The Dangers of Billing Payors for the Services of a Non-Credentialed Dentist / Non-Participating Dentist

(August 17, 2019):  Over the last year, we have seen a significant increase in the number of Medicaid and private insurance audits of dental claims. A common trigger for these audits included instances in which a practice improperly billed for the services of a non-credentialed dentist while using the identification number of a credentialed provider.  When we discussed this billing audit issue with our dental clients, many were surprised to learn that this practice was improper. Unfortunately, billing for services performed by another dentist using your National Provider Identifier (NPI) can result in a wide range of adverse actions against you and your practice.  This article examines this issue and discusses the potential fallout of engaging in this type of conduct.

I.  What is “Credentialing” and Why is it Important?

The credentialing processes utilized by insurance companies serve as a payor’s first line of defense and are intended to protect patients, help ensure the quality of care being provided, and safeguard the financial integrity of the insurance plan. The Joint Commission describes “Credentialing” as:

“[t]he process of obtaining, verifying, and assessing the qualifications of a practitioner to provide care or services in or for a health care organization. Credentials are documented evidence of licensure, education, training, experience, or other qualifications.”[1]

It is important to keep in mind that the specific credentialing requirements and procedures used vary from one payor to another. For example, dentists who wish to enroll in their State Medicaid Program are typically required to complete multiple credentialing applications.

• State Medicaid Programs require that each dental practice obtain a provider number; and
• Each dentist who will be performing dental services on Medicaid patients must be individually credentialed and admitted as a participating provider; and
• After being admitted as a participating provider in a State Medicaid Program, a dentist must still complete separate credentialing applications in order to become a participating provider in the various Medicaid Managed Care programs that may be available in your state.

II.  What’s the Worst that Can Happen if You Improperly Bill the Services Of a Non-Credentialed Dentist / Non-Participating Dentist Under the Billing Number of a Credentialed Dentist / Participating Dentist?

Let’s consider the following common hypothetical situation: suppose you own a growing dental practice that provides dental care and treatment services to both adults and children.  You are a participating provider in the State Medicaid Program and also participate in a number of Medicaid Managed Care and private payor plans.  You recently hired a new dentist to help with your ever-growing patient caseload.  Although you are fully credentialed by each of the government and private payor insurance plans, your new dentist is still in the process of completing her credentialing applications, and you have been told that it may take 90 days (or even longer) for Medicaid, Medicaid Managed Care and private payors to review and approve the new dentist’s credentialing application.  How are you expected to bill for the dental services provided by your newly hired dentist? Can you bill for the services of a non-credentialed dentist using your provider number?  As we will discuss below, the improper billing of dental services performed by a non-credentialed provider under the provider number of a credentialed dentist can lead to administrative, civil and even criminal liability.

Administrative Sanctions:  At a minimum, if you improperly bill the dental services of a non-credentialed dentist under the name and provider number of a credentialed dentist, you should expect the payor to take the position that each of the improperly billed claims constitute an overpayment that must be repaid to the insurance company.  Unfortunately, in many of the cases we have seen and / or defended, the government and private payors have imposed additional sanctions.  In some instances, where the claims at issue have been covered by Medicaid or Medicaid Managed Care, the Department of Health and Services, Office of Inspector General (OIG) pursued Civil Monetary Penalties against the provider.  We have also defended clients in cases where the payor had terminated the provider’s participation in the payor plan and / or filed a complaint against the dentist with the State Board of Dental Examiners.   Examples of cases where administrative sanctions have been imposed are set out below:

• Indiana. $125,446 in Civil Monetary Penalties Assessed.  An Indiana dental practice was assessed significant penalties by the Department of Health and Services, Office of Inspector General (OIG) as a result of alleged improper billing practices.   The government alleged that the dental practice submitted claims to the state Medicaid program for dental services that were performed by non-credentialed dentists under the names of dentists who were credentialed with Indiana Medicaid.

• Massachusetts. $841,120 in Civil Monetary Penalties Assessed. In this case, a Massachusetts-based dental school was alleged to have submitted claims to Medicare[2] for dental services that were provided by non-credentialed dentists.  Additionally, the OIG claimed that the level of dental service billed was not supported by the associated dental records and documentation.

• Multiple States. Disciplinary Licensure Actions are Pending – Multiple State Boards of Dental Examiners.    We have been (and are currently) involved in multiple matters where Medicaid Managed Care and / or private payor insurance plans have filed complaints with State Dental Boards against dentists for allegedly submitting false or fraudulent claims to the insurance company.  Notably, the improper conduct alleged has consistently included allegations that the dental practice submitted the claims of dental services performed by non-credentialed dentists under the names and NPIs of dentists who were properly credentialed in a particular plan.

Civil Sanctions — False Claims Act Liability.  Most of the cases brought under the False Claims Act[3] against Medicare and Medicaid participating providers in connection with the improper billing of services by a non-credentialed provider involved medical, rather than dental services.  Nevertheless, this remains a significant risk for dental practices that bill Medicaid and Medicaid Managed Care plans.  Two examples of False Claims Act cases that were brought against Medicare providers for the wrongful billing of services performed by non-credentialed physicians are set out below:[4]

• $500,000 Settlement Under the False Claims Act.  In a case in  the Western District of Oklahoma, a licensed physician allowed an uncredentialed practitioner to use his NPI to bill Medicare for Evaluation & Management (E/M) physical therapy services that the licensed physician did not personally perform or supervise. The government brought an action against the physician under the civil False Claims Act. The defendant had to pay $500,000 to settle the case.

•  $859,500 Settlement Under the False Claims Act. In this case, a well-respected state university health science center filed a self-disclosure with the OIG for submitting claims to Medicare using the NPIs of multiple physicians who did not render or supervise the services at issue.  The university health science center was forced to pay $859,500 to the government to settle alleged violations of the False Claims Act.

Criminal Sanctions:  In a worst-case scenario, Federal prosecutors may take the position that the wrongful billing of dental services by a non-credentialed provider under the name and provider number of a credentialed provider constitutes health care fraud.  In the case discussed below, a licensed dentist was prosecuted for engaging in various health care fraud schemes.  One of the counts in the prosecution included the dentist’s alleged “fraudulent” submission of services performed by a non-credentialed dentist.  To be clear, we have not seen any Federal prosecutions which were based solely on this specific type of illegal conduct.  Nevertheless, it is clear that if a dentist is alleged to have engaged in a broader scope of fraudulent conduct, prosecutors will not hesitate to include these types of false claims in an Information or Indictment against the physician.

• Defendant Ordered to Pay $956,448 in Restitution and Sentenced to 33 Months in Jail.  In a recent criminal prosecution (June 2019) in the Middle District of Tennessee, a licensed dentist and his former practice administrator were charged with Conspiracy to Commit Health Care Fraud.  The government further alleged that the defendant dentist “took steps to conceal the fraud by discouraging employees from questioning billing practices” and “instructing employees to lie if questioned by insurance companies.”Ultimately, the defendant dentist pled guilty to the charges and was sentenced to 33 months in Federal prison.  He was also ordered to pay $956,448.00 in restitution.According to the Information filed against the defendant dentist, the defendant engaged in various acts of fraud against the Delta Dental, Cigna, TennCare and DentaQuest programs, including:  (1)  Billing for dental services that were not completed or performed at all;  (2)  Falsifying dates of service to appear to comply with benefit programs’ timeframe and preauthorization requirements;  (3)  Falsifying claims to appear that services had been rendered by a benefits program credentialed dentist; 

III.  When Can Non-Credentialed / Non-Participating Dentists Properly Bill Under the Name and Number of a Participating Dentist?

Not surprisingly, Medicare, Medicaid and private payors have all established their own rules governing when, and if, a non-credentialed dentist can properly bill under a credentialed physician’s name and billing number.  In this section, we examine three of the most common scenarios in which a provider can bill for the dental services performed by a non-credentialed dentist:

Locum Tenens / Substitute Dentist.  The term “locum tenens” is a Latin phrase that means “one holding a place.”[5]  It is used to describe an independent contractor dentist or medical doctor who has been hired to temporarily take the place of a staff dentist or medical doctor who is absent due to illness, pregnancy, vacation or continuing dental education courses. It is also sometimes used to fill vacancies when a dental practice is short-staffed.  The rules governing the proper billing of dental services performed by a locum tenens dentist often vary from payor to payor. For instance:

• Medicare Locum Tenens / Substitute Dentist Rules.[6] As set out under Section 1842(b)(6)(D) of the Social Security Act, a physician may receive Medicare payment for physician[7] services (and for services performed incident to such physician services) that are performed by another physician on behalf of the billing physician if the billing physician is unavailable to provide the services, and the services are furnished pursuant to an arrangement that is either:  (1) Informal and reciprocal, or (2) Involves per diem or other fee-for-time compensation for such services.

In addition, the services must not be provided by the substitute physician over a continuous period of more than 60 days unless the billing physician is called or ordered to active duty as a member of a reserve component of the Armed Forces.  Since the definition of “physician” includes both a Doctor of Dental Medicine and a Doctor of Dental Surgery (see Footnote 7), it can be argued that a Medicare-participating dentist would also qualify for the coverage of this rule

• Medicaid Locum Tenens / Substitute Dentist Rules. In Texas, “a locum tenens arrangement is not allowed for dentists”[8] under the Texas Medicaid dental program.[9] However, under Texas Administrative Code (TAC) rules §354.1121 and §354.1221, it is permissible to bill for Medicaid dental services performed by substitute dentists as long as certain requirements are met.[10] The approach taken by a state’s Medicaid program with respect to the billing of locum tenens dentists and / or substitute dentists can vary from state to state.

• Private Payor Locum Tenens / Substitute Dentist Rules. The requirements to bill a private payor plan for the services of a locum tenens or substitute dentist may vary widely depending on the individual plan.  It is therefore important to research the billing rules that apply under each private payor contract.

“Incident to” Billing of Dentist Services.  At the outset, it is important to recognize that there is virtually no Medicare, Medicaid or private insurer guidance discussing whether the “incident to” billing of dental services that are performed by a non-credentialed dentist is permitted (assuming, of course, that the requirements of incident to billing have been fully met).  Despite the absence of written guidance in this regard, based on the way the incident to rule has been applied to physicians, an argument can be made that the concept also applies to dentists.

For example, Medicare has no rules which prohibit a non-participating physician who serves as auxiliary personnel to a participating physician from providing incident to services to the patient. In addition, Medicare does not preclude the supervising, participating physician from billing for incident to services performed by a non-participating physician as long as: (a) the services are reasonable, necessary and otherwise meet all of Medicare’s incident to requirements;[11] (b) the non-enrolled physician is properly licensed by the state; and (c) the incident to services comply with any applicable state law requirements.

Given that the definition of “physician” pertains to both a Doctor of Dental Medicine and a Doctor of Dental Surgery, one could argue that the incident to rules apply to dental services as well as general medical services.  Unfortunately, such an exception would only apply to dental services that qualify for coverage and payment by Medicare.

Medicaid, Medicaid Managed Care and private payor insurance plans have consistently opposed the applicability of incident to billing to dental services, even though nothing in their participation agreements mentions such billing practices.

IV.  Reducing Your Level of Risk:

There are several steps that your dental practice can take to better comply with the credentialing and billing requirements that have been established by the Medicare, Medicaid, Medicaid Managed Care and private payor insurance programs.  These include:

• Plan ahead by starting the credentialing process as soon as possible when a new dentist joins the practice.
• Restrict non-credentialed dentists from performing dental services on patients covered under a payor plan that requires credentialing.
• Until new hires are credentialed, have them limit their services to self-pay patients or other services that do not require credentialing.
• Read your enrollment applications and their associated payor contracts. What are the credentialing requirements that must be met?
• Does the insurance payor recognize incident to billing of dental services? Some private payor plans expressly prohibit the use of incident to billing.  If that is the case, and a provider knowingly billing for services performed by a non-credentialed provider under the name and NPI of a credentialed provider, the insurance company may argue that the provider has committed health care fraud.  

Robert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law.  Liles Parker attorneys represent dentists, dental practices and other health care providers around the country in connection with Medicare, Medicaid and private payor dental claims audits.  We also represent dentists in connection with State Dental Board complaints and investigations.  Are your dental claims or services 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] See https://www.jointcommission.org/assets/1/6/AHC_who_what_when_and_where_credentialing_booklet.pdf

[2] Although traditional Medicare Part A does not cover most dental care treatment services, it may cover certain dental procedures that are necessary for an otherwise covered service to be completed.  For instance, a Medicare patient may obtain coverage for certain dental work in connection with jaw surgery.  Additionally, several Medicare Advantage plans now cover routine vision and dental procedures.

[3] 31 U.S.C. § 3729-3733. The Federal civil False Claims Act is the primary civil enforcement tool used to combat fraud against the United States.  The False Claims Act imposes civil monetary penalties and treble damages on any person who knowingly submits, or causes to be submitted, a false claim to the government for payment.

[4] It is important to note that the two cited False Claims Act cases involved the submission of claims to the Medicare program. In these cases, the government noted that the improperly billed services were not performed or supervised by the credentialed provider under whom the service was billed.  This language reflects the exemption that if Medicare’s “Incident To” requirements are otherwise met, the services of non-credentialed physician can, in fact, be billed under the name of the supervising, credentialed physician.

[5] The Concise Oxford English Dictionary (Eleventh Edition).

[6] Please note, Medicare no longer uses the term “locum tenens” when referring solely fee-for-time compensation arrangements.  Under Section 16006 of the 21^st Century Cures Act, the term “locum tenens arrangements” is now used to refer to both fee-for-compensation arrangements and reciprocal billing arrangements.

[7] As set out on CMS’s website, the definition of “Physician” includes the following:

“For the purposes of Open Payments, a “physician” is any of the following types of professionals that are legally authorized by the state to practice, regardless of whether they are Medicare, Medicaid, or Children’s health Insurance Program (CHIP) providers:

• Doctors of Medicine or Osteopathic Medicine
• Doctors of Dental Medicine or Dental Surgery
• Doctors of Podiatric Medicine
• Doctors of Optometry
• Chiropractors

Note: Medical residents are excluded from the definition of physicians for the purpose of this program.”

https://www.cms.gov/OpenPayments/About/Glossary-and-Acronyms.html.

[8] https://hhs.texas.gov/about-hhs/communications-events/news/2017/11/services-rendered-a-substitute-dentist-may-be-billed-tmhp-utilizing-modifier-u5-effective-january-1.

[9] Notably, that is not the case when it comes to medical doctors.  Texas Medicaid does permit locum tenens arrangements for physicians.  As set out under Section 9.2.2 of the Texas Medicaid Provider Procedures Manual, “Physicians may bill for the service of a substitute physician who sees clients in the billing physician’s practice under either a reciprocal or locum tenens arrangement.”  A complete rendition of Section 9.2.2 can be found at:

http://www.tmhp.com/Manuals_HTML1/TMPPM/Archive/2016/Vol2_Medical_Specialists_and_Physicians_Services_Handbook.24.083.html.

^[10] These requirements include, but are not limited to:

“Dentists who take a leave of absence for no more than 90 days may bill for the services of a substitute dentist who renders services on an occasional basis when the primary dentist is unavailable to provide services. Services must be rendered at the practice location of the dentist who has taken the leave of absence. A locum tenens arrangement is not allowed for dentists.

This arrangement will be limited to no more than 90 consecutive days. Under this temporary basis, the primary dentist (who is the billing agent dentist) may not submit a claim for services furnished by a substitute dentist to address long-term vacancies in a dental practice. The billing agent dentist may submit claims for the services of a substitute dentist for longer than 90 consecutive days if the dentist has been called or ordered to active duty as a member of a reserve component of the Armed Forces. Medicaid and CSHCN accepts claims from the billing agent dentist for services provided by the substitute dentist for the duration of the billing agent dentist’s active duty as a member of a reserve component of the Armed Forces.

Providers billing for services provided by a substitute dentist must bill with modifier U5 in Block 19 of the American Dental Association (ADA) claim form.

The billing agent dentist may recover no more than the actual administrative cost of submitting the claim on behalf of the substitute dentist. This cost is not reimbursable by Medicaid or CSHCN.

The billing agent dentist must bill substitute dentist services on a different claim form from his or her own services. The billing agent dentist services cannot be billed on the same claim form as substitute dentist services.

The substitute dentist must be licensed to practice in the state of Texas, must be enrolled in Texas Medicaid, and must not be on the Texas Medicaid provider exclusion list.

The dentist who is temporarily absent from the practice must be indicated on the claim as the billing agent dentist, and his or her name, address, and National Provider Identifier (NPI) must appear in Blocks 53, 54, and 56 of the ADA claim form.

The substitute dentist’s NPI number must be documented in Block 35 of the ADA claim form. Electronic submissions do not require a provider signature.”

https://hhs.texas.gov/about-hhs/communications-events/news/2017/11/services-rendered-a-substitute-dentist-may-be-billed-tmhp-utilizing-modifier-u5-effective-january-1.

 [11] As discussed in MLM Matters Number: SE0441:

“To qualify as “incident to,” services must be part of your patient’s normal course of treatment, during which a physician personally performed an initial service and remains actively involved in the course of treatment. You do not have to be physically present in the patient’s treatment room while these services are provided, but you must provide direct supervision, that is, you must be present in the office suite to render assistance, if necessary. The patient record should document the essential requirements for incident to service. More specifically, these services must be all of the following:

• An integral part of the patient’s treatment course;
• Commonly rendered without charge (included in your physician’s bills);
• Of a type commonly furnished in a physician’s office or clinic (not in an institutional setting); and
• An expense to you.”

Additionally, in an office setting:

“In your office, qualifying “incident to” services must be provided by a caregiver whom you directly supervise, and who represents a direct financial expense to you (such as a “W-2” or leased employee, or an independent contractor).

You do not have to be physically present in the treatment room while the service is being provided, but you must be present in the immediate office suite to render assistance if needed. If you are a solo practitioner, you must directly supervise the care. If you are in a group, any physician member of the group may be present in the office to supervise.”

Genetic Testing Fraud Prosecutions are on the Rise Around the Country. Are Your Genetic Testing Practices Compliant?

(August 13, 2019):  Over the last year, a number of genetic testing fraud investigations and prosecutions have been initiated by Medicare, Medicaid and TRICARE investigators and auditors.  While the nature of the diagnostic services at issue are cutting edge, the wrongful conduct associated with these cases often involves old school fraud schemes that are easily identified and well known to law enforcement.  This article covers the origins of genetic testing and examines a number of genetic testing fraud cases that have been pursued by Federal prosecutors around the country.  In this article, we also discuss a number of the questions you should be addressing prior to engaging in the marketing, ordering or billing of genetic laboratory testing claims.

I.  Historical Background – The Discovery of DNA:

The discovery of deoxyribonucleic acid (commonly known as DNA) can be traced to the efforts of Swiss chemist Freidrich Miescher in 1869. Over the next 75 years, Miescher and others established the scientific foundation for the groundbreaking molecular work of James Watson and Francis Crick in 1952.  At that time, Watson and Crick first proposed that the DNA molecule was a double-helix structure.  Watson, Crick and their colleague, Maurice Wilkins were subsequently awarded the Nobel Prize in Physiology or Medicine in 1962 “for their discoveries concerning the molecular structure of nucleic acids and its significance for information transfer in living materials.”[1]

Over the next 20 years, scientists continued to research the nature and composition of the DNA molecule.  This ultimately led to the 1990 formation of an international scientific research effort that became known as the “Human Genome Project” (HGP).  The goal of researchers at that time was to identify and sequence more than 3.3 billion base pairs of the human genome.[2]  By 2003, an initial draft of the human genome was completed.  Over the last 16 years, refinements in mapping have continued to be made.  As of June 2019, scientists report that there are still 89 “gaps” that remain to be sequenced.[3]

II.  Practical Applications of Genetic Testing:

The successful mapping of the human genome has led to the development of literally thousands of tests that can now be used to determine whether there is any evidence of chromosomal abnormality that may be used to detect the possibility of illness or disease.  Genetic testing is now commonly used for a number diagnostic and treatment purposes, including, but not limited to the following:

• Diagnostic Genetic Testing. Genetic testing can be used for diagnostic purposes.  For example, it can be used to verify whether an individual has a diagnosis of cystic fibrosis or other disease that can be confirmed through a search for specific genetic abnormalities.

• Genetic Carrier Testing. If you have a family history of a specific disease that has been tied to one or more genetic defects, it may be possible to determine whether you are a carrier of this genetic abnormality.  As a carrier, this genetic mutation may be passed along to your children.

• Predictive Genetic Testing. This type of genetic testing also examines a patient’s family history to determine whether an individual is at a higher of risk of developing certain illnesses and / or diseases.

III.  The Emergence of Direct-to-Consumer Genetic Testing:

As the testing technology improved, the costs of conducting genetic testing procedures continued to drop to the point that it became commercially viable for a number of companies to offer direct-to-consumer test kits.  These kits were heavily marketed and promoted to the public as an effective way to predict an individual’s risk of developing certain illnesses and / diseases.

Allegations of deceptive marketing practices by direct-to-consumer genetic testing companies led to an investigation of these testing companies by the Government Accountability Office (GAO) in 2006.  At that time, GAO found that a number of “egregious examples of deceptive marketing.”  For example, four of the companies examined claimed that their assessment of an individual’s DNA could be used to create personalized supplements to cure diseases.  Two of these companies further claims that their supplements could “repair damaged DNA” or even cure certain diseases.  As the GAO noted, there was no scientific basis for these claims.[4]   As a result of the GAO’s findings, in 2006 the Centers for Disease Control (CDC), in conjunction with the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) issued consumer alerts warning the public to be wary of the claims being made by many of these genetic testing companies.

IV.  Impact of GINA and the ACA on the Use of Genetic Testing:

The development and expansion of genetic testing stoked the fears of many Americans that their specific genetic makeup could be used by health insurers and employers as a screening tool to weed out individuals who may be suffering from (or have the potential to develop) costly illnesses and diseases. To address these concerns, Congress passed the Genetic Information Nondiscrimination Act of 2008 (GINA) to prohibit health insurers and employers from using genetic information when making insurance eligibility and employment decisions.

The genetic testing industry received a further boost with the enactment of the Affordable Care Act (ACA). With the passage of the ACA, insurance payors were barred from denying coverage to patients with most preexisting illnesses and conditions. This effectively opened the door for patients to readily participate in genetic testing without the fear of losing their insurance due to the presence of a preexisting illness or disease.[5]

V.   Medicare Coverage of Specific Genetic Testing Procedures:

While the direct-to-consumer market has been in place for almost 20 years, most insurance payors have yet to issue comprehensive coverage guidance on genetic testing for diagnostic and screening purposes.  In order to qualify for coverage and payment under Medicare, a specific genetic test must meet the predicate requirements set out under 42 C.F.R. § 410.32.  While the Centers for Medicare and Medicaid Services (CMS) has been fairly progressive in approving the coverage of certain genetic tests for diagnostic purposes, it has been slow to authorize the coverage of genetic screening tests. For example, CMS did not finalize coverage of Next Generation Sequencing tests (diagnostic laboratory tests administered to patients with advanced cancer), until March, 2018.[6]  Additionally, Medicare still does not pay for genetic testing in many cases.[7]  Even the common genetic tests for the BRCA1 and BRCA2 gene mutation linked to breast cancer are only covered by Medicare under certain circumstances such as a family history of breast cancer.[8]

VI.  Primary Civil and Criminal Statutes Implicated in Genetic Testing Fraud Schemes:

Depending on the specific improper genetic testing conduct alleged, a variety of civil and / or criminal statutes may be implicated.  In this section, we briefly examine the various conduct that may result in prosecution by Federal law enforcement authorities.  Examples of problematic conduct includes:

42 U.S. Code § 1320a–7a(a)(5).  Beneficiary Inducement Provisions.  Under the beneficiary inducement statute, it is a violation of law to offer or provide anything of value to a beneficiary in order to influence the beneficiary to order or receive any item or service that is reimbursed by Medicare or Medicaid.  Violations of these provisions may result in the assessment of significant civil money penalties. Examples of improper beneficiary inducements include:  (1) Gift cards. Giving $100 gift cards to senior citizens covered by Medicare if they sign up to have a “free” DNA swab taken and submitted for genetic testing; (2) Other items of value. Providing a “free” health screening if a senior citizen signs-up for genetic testing and provides their Medicare information.

18 U.S.C. § 1347. Health Care Fraud.  Under this statutory provision, it is a criminal violation to defraud any health care program (both governmental and private payor programs) OR to obtain payment by means of false or fraudulent pretenses, representations or promises.  As the language reflects, this health care fraud statute is extraordinarily broad and may encompass a broad range of improper actions and conduct.  Examples of cases brought under this statutory provision include:  (1) Misrepresentation of a non-covered service. In some respects, this improper practice is nothing more than another form of “billing for services not rendered.” Simply put, in the cases we have seen where this has occurred, a genetic testing laboratory was alleged to have purposely billed a non-covered genetic test under the CPT code of a covered laboratory genetic test; (2) Misrepresentation of the ordering physician. This type of billing fraud is fairly common in laboratory testing fraud cases. We have seen cases where the putative ordering physician had never heard of the patient and did not know that his provider number was being improperly used to bill Medicare for genetic tests;  (3) Medically unnecessary services. We have seen multiple cases where the prerequisite requirements to qualify for a Medicare beneficiary to have a certain genetic test performed have not been met.  Moreover, representatives of the laboratory  billing for the genetic testing services were aware that these requirements had not been met.

42 U.S.C. § 1320a-7b(b).  Anti-Kickback Statute. It is against the law to provide something of value in an effort to induce a referral that is covered by a Federal health care benefit program.  Under the Anti-Kickback Statute, transactions aimed at inducing referrals for items or services billed to federal healthcare programs are strictly prohibited.  This criminal statute is, in part, aimed at preventing the overutilization of services and the providing of unnecessary services.  When it comes to genetic testing, ordering physicians, marketing representatives and others who receive kickbacks for referring genetics testing work to a laboratory for processing and billing may be criminally prosecuted.  As a final point, it is important to keep in mind that as a result of the Affordable Care Act, violations of the Anti-Kickback Statute may also be pursued as a violation of the civil False Claims Act.As the statute provides:

“(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, 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 10 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 10 years, or both.[9]”

18 U.S.C. § 220(a). Illegal Remunerations for Referrals to Recovery Homes, Clinical Treatment Facilities, and Laboratories. These statutory provisions were enacted in October 2018 as part of the “Eliminating Kickbacks in Recovery Act (EKRA).”  EKRA was intended to address patient brokering and other kickback schemes by expanding liability and raising the maximum penalties for kickbacks. Under this statute, the maximum penalties for illegal remunerations paid by recovery homes, clinical treatment facilities, and laboratories in an effort to induce referrals can result in penalties of $200,000 and 20 years of imprisonment per occurrence. To date, none of the publicized prosecutions of genetic testing related kickbacks have been brought under EKRA.  Nevertheless, we anticipate that private payor kickback cases involving genetic testing claims and laboratories will become public as investigations mature and referrals are made to Federal prosecutors around the country.An offense under this provision is described as:

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…”

31 U.S.C. § 3729 (a)(1)(A). Civil False Claims. Under this statutory provision, anyone who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval” is liable to the U.S. Government for civil penalties.[10]  Medicare does not cover “medically unreasonable and unnecessary services” so knowingly billing Medicare for medically unnecessary genetic tests could constitute a violation of the False Claims Act. is legislation under this section.[11]  Several of the cases discussed below were brought by former employees (whistleblowers) with knowledge of the fraud.

42 U.S.C. 1395nn. Ethics in Patient Referrals Act of 1989 (Stark).  Both the initial legislation and subsequent refinements to the law and corresponding regulations are all focused on prohibiting improper physician self-referrals for certain “Designated Health Services“ (DHS) for which Medicare would otherwise pay, to an entity with which the physician or an immediate family member has a financial relationship, unless one of the statutory or regulatory exceptions applies. Importantly, “Clinical Laboratory Services” are listed as DHS.  Under Stark, if a physician (or an immediate family member of such physician) has a financial relationship with clinical laboratory, the physician may not make a referral to the laboratory for the furnishing of services for which payment may be made under the Federal health care programs.  To date, the government has not cited violations of Stark as the basis for prosecuting one or more of the genetic testing fraud cases that have been widely publicized.  Nevertheless, the prohibitions presented under Stark should be considered since laboratory services are a recognized DHS.

VII.  Recent Genetic Testing Fraud Prosecutions:

In recent years, the U.S. Department of Justice (DOJ) has focused increasing resources on the investigation and prosecution of genetic testing related fraud and abuse.  These efforts have resulted in a genetic testing fraud prosecutions.  Some of the recent case pursued by DOJ prosecutors have included:

• March 2018.  Misrepresenting the Nature of a Genetic Test in Order to Get it Covered.  In this case, a California genetic testing company improperly billed TRICARE, FEHBP and Medicaid for services that did not qualify for coverage and payment. To get the claims paid, the company allegedly used an improper code which misrepresented the nature of the services.  To resolve violations of the civil False Claims Act, the genetic testing company agreed to pay $10,635,615.90 to TRICARE and FEHBP.  The company also paid $756,183.00 to the state Medicaid program to resolve similar allegations.
• December 2018.  Genetic Testing Kickback Case. A Vancouver, Washington toxicology and genetic testing lab was sued under the civil False Claims Act and agreed to pay $1,777,738 to settle allegation that it violated the FCA by paying kickbacks to obtain the referral Medicare and TRICARE covered tests from other local laboratories.  As the U.S. Attorney’s Office noted, “Paying remuneration to medical providers or provider-owned laboratories in exchange referrals encourages providers to order medically unnecessary services.” 
• February 2019.  Medically Unnecessary Genetic Testing Case. In this case, a San Diego genetic testing company agreed to pay $1.99 million to resolve allegations that the company violated the civil False Claims Act, 31 U.S.C. §§ 3729 et seq.  The government alleged that the genetic testing company submitted claims for genetic tests that were not medically reasonable and necessary because the prostate cancer patients at issue did not have any of the specific risk factors that qualified for the testing. Notably, this case was brought by two former employees of the testing company who filed suit under the whistleblower provisions of the False Claims Act.
• May 2019.  Medically Unnecessary Genetic Testing Case. A health system in Decatur, Texas agreed to pay $431,182.96 to resolve allegations that it violated the civil False Claims Act.  According to the government, the health system submitted false claims to Medicare for payment in connection with the ordering of genetic testing panels for surgical patients that were not medically reasonable or necessary. Notably, the samples taken from surgical patients to be subjected to genetic testing were sent to a lab in Tennessee for processing.   The U.S. Attorney’s Office for the Western District of Tennessee prosecuted the case against the Texas health system.
• May 2019.  Medically Unnecessary Genetic Testing Case.  In this case, a New Jersey laboratory sales representative pleaded guilty to one count of “Conspiracy to Commit Health Care Fraud.” The defendant obtained access to hundreds of senior citizens through his work with a non-profit organization, The Good Samaritans.  He was able to persuade these senior citizens to submit to genetic testing, despite the fact that no health care professional was involved.  Notably, the defendant reportedly used “fear-based tactics during the presentations, including suggesting the senior citizens would be vulnerable to heart attacks, stroke, cancer and suicide if they did not have the genetic testing.”  To get the genetic tests authorized, the defendant recruited health care providers off of Craigslist and paid them thousands of dollars each month to “sign their names to requisition forms authorizing testing for patients,” despite the fact that the health care providers had never examined or interacted with any of the patients.  The defendant, along with two co-conspirators were reported paid more than $100,000 in commission payments by two laboratories for whom they worked.  The defendant was sentenced to 50 months in prison and ordered to pay restitution of $434,963 and forfeiture of $66,844.
• June 2019.  Genetic Testing Kickback Case.  In this case, a Las Vegas cardiology practice agreed to settle violations of the Anti-Kickback Statute and the civil False Claims Act by agreeing to pay $2.5 million to the government. The government alleged that the cardiology practice referred patients for genetic testing in exchange for kickbacks from the testing laboratories.
• June 2019.  Genetic Testing Kickback Case.  The owner of a Tampa medical marketing company was recently prosecuted and found guilty of conspiracy to pay kickbacks and bribes.  In this case, the defendant was alleged to have paid kickbacks to medical clinics in exchange for the referral of DNA swabs that have been obtained from Medicare beneficiaries. The government further alleged that the medical clinics were directed to collect the DNA of all of their patients, regardless of medical necessity.  The defendant marketing company sent the DNA swabs to a clinical laboratory for genetic testing.  Over the course of the conspiracy, the clinical laboratory billed over $2.2 million to Medicare for genetic testing claims.  The defendant marketing company owner
• July 2019.  Improper Marketing Practices / Ordering Genetic Tests for Patients that Were Never Seen or Treated.   In this case, the Chief Medical Officer physician in Gainesville, Florida, along with two other individuals (non-physicians), have been charged with one count of “Conspiracy to Commit Health Care Fraud.”  The three individuals worked for a company that operated a network of laboratories that performed genetic testing procedures.  According to the government, the two non-physicians are alleged to have contacted a clinical laboratory in New Jersey and proposed sending ten DNA swabs for genetic tests in return for 50% of the Medicare payments received by the laboratory.  The DNA genetic tests reportedly listed the Chief Medical Officer as the “Ordering Physician.”  Moreover, the Chief Medical Officer certified that the tests were medically reasonable and necessary.  Upon investigation, the government has supposedly learned that all 10 of the patients for whom genetic testing was ordered live outside of Florida.  In order to qualify for coverage and payment, the genetic test ordered for one of the patients (who lived in Oklahoma) required that the patient have a personal history of breast cancer.  When interviewed, the patient reported that she had not had cancer and had not advised anyone to the contrary. When asked how she learned about the genetic testing opportunity, the patient reported that she submitted the DNA swab “after seeing an advertisement on Facebook that offered a $100 gift card for people interested in genetic testing.”  She further stated that the DNA swab was not taken at a medical office.  Instead, the swab was reportedly taken in a “plain old office building” by “some random guy.”  The Oklahoma patient has further alleged that she never saw or spoke with a treating physician or with the Chief Medical Officer (who was listed as the Ordering Physician) about the genetic testing.   If convicted, the defendants in this case may be sentenced to a maximum penalty of 10 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense.

VIII.  Genetic Testing — Staying Within the Four Corners of the Law:

As Medicare, Medicaid and private payors have expanded their genetic testing coverage policies, the number of laboratories, physicians and marketing companies involved in the procurement and provision of these tests has exploded.  Regrettably, many individuals and companies have moved into the genetic testing space without fully understanding the rules and regulations that must be met before these tests can be ordered, interpreted, billed and paid by Medicare and other payors.  If your business model involves the marketing of genetic testing services, the ordering of genetic tests or the performance of genetic tests, it is essential that you conduct a comprehensive assessment of your business (and, if applicable clinical) practices to ensure that your conduct does not violate the Federal Anti-Kickback Statute, EKRA, Stark, the False Claims Act or a host of other statutory and regulatory requirements that apply to these laboratory testing claims.

If you or your company are involved in the genetic testing industry, the following questions should be considered:

• Is your marketing company involved with the promotion of genetic testing services?
• Are you performing marketing services as an employee or as an independent contractor of a clinical laboratory?
• Are you a physician, nurse practitioner or physician assistant who has been approached and asked to serve as the “ordering physician” of genetic testing services?
• Are you a physician who has been approached by a marketing company, laboratory or other third party who has offered to pay you to conduct an evaluation (for the purpose of ordering genetic testing) via telemedicine?
• Has your medical practice been offered a fee (by a clinical laboratory or another third party) for each genetic test (DNA swab) that is taken from the patients seen in your practice?
• Has a clinical laboratory offered to give a percentage of Medicare, Medicare or private payor revenues generated by genetic testing claims referred to the laboratory by you or your medical practice?

Each of these questions raise a number of complex regulatory questions that must be fully vetted by an experienced health lawyer before you engage is such conduct.

Robert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law.  Liles Parker attorneys represent marketing companies, physicians and laboratories around the country in connection with government audits and investigations.  We also advise parties on the regulatory requirements of their current and / or proposed business arrangement, along with the parameters and requirements of the Federal Anti-Kickback Statute and EKRA.  Are your Medicare, Medicaid or private payor genetic testing claims being audited?  We can help.  For a free initial consultation regarding your situation, call Robert at: 1 (800) 475-1906.

[1] The Nobel Prize in Physiology or Medicine 1962. NobelPrize.org. Nobel Media AB 2019. Sun. 11 Aug 2019.
[2] https://web.ornl.gov/sci/techresources/Human_Genome/project/index.shtml.
[3] An examination of the remaining gaps in sequencing has been compiled by the Genome Reference Consortium. The Genome Reference Consortium is a coalition of international research institutes that have worked together to map and sequence the human genome.
[4] Direct-to-Consumer Genetic Tests – Misleading Test Results are Further Complicated by Deceptive Marketing and other Questionable Practices.  GAO-10-847T.  Released July 22, 2010.
[5] https://khn.org/news/safe-under-the-aca-patients-with-preexisting-conditions-now-fear-bias/
[6] https://www.cms.gov/newsroom/press-releases/cms-finalizes-coverage-next-generation-sequencing-tests-ensuring-enhanced-access-cancer-patients
[7] https://www.asco.org/practice-guidelines/cancer-care-initiatives/genetics-toolkit/genetic-testing-coverage-reimbursement
[8] Ibid.
[9] https://www.law.cornell.edu/uscode/text/42/1320a-7b
[10] The penalties for violations of the False Claims Act are currently:
Treble damages, plus $11,463 and $22,927 per false claim or statement. (These 2019 estimated amounts reflect the anticipated increase that has not yet been announced by DOJ).
[11] https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/Items-and-Services-Not-Covered-Under-Medicare-Booklet-ICN906765.pdf

Texas Prosecutors are Aggressively Targeting Criminal Home Health Fraud

(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 provided.  Notably, 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?

(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:  https://www.aetna.com/about-us/aetna-facts-and-subsidiaries/aetna-facts.html

[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

(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 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?

(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.

Conclusion:

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:

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 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 10^th 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: http://www.tsbde.texas.gov/documents/laws%20%26%20rules/2017-18DPA.pdf

[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.  https://www.sunset.texas.gov/public/uploads/files/reports/Dental%20Examiners%20Self-Evaluation%20Report.pdf

[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 24^th, 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 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.

[1] https://www.hhs.gov/opioids/sites/default/files/2018-09/opioids-infographic.pdf

[2]https://www.forbes.com/sites/danmunro/2015/04/27/inside-the-35-billion-addiction-treatment-industry/#3d256aaf17dc

[3]https://www.nbcnews.com/feature/megyn-kelly/florida-s-billion-dollar-drug-treatment-industry-plagued-overdoses-fraud-n773376

[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.

[6] https://www.congress.gov/bill/115th-congress/house-bill/6/text#toc-HB10AD8D0FD9C456F81EE0083634020CB

[7] http://jalm.aaccjnls.org/content/jalm/1/4/410.full.pdf

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

(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:

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 28^th 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 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] https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review/Home_Health_Medical_Review_Update.html

[2] https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Pre-Claim-Review-Initiatives/Overview.html

[3] https://www.cms.gov/Research-Statistics-Data-and-Systems/Computer-Data-and-Systems/Electronic-Clinical-Templates/Downloads/Home-Health-Services-Plan-of-Care-Certification-Template-Draft-20180709-R20.pdf

[4] https://www.cms.gov/research-statistics-data-and-systems/monitoring-programs/medicare-ffs-compliance-programs/recovery-audit-program/

[5] https://www.cms.gov/Research-Statistics-Data-and-Systems/Computer-Data-and-Systems/Electronic-Clinical-Templates/Downloads/Home-Health-Services-F2F-Encounter-Template-Draft-20180709-R20.pdf

https://www.cms.gov/Research-Statistics-Data-and-Systems/Computer-Data-and-Systems/Electronic-Clinical-Templates/Downloads/Home-Health-Services-F2F-Encounter-Template-Draft-20180214-R10d.pdf

[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. 48818.  September 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 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 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 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.

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