Care, initial, physicians typically spend 60 minutes communicating with the patient and providers via telehealth (effective for services furnished on and after January 1, 2017)

HCPCS code G0508

Telehealth Consultation, Critical Care, subsequent, physicians typically spend 50 minutes communicating with the patient and providers via telehealth (effective for services furnished on and after January 1, 2017)

HCPCS code G0509

Counseling visit to discuss need for lung cancer screening using low dose CT scan (LDCT) (service is for eligibility determination and shared decision making (effective for services furnished on and after January 1, 2018)

HCPCS code G0296

Interactive Complexity Psychiatry Services and Procedures (effective for services furnished on and after January 1, 2018)

CPT code 90785

Health Risk Assessment (effective for services furnished on and after January 1, 2018)

CPT codes 96160 and 96161

Comprehensive assessment of and care planning for patients requiring chronic care management (effective for services furnished on and after January 1, 2018)

HCPCS code G0506

Psychotherapy for crisis (effective for services furnished on and after January 1, 2018)

CPT codes 90839 and 90840



For ESRD-related services, a physician, NP, PA, or CNS must furnish at least one “hands on” visit (not telehealth) each month to examine the vascular access site.

[3] Under 42 C.F.R. § 410.78(a)(3), the term “interactive telecommunications system” means: 

“[M]ultimedia communications equipment that includes, at a minimum, audio and video equipment permitting two-way, real-time interactive communication between the patient and distant site physician or practitioner. Telephones, facsimile machines, and electronic mail systems do not meet the definition of an interactive telecommunications system.”  (emphasis added).

Although the technologies described above do not qualify as interactive telecommunications systems, they still qualify as telehealth services (albeit non-covered telehealth services under Medicare).

[4] 42 C.F.R. § 483.40(c) services that may not be furnished by a physician as telehealth services include behavioral health related rehabilitation services such as physical therapy, speech-language pathology, occupational therapy, and rehabilitative services for mental disorders and intellectual disability, as required in a resident’s comprehensive plan of care.

[5][5][5] An originating site is the location of the qualified eligible Medicare patient when the telehealth service is furnished by a physician or practitioner at the distant site.  Originating sites are paid a fee for hosting the telehealth service.  In 2018, the fee paid to an originating site was $25.76.  Please note, under the Bipartisan Budget Act of 2018, the originating site fee will be paid in certain circumstances.  

[6] The definition of “store-and-forward” telehealth services varies from state to state.  Generally, store-and-forward telehealth services are those where information, images, sound, video, etc., are stored or recorded and later forwarded to another site for clinical evaluation.  In other words, it is not a real-time, live evaluation of a patient by a distant provider.

[7] Center for Connected Health Policy, “State Telehealth Laws & Reimbursement Policies.” (Fall 2018).

[8] A-05-16-00058 (April 2018).

[9] Ibid, page 5.

[10] Of the nearly $1 billion in claims submitted to payors for payment, only $174 million was ultimately paid by the payors.  Nevertheless, federal prosecutors will likely argue that the face value of the claims billed (not necessary paid) is the amount that should be used when calculating the defendants’ potential period of imprisonment under the Sentencing Guidelines.

Mobile Dentistry in Texas – An Overview of Regulatory Risk Areas to be Considered

December 10, 2018 by  
Filed under Dental Audits & Compliance

Mobile Dentistry(December 7, 2018):  Each state sets their own licensure requirements, rules and regulations regarding the practice of dentistry, all of which are subject to change. While there are differences from state to state, the approach taken by most states with respect to the practice of dentistry is fairly consistent. After conducting a review of several other states’ regulations, it appears that the requirements imposed by the State Board of Dental Examiners (SBDE) on dentists in Texas is generally in line with that of other states.  Having said that, the degree of regulatory oversight that has been placed on mobile dental practices may vary widely from state to state.  This article examines the status of mobile dentistry in Texas and outlines a number of compliance concerns that should be addressed by mobile dental providers operating in both Texas and other states.

I. Background of Mobile Dentistry in Texas:

The regulations[1] covering mobile dentistry went into effect on September 1, 2001 and require that “every mobile dental facility, and except as provided herein, every portable dental unit [2] operated in Texas by any entity must have a permit as provided by this title (relating to Mobile Dentistry Facilities[3]).”[4] There are only a limited number of circumstance in which a licensee without a permit for a portable dental unit may provide dental services through the use of dental instruments and equipment taken out of a dental office.[5]

Notably, the SBDE implemented the mobile dentistry permit requirements despite the fact that the Texas Dental Practice Act [6] does not expressly authorize the Board to issue permits or regulate these facilities.[7] In the absence of clear authority to do so, why did the Board issue these mobile dentistry regulations? As discussed in the Texas Register,[8] the SBDE imposed these permit requirements in order to be able to answer:

“inquiries from legislators, local officials, and other states agencies or the public regarding any mobile or portable dental operations. . . Of great concern to the Board is whether the services are provided in a manner to meet standard of care requirements, whether arrangements have been made for follow-up care, especially in emergency situations, and whether records of treatment provided will be available to the patients.”

II. State and National Concerns Driving the Regulation of Mobile Dentistry:

The need for mobile dentistry oversight has been echoed by regulators across the country. In numerous articles, the benefits (and concerns) of mobile dentistry have been discussed. One such article mentioned a study published in the July 2009 Journal of the American Dental Association (JADA, Vol. 140:7). In that study, researchers from the University of Michigan found that programs providing only preventive services may actually result in fewer children getting comprehensive dental care. One reason for this, is that:

“[O]nce someone has billed for examining or x-raying a patient, Medicaid generally won’t reimburse another dentist for doing these services for at least another six months . . . As a result, some patients may be getting fluoride or sealants at the expense of having cavities filled.”

While this study focused on Medicaid patients only, the same fears can be mirrored for all patients. State regulators across the country have expressed concern that mobile dental units will be used to collect as much money as possible while leaving dangerous conditions untreated. If a mobile dental unit discovers an issue they cannot or will not treat, it could be difficult for another provider to perform the care the patient requires without the potential duplication of diagnostic dental procedures. This is especially true if the patient does not receive a copy of their dental record. The new provider may have to repeat x-rays or conduct their own clinical exam to determine the necessary treatments, which may or may not be covered by the patient’s insurance. If the patient does not have insurance, or their insurance refuses to pay, the patient may be required to pay for the repeated service. If the patient is unable or unwilling to pay for these services, the patient could suffer devastating consequences. The patient may also be exposed to higher levels of radiation due to the need to perform more x-rays. These fears, among others, have led to many states to regulate mobile dentistry.

III. Differences Between Texas’ Regulation of Mobile Dentistry Versus How the State Regulates Bricks and Mortar Based Dentists:

Mobile dentist providers will be the first to argue that the regulations Texas has placed on their business model are more strict than those imposed on traditional brick and mortar based dental practices. While brick and mortar dental practices must comply with a number of regulatory requirements, mobile dentist providers must comply with all of those primary requirements AND the extra regulatory mandates specifically laid out for mobile dentists in the Texas Administrative Code.[9]

A. Specific Requirements Imposed on Mobile Dental Practices.

A licensed Texas dentist, organization authorized by the Dental Practice Act, or other organization as defined by rule 108.41(3) and approved by the SBDE that wishes to operate a mobile dental practice must apply to the Board for a permit and pay the application fee. If all requirements are met, then a mobile dental practice permit can be issued. A list of the requirements can be found at §108.42. A few of the specific requirements that all applicants that are not a governmental or higher education entity must provide include:

  • The name and address, and when applicable, the license number of each dentist, dental hygienist, laboratory technician, and dental assistant associated with the facility or unit for which a permit is sought;
  • A copy of a written agreement for the emergency follow-up care for patients treated in the mobile dental facility, or through a portable dental unit, and such agreement must include identification of and arrangements for treatment in a dental office which is permanently established within a reasonable geographic area;
  • A statement that the mobile dental facility or portable dental unit has access to communication facilities which will enable dental personnel to contact assistance as needed in the event of an emergency;
  • A statement that the mobile dental facility or portable dental unit conforms to all applicable federal, state, and local laws, regulations, and ordinances dealing with radiographic equipment, flammability, construction standards, including required or suitable access for disabled individuals, sanitation, and zoning;
  • A statement that the applicant posses all applicable county and city licenses or permits to operate the facility or unit;
  • Either a statement that the unit will only be used in dental offices of the applicant or other licensed dentists, or a list of all equipment to be contained and used in the mobile dental facility or portable dental unit, which must include:

(A) A dental treatment chair;
(B) A dental treatment light;
(C) When radiographs are to be made by the mobile dental facility or portable dental unit, a stable portable radiographic unit that is properly monitored by the authorized agency;
(D) When radiographs are to be made by the mobile dental facility or portable dental unit, a lead apron which includes a thyroid collar;
(E) A portable delivery system, or an integrated system if used in a mobile dental facility;
(F) An evacuation unit suitable for dental surgical use; and
(G) A list of appropriate and sufficient dental instruments including explorers and mouth mirrors, and infection control supplies, such as gloves, face masks, etc., that are on hand.[10]

The rules also lay out operating requirements for a mobile dental facility or portable dental unit. These rules require among other things, that before beginning a session a mobile dental practice operator must arrange for:

“(A) access to a properly functioning sterilization system;
 (B) ready access to an adequate supply of potable water; and
 (C) ready access to toilet facilities.”

All permit holders except government or higher education entities, also must submit to the SBDE on the 10th work day of September each year a written report for the preceding year ending August 31, “detailing the location, including a street address, the dates of each session, and the number of patients served and the types of dental procedures and quantity of each service provided; except that such written reports may exclude information concerning dental services provided to less than three individuals at a private residence.” The dental permits expire one year after the issuance date or whenever the permit holder is no longer associated with the Mobile Dental Facility or Portable Dental Unit, whichever is sooner. The permit is not transferable and can be canceled by the Board after an investigation and opportunity for a hearing is given. These are only a few of the myriad of operating requirements covering mobile dentists.[11]

III.  Different Regulations Apply to Mobile Dentists Who Serve Office Buildings than Mobile Dentists Who Serve Elderly Residents of Nursing Homes and / or Patients in Rural Areas:

All mobile dental facilities and portable dental units operated in Texas by any entity must hold a permit issued by the SBDE.  However, the following exceptions have been made for licensees treating residents of nursing homes or convalescent facilities:

“Licensees who do not have a permit for a portable dental unit or who are employed by a dental organization not having a portable dental unit permit may provide dental services through the use of dental instruments and equipment taken out of a dental office without a permit if . . . the treatment is provided to residents of nursing homes or convalescent facilities.”

This exception therefore allows for a dentist to more easily provide care to the elderly who live in nursing homes or convalescent facilities since the permit is not necessarily required.  There is no such exception for rural areas.[12] Otherwise, the requirements for mobile dentists who serve office buildings, the elderly, or rural areas are the same.

IV.  How is Mobile Dentistry Treated in Other States?  

Many states now have mobile dentists who serve office buildings and commercial customers (including, but not limited to, Maryland, Virginia, Washington D.C., New York, Tennessee, and California). Many of these mobile dentists offer their services to a wide range of customers (corporate environments, private homes, and/or nursing homes / assisted living facilities) rather than just specializing in providing services to office buildings or commercial customers. However, there are other providers who specifically focus on commercial customers as well.

V. How Does the Extent of Regulations Applicable to Texas Mobile Dental Practice Compare with that of Other States?

Each state is unique in how they approach mobile dentistry. Many states, such as Missouri, have not laid out any specific requirements for mobile dentists. All dentists in Missouri must abide by the same regulations as issued by the Missouri Dental Board. Other states, such as West Virginia, appear to have a bit more extensive regulation of mobile clinics than Texas. West Virginia requires for-profit organizations to pay $1,500 for a mobile clinic permit, the permit must be renewed annually, must provide handicap access via ramp or lift, have ready access to toilet facilities, have a covered, non-corrosive container for deposit of waste materials including biohazardous materials, have a Carbon Monoxide Detector and Smoke Detector installed, an AED on board, among other requirements.  A few states such as California and Mississippi also require on-site inspections of the mobile dental facilities, which Texas does not require.

VI. Mobile Dentistry Fraud Cases:

In recent years, both federal and state enforcement authorities have ramped up the investigation and prosecution of individuals and entities alleged to have submitted fraudulent dental claims to Medicaid for reimbursement. While only a handful of cases have been brought against mobile dentistry facilities, the cases that have been prosecuted are instructional.  The following two cases are reflective of the types of wrong-doing typically identified in mobile dentistry fraud cases:

  • New Jersey. The owner of a mobile dental company was prosecuted, found guilty and ordered to pay $7 million in restitution and serve 8 years in prison.  In this case, state prosecutors alleged that the dentist-owner and his staff overbilled or submitted false Medicaid claims for elderly patients in nursing homes, assisted living facilities, adult day care facilities and private homes. More specifically, the government claimed that:
  1. The defendants overbilled Medicaid for more services than the mobile dentists could have rendered in one day.
  2. The defendants billed for specific dental services that were not actually performed by the dentists.
  3. The mobile dentistry company billed Medicaid for a “behavior management” charge on almost every pediatric patient, even if it was not needed.
  4. The mobile dentistry company charged Medicaid for a “trip charge” to almost every Medicaid patient, even though the dentists were only entitled to one trip to a facility, regardless of how many patients were examined or treated.
  • Indiana. Federal prosecutors pursued Medicaid fraud charges against the owner of a mobile dentistry company that was alleged to have applied sealants (a non-covered services under Ohio and Indiana Medicaid rules) to the teeth of low income children in Ohio and Indiana, but billed the dental procedures as fillings (a covered serviced under Ohio and Indiana Medicaid rules) when submitting the claims to Medicaid for reimbursement.  A U.S. District Court judge sentenced the defendant to 3 ½ years in prison for his role in the fraudulent conduct.

VII. Additional Risk Areas to Consider:

As you may recall, the Affordable Care Act (ACA) passed in 2010 includes a provision which authorizes the Secretary, HHS to mandate that health care providers and suppliers establish a compliance program as a condition of their enrollment in Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP).  A number of states have also mandated that Medicaid providers implement an effective Compliance Program.  Does your mobile dentistry company have an effective compliance program in place?

As part of your compliance obligations, mobile dentistry companies billing Medicaid have an affirmative obligation to regularly audit and monitor their documentation to ensure that  claims submitted to Medicaid properly qualify for coverage and payment.  Problem areas we have noted include:

  • Failure to comply with state Medicaid and / or private payor documentation requirements. The most common deficiency we have seen in internal audits conducted has been a recurring failure of dentists to comply with state regulatory documentation requirements.  In cases where the state requirements were met, it was quite common to find the documentation requirements cited by Medicaid, Medicaid Advantage and private payor dental payor plans were not met.
  • Failure to record a complete medical history for each pediatric patient. A detailed medical history should be provided for each pediatric patient and should be updated at each visit. The American Academy of Pediatric Dentistry (AAPD) recommends that a patient’s medical history includes the following elements or “pieces of information” along with an elaboration of positive findings: medical conditions and / or illness; name and telephone number of primary and specialty care providers; hospitalizations / surgeries; anesthetic experiences; current medications; allergies / reactions to medications; other allergies / sensitivities; immunizations status; review of systems; family history; and social history.
  • Failure to record observations from x-rays. The dental notes did indicate, for most patients, when x-rays were taken. The radiographs typically accompanied the file but were not of diagnostic quality. Additionally, dentists failed to include any observations or interpretations from their review of the radiographs.  AAPD notes that patient progress notes should include details on radiographic exposures and the dentist’s interpretations.
  • Failure to properly document support for medical necessity. Pediatric dental records reviewed did not contain the name of the minor patient’s parent and many times the records contained identical narratives. Progress notes for each visit should contain the date of service, chief complaint or reason for the visit, radiographic exposures and interpretations, treatment rendered, and post-operative instructions and prescriptions.  Additionally, our reviews have found that there was often little detail provided to support medical necessity of pediatric dental treatments provided. For example, prophylaxis was typically provided because it was medically required. Although dental notes often indicated that plaque was visible, the notes often failed to  specify any areas of build-up. Also, the level of decay was typically not included to support services such as fillings and crowns.
  • Failure to sign dental treatment notes. Rendering dentists have often failed to sign or initial each entry on the patient’s record pertaining to the treatment he or she rendered. Treating dentists and hygienists or assistants should sign or initial each entry on the patient’s record that pertains to a treatment he or she rendered.  This is often a state regulatory requirement and is typically required by both governmental and private payor agreements.
  • Missing dental treatment plans / consent forms. Completed dental treatment plans and consent forms have frequently been found to be missing from patient dental records. The dental treatment plans that were included were typically signed by the pediatric dental patient’s parent, but the signatures were often not dated. Signatures should be dated and these dates should correspond to the date listed as the date of authorization noted on the claim form. Many of the dates of authorization for the “signatures on file” on the claim form were after the date of service, which is an error cited in recent audits.
  • Failure to document reasons supporting the inhalation of nitrous oxide. Nitrous oxide is frequently utilized to ease pediatric dental anxiety. However, auditors have routinely found that the patient’s behavior was frequently recorded as cooperative or no details about the patient’s behavior were included that would justify the use of nitrous oxide. According to the AAPD, nitrous oxide may be appropriate for patients who have the following indications:
    • Are fearful, anxious, or obstreperous;
    • Have special health care needs;
    • Have a gag reflex that interferes with dental care;
    • Cannot utilize local anesthesia; or
    • Are undergoing a lengthy dental procedure.

Additionally, prior to administering nitrous oxide, informed consent should be obtained from the patient’s parent and documented in the patient’s record.   Also, be sure and properly document the nitrous oxide dosage, duration, and post-treatment oxygenation procedure.

  • Excessive number of treatments administered to a pediatric patient in a single visit. Medical dental claims with a high number of treatments are frequently identified in data mining runs for audit and will likely be subject to close scrutiny in an audit.  Dentists should include more detail regarding the level of decay present in each tooth to support the services provided.
  • Failure to properly credential each treating dentist with Medicaid. Are your dentists properly credentialed with Medicaid and other payors? The billing of dental procedures under another dentists number (typically due to the fact that the rendering dentists has yet to be credentialed) may constitute an overpayment or even fraud. We are seeing a huge rise in the number of enforcement cases based on this type of improper conduct.

VIII.  Conclusion:

Medicaid claims for dental services and procedures are under the regulatory microscope by federal and state enforcement agencies around the country.  Now more than ever, it is essential that you fully understand your obligations under the law with respect to medical necessity, signature, consent, documentation, coding and billing requirements when billing dental claims.

Is your mobile dentistry company being audited?  Start out on the right path when responding to a request for dental records and claims information – give us a call.  We can help.

Robert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law.  Liles Parker attorneys represent dentists and dental care practice around the country in connection with UPIC and state audits of Medicaid dental claims, private payor audits of dental claims and OIG / DOJ investigations.  Are you currently being audited or under investigation?  We can help.  For a free initial consultation regarding your situation, call Robert at:  1 (800) 475-1906.

[1] 22 Tex. Admin Code §108.40

[2] As set out under Tex. Admin Code §108.41(2), a “Portable Dental Unit” is defined as:

“[A]ny non-facility in which dental equipment, utilized in the practice of dentistry, is transported to and utilized on a temporary basis at an out-of-office location including, but not limited to, patients’ homes, schools, nursing homes, or other institutions.”

[3] As set out under Tex. Admin Code §108.41(1), a “Mobile Dental Facility” is defined as:

“[A]ny self-contained facility in which dentistry will be practiced which may be moved, towed, or transported from one location to another.”

[4] 22 Tex. Admin Code §108.40(a).

[5] 22 Tex. Admin Code §108.40(b)(1)-(6).

[6] A copy of the Texas Dental Practice Act can be found at:

[7] This point was most recently reiterated in the SBDE’s Self-Evaluation Report from September 2015State Board of Dental Examiners, Self-Evaluation Report, Sept. 2015.

[8] February 16, 2001 issue of the Texas Register (26 Tex. Reg. 1498),

[9] 22 Tex. Admin. Code §§108.40 – 108.43.

[10]  22 Tex. Admin. Code § 108.42.

[11]  22 Tex. Admin. Code § 108.43.

[12] 22 Tex. Admin Code §108.40(b).

EKRA: Laboratories, Treatment Homes and Clinical Treatment Centers Now Face Increased Enforcement and Penalties for Kickback Tainted Claims that are Reimbursed by Private Payors.


Eliminating Kickbacks in Recovery Act (EKRA)

(December 3, 2018): On October 24th, 2018, President Trump signed into law the “Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act.” This bi-partisan legislation is intended to address a number of the fraudulent and abusive business practices currently employed by unscrupulous substance abuse treatment providers in this segment of the market. This legislation effectively amplifies existing anti-kickback measures to better cover schemes involving private insurance. While the aim of widespread expansion of enforcement is to combat opioid and other substance abuse, the implications of many provisions are far reaching.  One particular provision with far reaching consequences is Subtitle J, also known as the “Eliminating Kickbacks in Recovery Act (EKRA).  This article examines SUPPORT and EKRA in more detail and discusses its impact on laboratories, treatment homes and clinical treatment centers.  It also reviews the broader impact of this legislation on providers that were not expressly specified in the Acts.

I. Background of the Problems Leading up to the Passage of the SUPPORT and EKRA Acts:

Despite the fact that progress has been made in recent years, our country is still grappling with an Opioid Epidemic. In 2017, 11.4 million Americans misused opioids.  It is estimated that 2.1 million of these individuals are addicted to opioids.[1] Approximately 42,249 Americans died of an opioid overdose with over a third of opioid overdoses being from commonly prescribed opioids. Understandably, both federal and state legislatures have repeatedly enacted measures aimed at curbing the illegal diversion of prescription opioids and the misuse of these drugs.  Adding insult to injury, the government has found that highly vulnerable, opioid addicted individuals are being taken advantage by unscrupulous health care providers and suppliers. Addiction and substance abuse treatment is big business. It has been estimated that addiction treatment industry alone is estimated to be worth $35 Billion.[2]  When you consider the fact that a 30-day substance abuse treatment regimen typically costs between $15,000 – $26,000, it is easy to see why the industry has attracted individuals that are willing to employ improper marketing and business schemes in order to maximize profits.  A number of these improper practices have resulted in health care fraud, waste, abuse and even the death of the patients under the care of these treatment centers.[3]  The passage of the SUPPORT and EKRA Acts are merely the latest steps taken by the government to prevent abusive business practices by laboratories, treatment homes and clinical treatment centers.

II. EKRA is Intended, in Part, to Curb Improper and Abusive Patient Brokering Practices by Opioid and Substance Abuse Treatment Providers:

Simply put, “Patient Brokering” occurs when an addiction or substance abuse treatment center or provider pays (or provides some other type of remuneration) to a third-party for referring, directing or otherwise channeling a patient to their treatment facility, center or clinic.  It is one of the primary improper business practices that has resulted in the abuse of patents suffering from opioid and substance abuse addiction. This type of scheme not only wastes money by rewarding the broker, but it also drives up costs and can result in underfunded, substandard care.  Notably, patient brokering does not just occur in connection with provider-patient residential treatment care.

A. Patient Brokering Involving Individuals Covered by Medicare or Medicaid.

Regardless of the provider type or treatment setting, when associated with care reimbursed by Medicare or Medicaid, improper patient brokering may constitute a violation under the Federal Anti-Kickback Statute.  As the Federal Anti-Kickback Statute provides under 42 U.S.C. § 1320a-7b(b):

“(1) Whoever knowingly and willfully solicits or receives any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind— 

(A) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program,[4] or

(B) in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program, shall be guilty of a felony and upon conviction thereof, shall be fined not more than $100,000 or imprisoned for not more than ten years, or both.  

(2) Whoever knowingly and willfully offers or pays any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such person

(A) to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or

(B) to purchase, lease, order, or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program, shall be guilty of a felony and upon conviction thereof, shall be fined not more than $100,000 or imprisoned for not more than ten years, or both.”  Emphasis Added.

As 42 U.S.C. § 1320a-7b(b) reflects, violations of the Anti-Kickback Statute involving Medicare, Medicaid and other Federal health care programs can result in a maximum penalty $100,000 and 10 years imprisonment.[5]  As discussed below, the potential penalties and period of imprisonment for kickback violations in connection with recovery home, clinical treatment facilities and laboratories claims submitted to private payors are considerably higher.

B. Patient Brokering Involving Individuals Covered by Private Payor Insurance.

Under the SUPPORT Act, kickback violations committed in connection with private payor claims are a criminal violation under EKRA. As the title suggests, this legislation addresses patient brokering and other kickback schemes by expanding liability and raising the maximum penalties for kickbacks. An offense under this provision is described as;

“(a) Offense — Except as provided in subsection (b), whoever, with respect to services covered by a health care benefit program, in or affecting interstate or foreign commerce, knowingly and willfully—

(1) solicits or receives any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind, in return for referring a patient or patronage to a recovery home, clinical treatment facility, or laboratory; or

(2) pays or offers any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind—

(A) to induce a referral of an individual to a recovery home, clinical treatment facility, or laboratory; or

(B) in exchange for an individual using the services of that recovery home, clinical treatment facility, or laboratory…” Emphasis Added.

Under EKRA, the maximum penalties for illegal remunerations paid by recovery homes, clinical treatment facilities, or laboratories in an effort to induce referrals can result in penalties of $200,000 and 10 years of imprisonment per occurrence.[6] In enacting EKRA, the government’s clear intention is to take more aggressive action against patient brokering in the context of the opioid crisis and will likely have far reaching and possibly unintended implications.

V. Laboratory-Related Violations of EKRA:

EKRA specifically targets recovery homes, clinical treatment facilities, and laboratories that participate in illegal remuneration schemes. The definition of each is significant to the applicability of this provision:

Recovery Home: “A shared living environment that is, or purports to be, free from alcohol and illicit drug use and centered on peer support and connection to services that promote sustained recovery from substance use disorders.”

Clinical Treatment Facility: “A medical setting, other than a hospital, that provides detoxification, risk reduction, outpatient treatment and care, residential treatment, or rehabilitation for substance use, pursuant to licensure or certification under State law.”

Both of these definitions make sense in the context of this bill’s intentions. However, the definition of laboratory is not included, but rather cites the definition of a laboratory laid out in 42 U.S.C. § 263a(a):

Laboratory: “As used in this section, the term “laboratory” or “clinical laboratory” means a facility for the biological, microbiological, serological, chemical, immuno-hematological, hematological, biophysical, cytological, pathological, or other examination of materials derived from the human body for the purpose of providing information for the diagnosis, prevention, or treatment of any disease or impairment of, or the assessment of the health of, human beings.”           

Unlike the definitions of the terms “recovery home” and “clinical treatment facility,” the definition of “laboratory” is not confined to the provision to opioid or substance-use related matters. As a result, all health care providers, not merely recovery homes and clinical treatment facilities, who utilization or laboratory services need to ensure that their business relationships with laboratories do not violate EKRA.  As one study found, 29% of outpatient encounters typically result in the performance or ordering of laboratory tests.[7]  Several outpatient specialty areas that are likely to receive considerable scrutiny include:

Pain Management Physicians and Clinics: Pain management physicians, nurse practitioners (NPs) and physician assistants (PAs) heavily rely on laboratory testing in their management of pain patients.  Notably, a number of professional organizations, including the Centers for Disease Control and Prevention (CDC) have issued written recommendations on the use of urine drug tests and other laboratory tests that should be used to monitor a patient’s compliance.  Such tests also serve to identify potential instances of pain medications.

Endocrinology Physicians and Clinics:  Endocrinologists are often involved in determining the diagnosis and treatment of a patient’s endocrinological problem.  This may involve the measurement of various hormones in a patient’s body, a determination of whether a patient’s endocrine glands are properly working, or an assessment of other of hormonal-related conditions.  Understandably, in the course of their work, endocrinologists rely heavily on diagnostic laboratory tests.  Some examples of these tests include: (1) ACTH Stimulation Tests, (2) 24-Hour Urine Collection Tests, (3) CRH Stimulation Tests, (4) Oral Glucose Tolerance Tests, and (5) TSH Blood Tests.

Allergists / Immunologists and Associated Clinics:  Allergists / Immunologists manage both pediatric and adult patients with a variety of medical problems.  These include, but are limited to diseases of the respiratory tract, allergic diseases of the eye and skin, adverse reactions to foods and other agents, and diseases of the immune system.  There are often extensive laboratory tests ordered in connection with these medical conditions.

VI. Non-Laboratory Related Violations of EKRA:

ALL health care providers (not merely recovery homes and clinical treatment facilities) must exercise great care before entering into a business relationship, regardless of whether the care provided is covered by Medicare, Medicaid or a private payor.  It is important to keep in mind that improper business relationships (in this case, kickbacks), can take many forms. The following business relationships may be a violation of the Federal Anti-Kickback Statute (when dealing Federal health care programs) or EKRA (when dealing with private payors):

  • Entering into a business relationship with a marketing company whose job it is to steer or direct patients to a recovery home or clinical treatment center. In recent years, a number of improper relationships have been identified in connection with online marketing companies. Does the business relationship you are contemplating qualify for coverage under a Safe Harbor?
  • A continuing concern of the government involves lease arrangements with actual or potential referral sources.
  • Serving as a medical director to a laboratory to whom a provider makes patient referrals.
  • Serving as a consultant to a recovery home or clinical treatment center to whom the health care provider refers patients.
  • While old school dine and dash approaches may be gone, bringing lunch and other goodies to a practice or office is still both commonplace and potentially problematic.
  • Participating in a sham arrangement where the provider receives a loan, research grant, speaking fees, etc. from a recovery home or clinical treatment center to whom the provider makes referrals.
  • Acquiring or having a financial interest in a recovery home or clinical treatment center (or a related entity) to whom a health care provider sends referrals.
  • Accepting or soliciting any type of remuneration (something of value), such as a gift card, sporting event tickets or liquor, from representatives of a recovery home or clinical treatment center to whom the health care provider sends business.

Robert W. Liles - Healthcare LawyerRobert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law.  Liles Parker attorneys represent health care providers and suppliers around the country in connection with UPIC audits, ZPIC audits, OIG audits and DOJ investigations.  He also advises health care providers in connection with the Federal Anti-Kickback Statute and EKRA.  Are you currently being audited or under investigation?  We can help.  For a free initial consultation regarding your situation, call Robert at: 1 (800) 475-1906.





[4] Under 42 USC § 1320a-7b(f), the term “Federal health care program” is defined as:

(1) any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government (other than the health insurance program under Chapter 89 of Title 5); or

(2) any State health care program, as defined in section 1320a-7(h) of this title.

[5] This penalty is not even a year old, as it was updated from a maximum penalty of $25,000 and 5 years of imprisonment via Section 50412 of the Bipartisan Budget Act of 2018.



Home Health Providers Under the Microscope — The Review Choice Demonstration Project is Here

October 4, 2018 by  
Filed under Home Health & Hospice

(October 4, 2018):  Last week, the Centers for Medicare & Medicaid Services (CMS), confirmed that it intends to initiate the Review Choice Demonstration for Home Health Services project on December 10, 2018.  The Review Choice Demonstration project is slated to initially begin in Illinois. This initiative is the renamed, repackaged version of the prior Pre-Claim Review Demonstration project that was initiated, then placed on hold (due in large part to provider protests), in April 2017.  This article provides an overview of the long and sorted history leading up to the Review Choice Demonstration project.

I. Although Dropping, the Improper Payment Rates for Home Health Services Remain Excessive:

The last few years have been rough on home health providers.  As the government has been quick to note, one of the primary components of the Medicare Fee-for-Service (FFS) improper payment rate has consistently been the excessive level of improper payments made for home health services.  Broken down by fiscal year, the improper payment rates for home health services have included:

Fiscal Year

Report Period

Home Health Improper Payment Rate

FY 2014

July 1, 2012 – June 30, 2013


FY 2015

July 1, 2013 – June 30, 2014


FY 2016

July 1, 2014 – June 30, 2015


FY 2017

July 1, 2015 – June 30, 2016


Although the improper payment rate for home health services has dropped considerably from FY 2015 to FY 2017, it still constitutes a major portion of the overall Medicare FFS improper payment rate.  During the FY 2017 report period, it is estimated that more than $6.1 billion in improper payments was made by Medicare for home health services.  When reviewing the improperly paid claim lines associated with FY 2017, the Comprehensive Error Rate Testing (CERT) contractor tasked with this project found that more than 89% of the errors were due to documentation deficiencies. 

II. Overview of Corrective Actions and Initiatives Taken by CMS to Address Home Health Documentation Deficiencies:

The FY 2017 CERT contractor findings with respect to documentation have merely further strengthened the government’s long-standing belief that home health providers (and referring physicians), need ongoing education and guidance with respect to the medical necessity, documentation, coverage and payment requirements that must be met.  Over the last few years, CMS and its contractors have implemented a variety of corrective actions intended to address documentation and medical necessity deficiencies that have been identified in connection with Medicare home health claims. Examples of these actions have included Probe and Educate Reviews[1], the initiation of the Pre-Claim Review Project[2], the development of Home Health Plan of Care / Certification and Progress Note Clinical Templates[3], and the establishment of a Home Health Recovery Audit Contractor[4].  CMS also revised the Physician Face-to-Face Narrative Requirement[5] for home health services. Several of these corrective initiatives are discussed in more detail below:

A. Probe and Educate Reviews.

In late 2015, home health Medicare Administrative Contractors (MACs) began pulling five claims sample from each home health agency in their jurisdiction for prepayment review purposes.  The claims subject to review covered episodes of service beginning on or after August 1, 2015.  The purpose of the Probe and Educate Review initiative was to better ensure that home health agencies were fully complying with applicable medical necessity, documentation, certification, coverage and payment requirements.[6] Systemic problems identified by home health MACs through the Probe and Education Review process has included:

  1. Failure to comply with face-to-face requirements. For example, in some cases, the certifying physician signature was missing. In other cases, the encounter notes did not document the elements required to show that the patient was eligible for home health services.
  2. Failure to identify an estimate of time for continued need when recertifying the medical necessity of services.
  3. Failure to fully complete and / or properly complete the initial certification documentation required.
  4. Bailure to timely respond to an Additional Documentation Request (ADR) request from a Medicare contractor in a timely fashion.

B. Pre-Claim Review Demonstration Project.

Section 402(a)(1)(J) of the Social Security Amendments of 1967 authorizes the Secretary, HHS, to:

‘‘develop or demonstrate improved methods for the investigation and prosecution of fraud in the provision of care or services under the health programs established by the Social Security Act (the Act).’’

Using this authority, and inn consideration of the excessively high home improper payment rate for home health services, in June 2016, CMS announced[7] the initiation of a new Pre-claim Review Demonstration project. Theoretically, the demonstration project was not intended to create any new clinical home health documentation requirements. Home health agencies covered by the demonstration project would be required to submit supportive medical documentation to the CMS contractor for review prior to being paid. This approach was intended to help educate providers and better ensure that home health claims qualified for coverage and payment. The demonstration project was also intended to test whether the use of a pre-claim review process would improve the government’s ability to identify, investigate, and prosecute home health fraud. Originally, the demonstration project was scheduled to be put into place in five states. CMS and its contractors planned on rolling out the project over a six-month period: 

  • Illinois: August 1, 2016
  • Florida: October 1, 2016
  • Texas: December 1, 2016
  • Michigan and Massachusetts: January 1, 2017

Two months later, CMS took its first steps towards putting the planned three-year project into place by implementing it in Illinois.  To characterize the implementation as “problematic” would be generous.  From its very start, Illinois home health providers, both large and small, experienced significant problems meeting the reviewer’s documentation requirements, thereby resulting in significant provider payment delays. Bending under political pressure, the planned roll-out in Florida was placed on hold. This effectively delayed implementation in the remaining three states as well.  After several false starts, the initiative was ultimately placed on hold in March 2017.  For a more detailed discussion of the Pre-Claim Demonstration project, please see the following article.  Additional information may also be found here.

C. Home Health Plan of Care / Certification and Progress Note Clinical Templates:

As required under 42 CFR 484.60, Condition of participation: Care planning, coordination of services, and quality of care, Medicare patients are accepted for treatment on the reasonable expectation that a home health agency can meet the patient’s medical, nursing, rehabilitative, and social needs in his or her place of residence. In order to accomplish this:

“Each patient must receive an individualized written plan of care, including any revisions or additions. The individualized plan of care must specify the care and services necessary to meet the patient-specific needs as identified in the comprehensive assessment, including identification of the responsible discipline(s), and the measurable outcomes that the HHA anticipates will occur as a result of implementing and coordinating the plan of care. The individualized plan of care must also specify the patient and caregiver education and training. Services must be furnished in accordance with accepted standards of practice.”

Similarly, 42 CFR 424.22, Requirements for home health services, mandates that a physician certify and recertify a patient’s eligibility for home health services in order to qualify for coverage and payment by Medicare.  Additional certification and recertification requirements are set out under the regulations.

Finally, CMS develop a template Progress Note that could be used by a physician and, when permitted under state law, by a physician assistant, a nurse practitioner, a clinical nurse specialist  and / or a certified nurse midwife to document that home health services are medically necessary and appropriate and to confirm that a Medicare patient is, in fact, homebound.

III. Rise of the Review Choice Demonstration Project:

In consideration of the various challenges encountered when trying to roll-out the Pre-Claim Review Demonstration project, CMS ultimately placed the initiative on hold in April 2017.  It is important to keep in mind that the underlying problem that gave rise to the Pre-Claim Review Demonstration project – an excessively high improper payment rate associated with home health services – was still (and continues to be) a serious program integrity concern. Additionally, it was abundantly apparent that wholesale changes would need to be made if the initiative were to be reintroduced. 

Over the next year, CMS completely reworked its prior initiative in an effort to provide additional flexibility for home health agencies that may be covered by an updated version of the project.   As reflected in the Federal Register, the “new and improved” initiative was named the Review Choice Demonstration project. As with its earlier iteration, the revised version of the demonstration project is intended to:

“help assist in developing improved procedures for the identification, investigation, and prosecution of potential Medicare fraud. The demonstration would help make sure that payments for home health services are appropriate through either pre-claim or postpayment review, thereby working towards the prevention and identification of potential fraud, waste, and abuse; the protection of Medicare Trust Funds from improper payments; and the reduction of Medicare appeals.”

CMS has again proposed that the demonstration project will be implemented in five states. Much to the dismay of Illinois, Florida and Texas home health providers, they are STILL on the list of targeted states.  Michigan and Massachusetts are no longer slated to be part of the demonstration.  In their place, CMS has substituted Ohio and North Carolina.  CMS has stated that the new list of five states are:

“known areas of fraudulent behavior and had either a high home health improper payment rate or a high denial rate during the home health Probe and Educate reviews.”

Notably, CMS has indicated that there is the possibility that the Review Choice Demonstration project may later be expanded to other states in the Palmetto / JM jurisdiction.

As set out in the September 28th Federal Register notice, CMS intended to implement the Review Choice Demonstration project in Illinois on December 10, 2018. 

A. The Review Choice Demonstration Project is Intended to Offer Flexibility to Home Health Providers.

CMS has designed the Review Choice Demonstration project so that home health agencies in affected states have several ways that they may show their “compliance with CMS’ home health policies.”  Options available to home health providers include[8]:


Robert W. Liles defends health care providers in Medicare auditsRobert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law.  Liles Parker attorneys represent health care providers and suppliers around the country in connection with UPIC audits, ZPIC audits, OIG audits and DOJ investigations.  Are your transcranial magnetic stimulation claims being audited?  We can help.  For a free initial consultation regarding your situation, call Robert at:  1 (800) 475-1906.







[6] Additional information regarding the Probe and Educate process is outlined in MLN Matters, MLN Matters ® Number:SE1524.

[7] 81 Fed. Reg. 37598.  June 8, 2016.

[8] 83 Fed. Reg. 48818September 27, 2018.

Transcranial Magnetic Stimulation Claims Audits by Medicare MACs and UPICs are Underway. Are Your CPT 90868 Claims Compliant?

(July 16, 2018):  Do you provide Transcranial Magnetic Stimulation care and treatment services?  If so, you need to ensure that your medical necessity, documentation, coding and billing practices fully comply with applicable statutory, regulatory and administrative guidelines. In recent weeks, a flurry of prepayment review letters from Medicare Administrative Contractors (MACs) have been sent to physicians and health care entities seeking copies of the medical records and related documentation associated with transcranial magnetic stimulation services (also commonly referred to as TMS services).  Billed as CPT 90868, transcranial magnetic stimulation services are merely the latest risk area being examined by MACs and the associated Uniform Program Integrity Contractor (UPIC) assigned to a specific jurisdiction of the country.


I.  Why Are My Transcranial Stimulation Services Being Audited?

If you received notice of a prepayment or audit of your claims from a MAC or UPIC contractor working for the Centers for Medicare and Medicaid Services, you may have contacted the contractor to find out why your claims were selected for audit.  Although the CMS contractor may have advised you that your claims were “randomly” chosen for audit, nothing could be further from the truth.  At this time, CMS has not authorized its contractors to conduct random audits of provider claims.  As set out in the Federal Register:

“Although section 934 of the MMA sets forth requirements for random prepayment review, our contractors currently do not perform random prepayment review. However, our contractors do perform non-random prepayment complex medical review. We are cognizant of the need for additional rulemaking should we wish our contractors to perform random review.”[1]

If your claims were not audited as a result of a random review, then why were your claims selected for prepayment or postpayment review?  As set out in the Medicare Program Integrity Manual, Chapter 2, Section 2.4, Subsections A-C,  CMS processing and program integrity contractors have been directed to utilize data analyses as their primary tool to identify outliers and other providers that may be engaging in improper, fraudulent, wasteful and / or abusive coding and billing practices.  UPICs and other program integrity contractors have more than a dozen various utilization, coding and billing databases at their disposal in this regard.  Simply put, your claims were likely chosen for prepayment review because of a specific concern with respect to a type of service or because your utilization of one or more claims differed from that of your peers.

II. Overview of Transcranial Magnetic Stimulation Services:

Transcranial magnetic stimulation involves the noninvasive use of magnetic pulses to stimulate the brain. This treatment protocol involves the positioning of an electromagnetic coil on a patient’s scalp.  Once properly placed, an electric current is intermittently run through the electromagnetic coil, thereby producing brief magnetic pulses that painlessly pass through a patient’s brain. Transcranial magnetic stimulation services are normally conducted in an outpatient setting and do not require anesthesia or analgesia.  Although a number of proponents have consistently pressured Medicare to expand its current scope of coverage, at this time, only adults who have a confirmed diagnosis of Major Depressive Disorder, and meet a number of other requirements, qualify for transcranial magnetic stimulation under Medicare’s strict medical necessity requirements.

III.  Transcranial Magnetic Stimulation Claims Audits:

  • MAC prepayment targeting of transcranial magnetic stimulation claims.

Among its many functions, National Government Services (NGS) and other MACs around the country are required to conduct medical reviews of provider claims on a prepayment basis, to better ensure compliance with Medicare’s coverage and payment rules.[2]  The fact that NGS and other MACs are currently auditing transcranial magnetic stimulation (CPT Code 90868) claims, is significant because MACs are only required to initiate targeted provider-specific prepayment reviews “when there is the likelihood of a sustained or high level of improper payments.”[3]  It is also worth noting that providers are being directed to submit their supporting documentation directly to the Uniform Program Integrity Contractor (UPIC) assigned to their jurisdiction.

  •  UPIC reviews of transcranial magnetic stimulation claims.

UPICs are private, for-profit companies that awarded contracts to provide program integrity services for the Centers for Medicare and Medicaid Services (CMS).  UPICs are tasked with investigating instances of suspected fraud, waste, and abuse in the Medicare and Medicaid programs. Should the UPIC identify possible overpayments, the results of their audits will be sent back to the MAC for recoupment action. However, if evidence of possible fraud is identified, a UPIC may forward their findings to law enforcement for review, investigation and possible prosecution.[4]

IV.  Transcranial Magnetic Stimulation Audit Risk Issues (Partial Listing):

If you are providing transcranial stimulation services and billing them to Medicare, you need to keep in mind that the failure to meet the following requirements can quickly lead to an audit of your CPT Code 90868 claims:

  • Is the transcranial magnetic stimulation device approved by the Food and Drug Administration (FDA)?  In most instances, if a treatment device has not been approved by the FDA, CMS and its contractors will consider the device to be “experimental.”  As such, any transcranial magnetic stimulation treatment services performed will not be covered by Medicare.
  • Does the patient have a “confirmed” diagnosis of major depressive disorder?   For Medicare, this is a deal-breaker. Although a number of studies have been conducted examining the use of this treatment modality in connection with other diagnoses, none of these additional diagnoses are currently covered and will be considered “experimental” by CMS and its contractors.  A few examples of diagnoses that will be denied include schizophrenia, schizoaffective disorder epilepsy, cerebrovascular disease, and dementia.  Finally, it is important to keep in mind that UPIC auditors will be examining each case carefully to ensure that the diagnosis of major depressive disorder has been fully documented and validated (or otherwise confirmed).  UPIC auditors will be looking for assessments of the patient’s condition using standardized rating scales (such as the Beck Depression Scale or the Montgomery-Asberg Depression Rating Scale) that have been found to reliably measure the intensity of a patient’s depressive symptoms.  Merely concluding that a patient suffers from major depressive disorder without the test results to support your diagnosis is insufficient to support medical necessity.  Finally, under the LCD guidance issued by NGA, once transcranial magnetic stimulation treatment has been initiated, the provider is required to monitor the patient’s treatment response using the standardized rating scales discussed above (or a similar, widely accepted rating scale).
  • Transcranial magnetic stimulation treatment sessions must be ordered and supervised by a qualified individual. As LCD L33398 reflects, in order for transcranial magnetic stimulation therapy to be ordered (or reordered), the ordering physician must issue the order in writing.  Moreover, the ordering physician must have examined the patient, reviewed the record AND must have experience in administering transcranial magnetic stimulation therapy services.  As a final point, the treatment must be given under the direct supervision of the ordering physician.  In other words, the physician must be in the area and be immediately available.
  • Does your practice also bill for CPT Code 90836 claims? We have seen a higher likelihood of audit if you are also billing CPT Code 90836[4] claims along with your billing of transcranial magnetic stimulation services (CPT Code 90868). It is important to keep in mind that the billing of this “add-on” code may trigger an audit even in the absence of CPT Code 908686 billings. For example, in a September 2016 Medicaid case brought under Connecticut’s False Claims Act, it was alleged that the defendant was billing this “add-on” code for psychotherapy sessions when in fact, she instead provided medication management services, or a brief meeting with the patient for drug change/dosage adjustment.
  • Does your practice also bill for CPT Code 99214 claims? Audits of transcranial magnetic stimulation claims have also sometimes included a concurrent review of the provider’s CPT Code 99214[6] claims.  Since at least 2012 the Department of Health and Human Services (HHS), Office of Inspector General (OIG) has expressed its concerns with respect to the unsupported, improper billing of this Evaluation and Management (E/M) code.

V.  When Are Transcranial Magnetic Stimulation Services Covered by Medicare?

  • “Indications” — a confirmed diagnosis of Major Depressive Disorder is required for coverage.

Medicare has adopted strict requirements on the coverage and payment of transcranial magnetic services.  As set out in the Local Coverage Determination[7] (LCD) guidance published by NGS (LCD L33398)[8], transcranial magnetic stimulation services are only considered medically necessary “in adults who have a confirmed diagnosis of major depressive disorder (MDD), single or recurrent episode.”  Additionally, in order for the care to qualify for coverage and payment, the record must show:

In addition to having a diagnosis of "Major Depressive Disorder," one of these four conditions must be fully documented in the patient's medical records.

In addition to having a diagnosis of “Major Depressive Disorder,” one of the above four conditions must be fully documented in the patient’s medical records.

These requirements must be met in order to qualify for coverage under the “Limitations” section of LCD L33398.

  • Limitations to be considered.

As discussed in LCD L33398, providers must carefully assess the benefits to be derived from the use of transcranial magnetic stimulation. The benefits of TMS use must be carefully considered against the risk of potential side effect in patients with any of the following:

  • Transcranial magnetic stimulation is NOT considered reasonable and necessary in any of the following situations.

  • Documentation requirements.

UPIC Audits of Transcranial Magnetic Stimulation claims (also referred to as TMS claims) are ongoing.

UPIC audits are focusing on your compliance with the LCD’s documentation requirements. Are your Transcranial Magnetic Stimulation services fully documented?

  • Utilization guidelines.

VI.  How Can You Reduce Your Level of Regulatory Risk?

As discussed above, if your transcranial magnetic stimulation claims are targeted by a UPIC, the OIG or DOJ, the types of enforcement actions that can be pursued vary widely, depending the facts in your particular case. Unfortunately, since data mining is one of the primary ways that a potential target is identified for review, the first time that you know find out that your claims utilization practices are being assessed could be when you receive notice that your practice has been placed on prepayment review.  In more serious cases, you may receive a OIG subpoena for records or a Civil Investigative Demand for records from the DOJ.

As a first step, if you have not already done so, you need to develop and implement an effective Compliance Program.  Assuming that you already have such a program in place, take the time now, before you have a problem, to assess your care and treatment practices.  Does your documentation meet applicable requirements?  Have you documented that the care and treatment decisions made were medically necessary and appropriate?  Were the services properly coded and billed?

VII.  Responding to an Audit of Your Transcranial Magnetic Stimulation Claims:

  • Learning of a prepayment or postpayment audit.

If your practice is placed on prepayment review, you will likely learn of the action through the electronic claims status system maintained by your MAC.  Providers are normally given 45 days to submit the requested supporting documentation to their UPIC.  Should you fail to submit the requested documentation to the UPIC in a timely fashion, the very least that will happen is that your claims will be denied.  As set out under the Section 1815(a) of the Social Security Act:

“…no such payments shall be made to any provider unless it has furnished such information as the Secretary may request in order to determine the amounts due such provider under this part for the period with respect to which the amounts are being paid or any prior period.”

  • Don’t turn an administrative audit into a civil or criminal case.

In cases where a provider repeatedly ignores a request for records (or fails to submit the supporting documentation within the allotted time period), a UPIC will likely make a referral to the OIG for investigation and review.  Unfortunately, such a referral significantly raises the level of risk that a provider may face.  Depending on the OIG’s findings, a provider may be assessed Civil Monetary Penalties or even be excluded[9] from participation in Federal and State health benefits programs.  Additionally, if evidence of fraud or other improper conduct is identified, the case may be referred to the DOJ for civil action and / or criminal prosecution.

Moreover, once a problem has been discovered, a physician can significantly complicate matters by concealing the problem, destroying evidence or falsifying records.  Under various Federal obstruction statutes, a physician may be charged with obstruction of justice for willfully engaging in activities that obstruct, mislead, deceive, or impede a health care fraud investigation.

  • Engage qualified, experienced health law counsel.

Unfortunately, the days when a practice could feel comfortable directly handling a medium to large-sized audit, without assistance from legal counsel are becoming fewer and fewer each year.  There are a number of strategies that legal counsel may employ in an effort to minimize a physician’s possible exposure and liability.  Call an experienced health lawyer and ask him or her to walk you through the process. If the attorney hasn’t handled these cases on a regular and repeated basis, talk to another firm.

Robert W. Liles defends health care providers in Medicare audits

Robert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law.  Liles Parker attorneys represent health care providers and suppliers around the country in connection with UPIC audits, ZPIC audits, OIG audits and DOJ investigations.  Are your transcranial magnetic stimulation claims being audited?  We can help.  For a free initial consultation regarding your situation, call Robert at:  1 (800) 475-1906.




[1] For additional information on how your claims may have been targeted for audit, please see the following related article, please see Physicians Being Placed on Non-Random Prepayment Review in Unprecedented Numbers. Are You Ready for an Audit?

[2] Medicare Program Integrity Manual, Chapter 3 – Verifying Potential Errors and Taking Corrective Actions. Section 3.4 Prepayment Review of Claims.

[3] See MPIM Section 3.4.A.

[4] Referrals to law enforcement are typically made to the Department of Health and Human Services, Office of Inspector General (OIG) and / or the U.S. Department of Justice (DOJ).

[5] CPT Code 90836 is an add-on code for individual psychotherapy, insight oriented, behavior modifying and/or supportive, 45 minutes with the patient and/or family member (time range 38-52 minutes) when performed with an evaluation and management service.

[6] This Evaluation and Management (E/M) code is used when billing for an “office or other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: a detailed history, a detailed examination and medical decision making of moderate complexity.”

[7] As set out in Medicare’s program integrity guidance, “An LCD is a decision by a Medicare administrative contractor (MAC) whether to cover a particular item or service on a MAC-wide basis in accordance with Section 1862(a)(1)(A) of the Social Security Act (i.e., a determination as to whether the item or service is reasonable and necessary).”  See MPIM 13.1.3. an issuance published by a MAC setting out coverage parameters for a particular service.  The LCD only applies to providers in states included in the MAC’s jurisdiction.  Having said that, if a particular jurisdiction does not have an LCD addressing a certain service, LCD guidance published by other MACs is often cited as persuasive (but not binding) authority.  The requirements set out in an LCD must be consistent with all applicable laws, regulations, and national policies for coverage, payment, and coding.  LCDs may address a specific clinical topic using procedure codes to define one or more treatments and using diagnostic codes to describe the clinical indications that would make the treatment(s) reasonable and Social Security Act § 1862(a)(1)(A), 42 U.S.C. § 1395y(a)(1)(A). necessary. For example, an LCD may limit coverage of an item or service to specific diagnoses, or it may prohibit coverage of an item or service completely. The coverage policy created by an LCD is applicable only in States within a contractor’s jurisdiction.

[8] NGS’s LCD guidance for Transcranial Magnetic Stimulation services is covered in LCD L33398.  This guidance applies to all services performed on or after June 15, 2018.

[9] For instance, under 42 USC §1320a-7(b)(6), an individual or entity can be excluded for a minimum of a year if found have submitted claims for excessive charges, unnecessary services or services which fail to meet professionally recognized standards of care.

Is Your Urogynecology, OB/GYN or Multidisciplinary Practice Prepared for a Medicare Biofeedback Claims Audit or a Pelvic Floor Therapy Claims Audit?

Medicare Audits of CPT Code 90911, Pelvic Floor Therapy Claims are Increasing!(July 12, 2018):  While no medical specialty has completely avoided the scrutiny of law enforcement and government contractors, for the most part, OB/GYNs and Urogynecologists have managed to stay out of the limelight of auditors and investigators tasked with identifying improper billing practices.  Unfortunately, those days appear to be over. Working closely with the staff at the Consolidated Data Analysis Center (CDAC), auditors and investigators at the Department of Health and Human Services (HHS), Office of Inspector General (OIG), have conducted sophisticated data analyses to identify outliers whose billing practices may be an indication of improper billing or fraud.  In recent years, CDAC-supported analyses have led to the successful pursuit of several high-profile Medicare fraud cases against urogynecologist providers and practices for the wrongful billing of biofeedback[1] related claims.  Most recently, the OIG confirmed at the March 2018 Health Care Compliance Association Annual Meeting that biofeedback / pelvic floor therapy claims are currently under review and are an agency enforcement initiative. This article examines the cases that have been brought against providers for the improper billing / fraudulent submission of biofeedback claims for payment, along with steps that your practice should take if your claims are subjected to an audit.

I.  Overview of Biofeedback Therapy:

At the outset, it is important to recognize that the coverage of biofeedback therapy services varies from payor to payor.  Many payors have limited the coverage of biofeedback therapy services to specific conditions and diagnoses.[2]  Generally speaking, biofeedback qualifies for coverage and payment by Medicare when it is used to treat stress and urge incontinence in cognitively intact patients, AS LONG AS the medical documentation shows that “pelvic muscle exercise” training has been attempted and has failed.

Two procedural codes (CPT Code 90901 and CPT Code 90911), are primarily used to code for biofeedback therapy. CPT Code 90901 is a non-specific code that can be used for any modality of biofeedback therapy.  In contrast, CPT Code 90911 is used to bill for Pelvic Floor Therapy training for the treatment of incontinence.

II.  Overview of Pelvic Floor Therapy Training for Urinary Incontinence:

As discussed above, Medicare will only cover biofeedback for the treatment of urinary incontinence when the medical records document that a trial of pelvic muscle exercise training was previously tried and failed.[3]  The Centers for Medicare and Medicaid Services (CMS) has issued National Coverage Determination (NCD) guidance titled “Biofeedback Therapy for the Treatment of Urinary Incontinence (30.1.1).[4]As the guidance notes, biofeedback-assisted pelvic muscle exercise training incorporates the use of an electronic or mechanical device to convey feedback (visual and / or auditory) regarding the muscle tone of a patient’s pelvic floor.  This feedback assists patients with their performance of muscle tone and pelvic muscle exercises.  Notably, CMS has delegated the authority to decide whether or not to cover biofeedback as an initial treatment modality to its contractors.

III.  Recent Pelvic Floor Therapy Claims Enforcement Cases:

  • On July 2, 2018, a Florida-based network of urogynecology practitioners agreed to pay the government $7 million to resolve allegations that network physicians violated the False Claims Act by knowingly billing the Medicare program for services that were inflated or were not provided. More specifically, the government alleged that network physicians performed and improperly billed for lavage treatments and pelvic floor therapy services that were incorrectly appended with a Modifier -25.  A Modifier -25 is intended to reflect the fact that a significant, separately identifiable E/M services was provided by the same physician on the same day as the other procedure at issue (in this case, the lavage and / or pelvic floor therapy services).
  • In June 2018, a California urogynecology practice and its Board-Certified physician entered into a $419,578 settlement agreement with the OIG. The settlement resolves allegations that the physician submitted claims to Medicare for items or services that he “knew or should have known were not provided as claimed or were false or fraudulent.”
  • In February 2018, the Department of Health and Human Services (HHS), Office of Inspector General (OIG) announced an $877,474 settlement with an Arizona practice accused of submitting false and fraudulent pelvic floor therapy claims to the Medicare program for payment.
  • In December 2017, a Virginia-based urogynecology clinic and its Board-Certified physician owner, settled a case with the OIG for $4 million in Civil Monetary Penalties. The OIG also required that the clinic enter into a 3-year Corporate Integrity Agreement which requires that the practice fully comply with a comprehensive set of compliance and regulatory requirements in order to avoid exclusion from the Medicare program.
  • In November 2016, a New Jersey OB/GYN agreed to be excluded from participating in Federal health benefits programs for 20 years as part of his settlement with government. The OB/GYN was also required to pay $25 million to settle False Claims Act allegations.  It was alleged that the OB/GYN submitted thousands of claims for pelvic floor therapy training services to the Medicare and Medicaid programs that were either never provided, or were otherwise false or fraudulent.

IV.  Steps to Take Before Your Practice is Audited:

When is the last time you conducted an internal audit of the medical necessity of your claims, the completeness of your documentation and / or the accuracy of your coding and billing practices?  What did you find?

A well-designed Compliance Program can benefit Urogynecology and OB/GYN practices by speeding up and optimizing the proper payment of claims, minimizing billing mistakes, and reducing the chances that an audit will be conducted by law enforcement or one of the many private contractors now working for CMS. The following seven elements that should be addressed in your Compliance Program include:

  1. Implementing written policies, procedures and standards of conduct;

  2. Compliance program administration;

  3. Screening and evaluation of employees, physicians, etc.;

  4. Communication, education and training on compliance;

  5. Monitoring, auditing and internal reporting systems;

  6. Enforcing standards through well-publicized disciplinary guidelines;

  7. Responding promptly to detected offenses and undertaking corrective action;

Urogynecology and OB/GYN practices should also conduct an organization-specific review in order to identify and address any regulatory risks that may be present.  This baseline audit (also commonly referred to as a “GAP Analysis”) can be utilized to identify problems in need of correction and any potential risk areas that should be incorporated into your Compliance Program. As you review your documentation, try and imagine how it would appear to an outside reviewer.  Can a reviewer fully appreciate the patient’s clinical status and the medical necessity of any biofeedback-related therapy services that you have provided?  Compare your E/M services to the 1995 or 1997 E/M Guidelines – have you fully and completely documented the services at issue?

To be clear, both law enforcement and CMS contractors recognize that a provider’s care and treatment practices may differ in one aspect or another from those of their peers. Moreover, those differences can result in billing practices which might make a provider appear to be an “outlier.”  Just because a provider’s coding and billing practices differ from those of their peers (in the same specialty area), does not necessarily mean that the provider’s practices are improper.  Nevertheless, if your utilization or coding / billing practices result in your clinic being identified as outlier, there is higher likelihood that your claims will be audited.

Be sure and engage any outside reviewers through legal counsel.  Keep in mind, this is not a paper exercise.  If legal counsel is not fully engaged and is not supervising the work, it is doubtful that the result of any review will be privileged.  As a final point in this regard, keep in mind that any overpayments identified must be paid back, regardless of whether the results of the internal audit qualify as privileged.

V.  What Are the Risks You Face if Your Biofeedback / Pelvic Floor Therapy Claims are Audited?

Despite any assertions that a Medicare auditor may state to the contrary — there is no such thing as a “Routine Audit.”[5]   

You never realize how bad your documentation is until your urogynecology or OB/GYN claims are audited. Unfortunately, a physician’s documentation practices often become more relaxed as time goes on – especially when the physician’s claims have not been audited for an extended period of time.  In such situations, both physicians and their staff may fail to fully document the services provided. Specific risk issues identified in recent cases brought by the OIG and, in some cases, the Department of Justice (DOJ) against urogynecology, OB/GYN, and multidisciplinary practices providing biofeedback-related pelvic floor therapy training services include:

  • Upcoding involving the inappropriate appending of Modifier -25 to a claim payment for a medically unnecessary E/M services  Urogynecologists, OB/GYNs and multidisciplinary physicians should exercise caution when utilizing Modifier -25.  It is important to remember that Modifier -25 has a long and controversial history with respect to Medicare audits and investigations. [6].  In a recent False Claims Act brought by the government, the government alleged that the provider billed the Medicare program for a significant, separately identifiable E/M service, supposedly provided  by the same physician on the same day as lavage and / or pelvic floor therapy services.  The bottom line is simple, if you are billing Modifier -25 in connection with your claims, you should expect to be audited!
  • Failure to provide and document failed pelvic muscle exercise training. Multiple cases brought by the government have denied CPT Code 90911 claims because there was no evidence that prior to trying pelvic floor therapy training, the patient had received a four-week course of failed pelvic muscle exercise training, and the exercise training had failed to remedy the patient’s incontinence issues. CPT Code 90911 audits have regularly found that the required predicate exercise training was not conducted.
  • Failure to properly supervise anorectal manometry diagnostic services. It was alleged that the physician failed to personally supervise the performance of anorectal manometry procedures performed by his medical assistants. Anorectal manometry (CPT Code 91122) testing procedures are used as a diagnostic tool to measure a patient’s anal sphincter pressures. The testing is also used to provide an assessment of a patient’s rectal sensation, rectoanal reflexes, and rectal compliance. When supervising the provision of these services, all of the supervision requirements set forth in 42 C.F.R. § 410.32 regarding diagnostic tests apply.  When billing for services covered by CPT Code 91122, the required Supervision Level is “2.”  In other words, direct supervision requirements apply to services billed under this code. Moreover, under 42 C.F.R. § 410.32, “these diagnostic testing services must be ordered by the physician / nonphysician practitioner who is treating the patient, that is, the physician / nonphysician practitioner who furnishes a consultation or treats a patient for a specific medical problem and who uses the results in the management of the patient’s specific medical problem. Tests not ordered by the physician / nonphysician practitioner who is treating the patient are not reasonable and necessary.”[7]  As a final point, providers should take care to ensure that CPT Code 91122 is not confused with CPT Code 90911.  As LCD 33263 further reflects, “diagnostic testing is not a medically necessary part of physical therapy, rehabilitation, biofeedback, or [an] exercise program.”
  • Billing for services not rendered. There have been multiple instances where law enforcement has alleged that biofeedback / pelvic floor therapy claims were billed to Medicare, when in fact the services were not provided.
  • Billing for therapy services provided by unlicensed and unqualified individuals. The basis for denial is increasingly being cited in audits around the country. It is essential that practices review the applicable LCD requirements to ensure that individuals providing the therapy services meet the qualifications set out in the guidance.  For example, several cases brought by law enforcement have alleged that urogynecology, OB/GYN, and multidisciplinary practices improperly billed for pelvic floor physical therapy services that were provided by an unqualified individual.
  • Failure to properly supervise pelvic floor therapy training services. In one recent case, it was alleged that the physician failed to personally perform or directly supervise pelvic floor therapy services during time periods when he was out of the state or out of the country. Although now superseded, LCD 33631[8] sets out:

“Medicare billable therapy services may be provided by any of the following within their scope of practice and consistent with state and local law: Physician; Non-physician practitioner (NPP) (physician assistants, nurse practitioners, clinical nurse specialists); Qualified physical and occupational therapists, speech language pathologists (for CPT codes G0515 and 97533), and assistants working under the supervision of a qualified therapist; Qualified personnel, with or without a license to practice therapy, who have been educated and trained as therapists and qualify to furnish therapy services only under direct supervision incident to a physician or NPP.” (Emphasis added).

  • Failure to properly document the services provided. Although this reason for denial is among the most frequent we have seen cited in administrative audits, it has also been a component of both Civil Monetary Penalty assessments and False Claims Act cases against urogynecology, OB/GYN, and multidisciplinary practices. Government contractors, the OIG and DOJ often use this deficiency to support their claims that the services billed were not medically necessary.
  • Billing for medically unnecessary services. In multiple instances, defendants were alleged to have provided and billed for diagnostic services that were not reasonable and necessary.
  • Submitted claims for diagnostic services when therapeutic services were provided. For example, in at least one case, the defendants were alleged to have improperly submitted claims for diagnostic electromyography (CPT Code 51784) and diagnostic anorectal manometry (CPT Code 91122) when therapeutic, not diagnostic, services had been provided.
  • Billing for Evaluation & Management services that were never provided.

It is important to keep in mind that if your clinic is audited, the results of the government’s review can lead to:

          An assessment of Civil Monetary Penalties by the OIG;

          Allegations of violations of the False Claims Act by either DOJ or by a whistleblower; and

          Allegations of violations of criminal law.

If your claims are audited, it is essential that you assess your documentation before turning it over to the government.  We typically assess the date of service / claim at issue and submit a comprehensive analysis of the documentation to ascertain whether the claim qualifies for coverage and payment.

VI.  Responding to an Audit:

Should you receive notice of an audit or investigation from a CMS contractor, the OIG or the Department of Justice (DOJ), we strongly recommend that you contact a qualified health care regulatory lawyer before responding to the request.  To be clear, not every CMS contractor audit requires the services of an attorney.  Nevertheless, it is in your best interests to first consult with your attorney.  Every case is different.  The approach you take when responding to an audit will depend, in part, on the claims at issue, the entity conducting the audit and the scope of review.  When we are engaged to handle these audits, several of the steps we take include:

Legal counsel should contact the CMS contractor, the OIG or DOJ and attempt to obtain any additional information regarding the nature and scope of the audit. All requests for medical records and other information must be taken seriously.  You can’t  take the position that a request from a CMS contractor (such as Zone Program Integrity Contractor (ZPIC) or a Uniform Program Integrity Contractor (UPIC)) can be taken less seriously.  Both ZPICs and UPICs are program integrity contractors and will not hesitate to make a referral to OIG or DOJ if evidence of improper billing or fraud is identified.  

We strongly recommend that you limit any direct communications between you and the auditors. Remember, everything you say is evidence.  A quick review of high-profile cases now in the news will confirm that the government won’t hesitate to pursue prosecutions based on obstruction, false statements and similar legal violations other than those based on the substantive claims under review.

Qualified legal counsel should immediately conduct its own assessment of the claims at issue. For instance, in our firm, the attorneys working on your case are also likely to be “Certified Medical Reimbursement Specialist” and / or a “Certified Medical Compliance Officer.”  Make sure that your legal counsel is experienced in assessing the medical necessity, documentation, coding and billing issues in your case.

Work through your counsel to properly and fully respond to a request for documentation.  Always keep a copy of any information shared with the government or its contractors.  Most of the time, you will submit a copy of the medical records requested when responding to the request.  However, in limited instances, a subpoena may require that you turn over the original documents (or send over a mirror image of the electronic records).  If that is the case, be sure and keep a copy!

Legal counsel will try to “get in front of the case.” You need to know about, and prepare to respond to potential problems that the government may raise after reviewing your claims.

VII.  Conclusion:

Don’t wait until you are being audited to review your medical necessity, documentation, coding and billing practices! Urogynecology, OB/GYN, and multidisciplinary practices should take steps now to ensure that an effective Compliance Program is in place and that you and your staff are fully complying with applicable statutory and regulatory requirements.

Robert W. Liles defends health care providers in Medicare pelvic floor therapy claims auditsRobert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law.  Liles Parker attorneys represent health care providers and suppliers around the country in connection with ZPIC audits, UPIC audits, OIG audits and DOJ investigations.  For a free initial consultation regarding your situation, call Robert at:  1 (800) 475-1906.

[1] Biofeedback is a mind–body technique that can be used to train individuals how to modify their physiology for the purpose of improving physical, mental, emotional health. Clinical biofeedback can be assist in managing a patient’s symptoms through stress management training and can assist in the re-education of muscles to help address urinary incontinence. For additional information, see Ment Health Fam Med. 2010 Jun; 7(2): 85–91.

[2] In order to qualify for coverage, biofeedback must be rendered by a qualified practitioner in an office or other facility setting. The Centers for Medicare and Medicaid Services (CMS) has reaffirmed its existing national noncoverage policy for home biofeedback devices in the treatment of urinary incontinence.  For additional information in this regard, please see CMS’s guidance dated March 1, 2002, titled Coverage Decision Memorandum for Home Biofeedback for Urinary Incontinence.”  

[3] A failed trial of pelvic muscle exercise training is defined as “no clinically significant improvement in urinary incontinence after completing 4 weeks of an ordered plan of pelvic muscle exercises to increase periurethral muscle strength.”

[4] National Coverage Determination (NCD) for Biofeedback Therapy for the Treatment of Urinary Incontinence (30.1.1),”  (effective July 1, 2001).

[5] Comprehensive Error Rate Testing (CERT) audits are a limited exception to this general rule.  Pursuant to the Improper Payments Information Act of 2002, CMS is required to estimate the improper Medicare fee-for-service payments made to health care providers each year by Medicare Administrative Contractors (MACs). Consistent with this mandate, CMS utilizes the CERT program to estimate the error rate.  Essentially, the purpose of a CERT audit is to verify whether a Medicare Administrative Contractor is properly paying Medicare claims and has effective edits in place to deny (or place in suspense) claims that for one reason or another may not qualify for coverage and payment.

[6] Use of Modifier 25;

[7] This example of the supervision requirements governing CPT Code 91122 services is set out the Local Coverage Determination guidance issued by First Coast Service Options sets out the supervision requirements See “Anorectoral Manometry and EMG of the Urinary and Anal Sphincters” (L33263).  Applies to services performed on or after October 1, 2016.

[8] For example, the supervision requirements governing these services is set out the Local Coverage Determination guidance issued by National Government Services, Inc. See “Outpatient Physical and Occupational Therapy Services,” (L33631). Applies to services performed on or after January 1, 2018.

UPIC Dental Audits (Such as Qlarant Dental Audits) Have Been Initiated. Is Your Practice Ready for its Medicare Dental Claims or Medicaid Dental Claims to be Audited?

UPIC Dental Audits Such as Qlarant Dental Audits are Currently Taking Place

(July 3, 2018):  While a number of Medicare Advantage Plans now offer supplemental coverage for preventive, basic, and major dental services, only a narrow category of dental services qualify for coverage and payment under standard Medicare Part A (pursuant to Section 1862(a)(12) of the Social Security Act).  Presently, only qualifying Medicaid beneficiaries are likely to have dental services coverage.  With this in mind, last week’s Press Release by the Centers for Medicare and Medicaid Services (CMS) is especially pertinent.  As CMS announced, the agency is implementing “new and enhanced initiatives designed to improve Medicaid program integrity through greater transparency and accountability, strengthened data, and innovative and robust analytic tools.”  What does this mean for dentists and dental practices participating in the Medicaid program? Simply put, it means more dental audits and a much closer scrutiny of your assessment of medical necessity, documentation of the dental services provided, utilization practices and any business arrangements in which you participate.  This will become especially apparent as Unified Program Integrity Contractors (UPICs) transition into their new roles as program integrity contractors of both Medicare and Medicaid claims.  Over the last few months, we have noted that dentists and dental practices around the country are increasingly being targeted by UPICs in connection with government-paid claims. This article examines the history and direction of the CMS’s Fraud Prevention efforts and provides a thorough discussion of UPICs, highlighting their purpose, jurisdiction, and functions.

I.  What is a UPIC?

Although UPICs are free to audit both Medicare and Medicaid dental claims in their jurisdiction, this article is primarily focused on the UPIC’s targeting of Medicaid dental claims.  As set out in Section 1.2 of the CMS Medicaid Program Integrity Manual:

Unified Program Integrity Contractors (UPICs) are contracted entities with CMS that conduct investigations and audits related to activities in an effort to reduce fraud, waste, and abuse in both the Medicare and Medicaid programs. The UPICs operate in geographic areas or “jurisdictions” defined by individual Task Orders.  The UPICs Perform numerous functions to detect, prevent, and deter specific risks and broader vulnerabilities to the integrity of the Medicare and Medicaid programs including, but not limited to:

  • Proactively identify incidents of potential fraud, waste, and abuse that exist within its service area and take appropriate action on each case;
  • Investigate allegations of fraud made by beneficiaries, providers/suppliers, CMS, Health & Human Services Office of Inspector General (OIG), and other sources;
  • Explore all available sources of fraud leads, including the state Medicaid agency (SMA) and the Medicaid Fraud Control Unit (MFCU);
  • Refer and/or recommend appropriate Medicaid administrative actions to state Medicaid agencies where there is reliable evidence of fraud, including, but not limited to, overpayments, payment suspensions and terminations;
  • Refer cases to the OIG/Office of Investigations (OI) for consideration of civil and criminal prosecution and/or application of administrative sanctions;
  • Partner with state Medicaid Program Integrity Units to perform the above activities for the Medi-Medi program and Medicaid-only investigations; and
  • Work closely with CMS on joint projects, investigations and other proactive, anti-fraud activities. The UPICs utilize a variety of techniques to address any potentially fraudulent, wasteful, or abusive billing practices based on the various leads they receive. The UPICs Integrate the program integrity functions for audits and investigations across Medicare and Medicaid, and assure that CMS’s National priorities for both Medicare and Medicaid are executed and supported at the state level or within the UPIC jurisdiction.”  (emphasis added).

II.  Purpose of the UPIC Program:

The purpose of the UPIC program has been to consolidate the work currently being performed by various Medicare and Medicaid program integrity contractors under a single private sector contractor.  Each UPIC is responsible for handling federal level program integrity audits for both Medicare and Medicaid within a defined geographic area (typically comprised of multiple states).  The following private sector contractors have been awarded UPIC contracts:

  • Qlarant (Previously known as “Health Integrity, LLC”) (Western Jurisdiction)
  • AdvanceMed Corporation (Midwestern Jurisdiction)
  • IntegriGuard, LLC, dba HMS Federal (Indefinite Delivery, Indefinite Quantity[1])
  • Noridian Healthcare Solutions, LLC (Indefinite Delivery, Indefinite Quantity)
  • Safeguard Services LLC (North Eastern Jurisdiction)
  • StrategicHealthSolutions, LLC (Indefinite Delivery, Indefinite Quantity)
  • TriCenturion, Inc. (Indefinite Delivery, Indefinite Quantity)

Recognize a few familiar names?  You should.  Virtually all of these private sector companies have previously been awarded one or more prior CMS audit contracts.  In any event, it has taken a while for CMS to wind-down existing program integrity contracts with Zone Program Integrity Contractors (ZPICs), responsible for auditing Medicare claims and Medicaid Integrity Contracts (MICs), responsible for auditing Medicaid claims.  Those efforts are still ongoing in several areas of the country. 

III.  UPIC Dental Audits:

A number of dentists and dental practices around the country are currently receiving audit letters from Qlarant[2], the UPIC responsible for conducting both Medicare and Medicaid program integrity audits in the Western Jurisdiction.  While dental audits are nothing new, the initiation of UPIC audits of Medicaid, and in some cases, Medicare dental audits, has significantly raised the level of risk faced by participating dental providers.  Like their ZPIC predecessors, UPICs are actively looking for evidence of fraud and will not hesitate to make a referral to federal and / or state prosecutors if potentially criminal conduct is identified.[3]

Over the last few months, a number of Medicaid dental providers have called our office and asked, “Why on earth is my dental practice being targeted by a UPIC.” Simply speaking, as occurrences of dental claims fraud and improper billing practices have increased over the course of the last few years, so has the likelihood of potential dental claims audits. CMS’s reasoning becomes more apparent when you consider the fact that Medicaid spending has increased from $456 billion in 2013 to an estimated $576 billion in 2016.  In consideration of these factors, CMS has determined that there are significant Medicaid dental program integrity risks that must be addressed.  Not surprisingly, UPICs such as Qlarant are now actively auditing Medicaid dental claims.  When auditing Medicaid dental claims, UPIC auditors will undoubtedly address the following factors:

  • Whether the Medicaid dental services billed were actually rendered;[4]
  • Whether the Medicaid dental services rendered were medically necessary;[5]
  • Assuming that the Medicaid dental services were, in fact, medically necessary, do they qualify for coverage under the payor’s contract?[6]
  • Whether the documentation maintained meets applicable State Dental Practice Act requirements AND any required documentation requirements mandated under your State Medicaid Provider Agreement, AND (if applicable to a particular claim), any other requirements that may be set out under your contract with a Medicaid Advantage Plan.[7]
  • Whether one or more other statutes (such as the Anti-Kickback Statute) were violated which effectively renders one or more Medicaid dental claims non-payable;[8]
  • Whether the dental services rendered were properly coded[9]; and
  • Whether the dental services rendered were properly billed.[10]

IV.  What you can Expect in UPIC Dental Audit of Your Medicare Dental Services or Medicaid Dental Services?

Although UPIC dental claims audits can be generated in a wide variety of ways, most are the result of claims data mining assessments, complaints by patients (or in some cases, competitors), or referrals from another government contractor.[12]  Through data mining, UPIC auditors can tell with a high degree of accuracy how long it should take for you to perform all of the dental services you billed in a single day. They will also compare your dental claims billing patterns to those of other dental providers.  If any of your billing practices or patterns appear to be irregular, they will initiate an audit of your dental claims.  Regardless of the reason your dental claims have been targeted, if a UPIC initiates an audit of your dental practice you can expect several things. For instance, if your Medicare / Medicaid dental claims are audited by Qlarant or another UPIC, you will likely be asked to provide the following documentation for each date of service under review:

  • Hospital history and physical;
  • Hospital records;
  • Medical diagnosis;
  • Medical imaging, laboratory studies, radiology studies;
  • Dental exam with dental chart;
  • Health history
  • Referrals
  • Consultations
  • Consents for treatment and anesthesia
  • Proposed treatment plan or plan of care
  • Complete dental record and treatment plan including ADA CPT procedure codes, tooth number and surface for each tooth that received treatment
  • Pre-operative exam notes
  • Dental imaging, radiology, panoramic x-rays (pre and post procedure)
  • Comorbidities
  • Progress notes
  • Operative/procedure notes
  • Anesthesia record
  • Post-operative status
  • Complications
  • Post-operative call record
  • Medications and/or anesthesia administered
  • Medications ordered
  • Discharge instructions
  • Follow up appointments
  • Dental claim form
  • Appointment history report
  • Itemized ledger report
  • Statement of billing
  • Remittance advice
  • Any other documentation to support the billed claim

You may also be subjected to an “unannounced visit” by a UPIC auditor.  These unexpected face-to-face visits have become quite common.  If this occurs, the UPIC auditor will typically provide you with a list of claims to be reviewed but will also want to obtain a sample of the associated medical records before they leave the practice.  As part of the site visit, the UPIC auditor may also request to interview your personnel.  This is where it can get quite complicated.  As a participating provider, you have an affirmative obligation to cooperate with the UPIC’s requests.  Unfortunately, the interview of you and your staff could possibly lead to admissions against interest.  Call your attorney if a UPIC pays an unexpected visit your practice.  We can usually negotiate a time with the auditor so that you (and members of your staff) can be represented by legal counsel.

Often, your first notice of an audit will be the receipt of a letter outlining a UPIC’s dental records request. As a participating provider in the Medicare and / or Medicaid programs, you are required to furnish and submit sufficient information to justify payment as a basic condition of our participation.  UPIC audit letter typically require that you submit the appropriate records and information within 30 calendars days (from your date of receipt of the UPIC’s letter).  Should you fail to comply with a request for dental records, the UPIC may:

  • Issue a determination that an overpayment has been made.
  • Allege that the claims request was a Statistically Valid Random Sample (this depends on the size and nature of the initial claims audit). If eligible, the UPIC may then project your error rate to the universe of claims processed during the particular time frame of your audit.
  • Request that CMS suspend your Medicaid payments.
  • Recommend to the HHS, Office of the Inspector General (OIG) that you and / or your dental practice be excluded from participation in federal and state health benefit programs (including, but not limited to Medicaid) in accordance with § 1128(b)(11) of the Social Security Act.

 V.  UPIC Dental Audits – Worst Case Scenario:

It is important to keep in mind that UPICs view themselves as an arm of law enforcement. Whether you agree with the UPIC’s view of their role or not, the fact remains that UPICs are always on the lookout for evidence of wrongdoing, improper conduct or fraudulent acts that go beyond what is typically associated with a mere overpayment. When potentially-fraudulent conduct is identified, referrals to federal or state law enforcement and / or licensure agencies may be made.  In addition to facing administrative sanctions such as revocation, suspension and / or exclusion, these referrals may also lead to one or more of the following actions:

  • Revocation of a dentist’s DEA permit.
  • Referral to the State Dental Board for investigation and possible disciplinary action.
  • The assessment of Civil Monetary Penalties (CMPs) by OIG.
  • Referral to the U.S. Department of Justice (DOJ) for possible civil prosecution of False Claims Act violations.
  • Referral to the DOJ for criminal prosecution. These cases have typically involved violations of the Anti-Kickback Statute, Health Care Fraud and / or other criminal laws.  Examples of conduct that has led to criminal prosecution include billing Medicaid for unnecessary procedures and / or billing Medicaid for procedures that were never performed.
    • In one case, a single dentist and his former employer were unable to produce medical records to support 335 claims totaling $26,657 that were sampled at his practice.
    • In another case, a dentist was audited because it was virtually impossible for him to complete all of the services he billed for in a single day. When asked about the billings, he reportedly stated that he could complete a filling procedure in 30 seconds.  As you can imagine, the government didn’t believe the dentist.
    • One government audit found that two dentists billed for four or more fillings on one tooth or for two types of fillings on the same surface of the same tooth.
  • Billing Medicaid for substandard work.
  • Submitting claims for reimbursement under another dentist’s Medicaid provider number.
  • Too many or too few X-rays. In some cases, the x-rays have been taken incorrectly, taken by employees not licensed to operate the x-ray machine, and/or unreadable or even blank.

VI.  Preparing for a Dental Claims Audit:

Dental providers must realize that they are responsible for any and all claims submitted by their practice, whether or not they even have direct knowledge of the claim.  You are liable for all of the information recorded on the Dental Claim Form.

  • Do you have an effective Compliance Program in place? It is required under the Affordable Care Act.  Moreover, most state Medicaid programs require that a such a plan be in place.  Finally, all Medicaid Advantage plans require that participating dental providers have a Compliance Program.
  • Have you and your staff reviewed necessary information regarding specific codes for billing Medicaid dental claims? Have you paid special attention to federal / state regulatory requirements, State Dental Practice obligations, and your contractual mandates?
  • When was the last time you conducted an internal dental claims audit and examined whether the services you are providing fully reflect medical necessity requirements, are documented to meet the requirements of the payor, and are properly coded and billed?
  • When was the last time you conducted an audit of your dental business practices? Are your practices free of any possible violations of the False Claims Act or Anti-Kickback Statutes?
  • Have you fully implemented each of your obligations under HIPAA and HITECH?
  • Do you have an effective anonymous compliance reporting mechanism in place? Have you advised and trained your dental practice staff on their obligations to report improper billings or conduct to your practice’s Compliance Officer?
  • Are you screening your dental practice employees, contractors, vendors and contractors through all Federal and State exclusion databases?

Being able to answer these questions can significantly reduce your exposure to outside audits and can help you in setting up (if you have not already done so), and maintaining an effective Compliance Program. It is our recommendation that you engage a suitable, qualified entity to help you. In this regard, Liles Parker can provide you with the advice and counsel you need. Our attorneys represent dental practices in both Medicaid and private payor dental audits. Moreover, we can assist you in assessing your current level of compliance so that you will be better prepared if your practice faces a UPIC audit in the future.

Robert Liles represents dentists in UPIC dental audits.Robert W. Liles, J.D., M.B.A., M.S., serves as Managing Partner at the law firm Liles Parker, Attorneys & Counselors at Law.  Liles Parker attorneys represent dentists and dental practices around the country in connection with Medicaid claims audits and audits by private payors.  For a free initial consultation, give us a call at: 1 (800) 475-1906.

[1] What does it mean if a contractor has been awarded a UPIC contract but it is designated as “Indefinite Delivery, Indefinite Quantity?”  This is a term that is used by the General Services Administration (GSA) when the agency is not yet in a position to determine, above a specified minimum, the precise quantities of supplies or services that the government will require during a contract period. Essentially, it means that the ZPIC contracts in the remaining jurisdictions remain in place and are winding down.  As those contracts terminate, the new UPIC contracts will be implemented.

[2] Qlarant was formally known as “Health Integrity, LLC” when it operated as a ZPIC for Zone 4.

[3] In contrast to their ZPIC predecessors (which are only responsible for auditing Medicare claims), UPICs are responsible for conducting program integrity audits of both Medicare AND Medicaid claims.

[4] For example, in 2017, the U.S. Attorney’s Office for the District of Nebraska unsealed an Indictment against a Nebraska-licensed dentist alleging that the dentist submitted approximately 129 claims to the Nebraska Medicaid program for dental services that the government alleges were never performed.  The defendant dentist has been charged with violations of Health Care Fraud, 18 U.S.C. §1347.

[5] In its earlier incarnation as a ZPIC, it was our experience that Health Integrity auditors sometimes conflated “medical necessity” with “coverage.”  This often resulted in audit findings proclaiming that one or more services rendered were allegedly not medically necessary, when in fact the services were medically necessary, they just didn’t qualify for coverage under the payor’s contract.

[6] See Footnote #5.

[7] In our review of dental claims, the lack of adequate documentation has been identified as the primary reason cited by auditors when denying payment.  Dentists and dental professionals MUST review federal and state regulatory requirements, along with applicable contractual obligations to ensure that their documentation practices are fully compliant with coverage and payment rules.

[8] For example, in November 2017, the U.S. Attorney’s Office for the Southern District of New York unsealed a Complaint against a New York licensed dentist and a non-licensed individual performing unauthorized dental services.  As the Complaint reflects, some of the Medicaid claims billed were associated with patients who had been recruited to the dental practice and paid kickbacks of $25 to undergo minimal dental procedures.

[9] Improper coding practices can take a wide variety of forms.  While “upcoding” and “billing for services not rendered” are perhaps the most common violations cited by dental claims auditors.  We have also seen instances where dentists or dental practices have rendered non-covered services but have miscoded the services so that they would qualify for coverage and payment.

[10] While every dental practice is different, a common billing error that we have identified in our compliance reviews has been that dental practices often fail to credential new dentists with one or more payors in a timely fashion.  Instead, the practices improperly bills for the dental services rendered by a non-credentialed provider under the number of a credentialed provider.  We have found this problem when auditing both Medicaid and private payor dental claims.  This improper practice can lead to the repayment of overpayments, referral to one’s State Dental Board, liability under the civil False Claims Act, and, in more serious cases, in criminal prosecution.


[12] For a more detailed discussion of how UPIC audits are generated, please see: Medicare Program Integrity Manual, Chapter 2, §2.3.  The sources utilized by UPICs are the same as those relied on by ZPICs.

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