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2014 HCFAC Report — $27.8 Billion Recovered for Medicare

Fraud(March 23, 2015):  Last week, the Department of Justice (DOJ) and Department of Health and Human Services (HHS) announced that they had recovered more than $27.8 billion to the Medicare Trust Fund due to the efforts of the Health Care Fraud and Abuse Control Program (HCFAC). As set out in the 2014 HCFAC Report, in Fiscal Year 2014, the government’s health care fraud prevention and enforcement efforts recovered $3.3 billion in taxpayer dollars from individuals and companies that attempted to defraud federal health programs. In particular, the agencies recovered $7.70 for every dollar spent to fight health care related fraud and abuse. This figure represented the third highest dollar amount on record and represents about $2 more than the average return on investment in the HCFAC program since its creation in 1997.

As HHS Secretary Sylvia M. Burwell noted:

“[e]liminating fraud, waste and abuse is a top priority” for HHS. “These impressive recoveries for the American taxpayer demonstrate our continued commitment to this goal and highlight our efforts to prosecute the most egregious instances of health care fraud and prevent future fraud and abuse. New enrollment screening techniques and computer analytics are preventing fraud before money ever goes out the door. And together with the continued support of Congress and our partners at the Department of Justice, we’ve cracked down on tens of thousands of health care providers suspected of Medicare fraud – all of which are helping to extend the life of the Medicare Trust Fund.”  

DOJ Attorney General Eric Holder expanded upon Secretary Burwell’s comments:

“As the innovative and collaborative work of the [HCFAC] proceeds, more taxpayer money is being recovered, more criminals are facing justice, and more fraud is being punished, prevented, and deterred… [t]he extraordinary return on investment we’ve obtained speaks to the skill, the tenacity, and the inspiring success of the hardworking men and women fighting on behalf of the American people. And with these outstanding results, we are sending the unmistakable message that we will not waver in our mission to pursue fraud, to protect vulnerable communities, and to preserve the public trust.”

The DOJ and HHS have been operating under a two-pronged strategy to fight waste, fraud and abuse in the federal health care programs. Under new powers granted by the Affordable Care Act (ACA), these agencies have moved away from the traditional “pay and chase” methods for targeting fraudsters. Instead, they are not working towards preventing health care fraud and abuse in the first place. Furthermore, the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint operation run by the HHS Office of the Inspector General (OIG) and DOJ, is changing how the federal government combats certain types of health care fraud. HEAT units are investigating potential fraud cases using real-time data analysis instead of a prolonged subpoena and account analyses. This new approach has resulted in significantly shorter periods of time between fraud identification, arrest, and prosecution.

Government agencies have also utilized the federal False Claims Act (FCA) as another vital tool to combat waste, fraud and abuse. According to the 2014 HCFAC Report, since January 2009, DOJ has recovered more than $15.2 billion in settlements and judgments from civil cases involving health care fraud and false claims against federal health care programs like Medicare and Medicaid.  As detailed on the 2014 HCFAC Report, in the past year, the DOJ obtained $2.3 billion in cases involving health care fraud.

Moreover, the Centers for Medicare & Medicaid Services (CMS) has adopted its own set of preventive measures to combat waste, fraud and abuse in the health care programs. From the outset, CMS has implemented vital safeguards to prevent illegitimate providers from enrolling in and billing the Medicare program. The ACA also requires CMS to revalidate all existing 1.5 million Medicare suppliers and providers under new and updated screening requirements. This has led to the deactivation of at least 470,000 enrollments and revocation of nearly 28,000 enrollments to prevent certain providers from re-enrolling and billing the Medicare program. CMS also issued a regulation that requires prescribers of Medicare Part D drugs to enroll in Medicare and undergo screening. Another ongoing preventative measure has been CMS’ ongoing moratoria on the enrollment of new home health or ambulance service providers in six health care fraud “hot spots”: Miami, Chicago, Dallas, Houston, Detroit and Philadelphia (which includes some counties in New Jersey). CMS believes that this extension will allow it to continue its actions to suspend payments or remove providers from the program before allowing new providers into potentially over-supplied markets.

The HCFAC annual report is available at www.oig.hhs.gov/publications/hcfac.asp. We applaud the government’s efforts to combat waste, fraud and abuse in the federal health care programs. As these latest updates demonstrate, Medicare and Medicaid fraud prevention efforts will continue to expand. With this, providers should also be aware that there will likely be an increase in the number of FCA cases that are filed.   FCA cases have become increasingly important as the Justice Department looks to stop the rising tide of fraud and abuse in the nation’s healthcare system. Thus, health care providers and suppliers should ensure that their compliance programs are effective to identifying and deterring potential violations of the FCA and other laws.

Saltaformaggio, RobertRobert Saltaformaggio, Esq., serves as an Associate at Liles Parker, Attorneys & Counselors at Law.  Liles Parker attorneys represent health care providers around the country in connection with Medicaid audits by federal and state agencies and CMS-engaged specialty contractors.  The firm also represents providers in connection with HIPAA Omnibus Rule risk assessments, privacy breach matters, State Licensure Board inquiries and regulatory compliance reviews.  For a free consultation, call Robert at:  1 (800) 475-1906

Liles Parker Welcomes Paul Weidenfeld to the Firm

June 21, 2011 by  
Filed under Firm News

Paul Weidenfeld has joined Liles Parker.(June 15, 2011):   Liles Parker is pleased to announce that attorney Paul Weidenfeld has joined the Firm as “Counsel” at the Firm.  In joining the Firm, Mr. Weidenfeld has further broadened the scope of Liles Parker’s litigation expertise. Prior to entering private practice, Mr. Weidenfeld served as “National Health Care Fraud Coordinator” at the Executive Office for U.S. Attorneys (EOUSA), an agency of the U.S. Department of Justice.  Notably, Robert W. Liles, Managing Partner at the Firm had previously served as the very first “Health Care Fraud Coordinator” at EOUSA.  Mr. Liles was appointed to this position shortly after the passage of HIPAA.  With the recruitment of Mr. Weidenfeld, Liles Parker is the only law firm in the country with two senior attorneys who served in this prestigious position at the U.S. Department of Justice.  Mr. Weidenfeld has extensive experience representing health care providers in administrative, civil and criminal cases around the country.  Additionally, Mr. Weidenfeld has more than 15 years of experience working with False Claims Act cases.

Prior to being detailed to EOUSA, Mr. Weidenfeld served as an Assistant United States Attorney (AUSA) in the  Eastern District of Louisiana (EDLA).  While working as an AUSA, Mr. Weidenfeld served in a number of prestigious positions at the EDLA.  These positions included serving as Deputy Chief of the Civil Division,  Affirmative Civil Enforcement Coordinator and the office’s Health Care Fraud Coordinator.

Mr. Weidenfeld’s litigation experience is quite extensive.  He has tried more than 50 cases and handled more than 25 appellate arguments before virtually every Federal and State Court to include the United States Supreme Court.  Commenting on Mr. Weidenfeld’s anticipated contributions, the Firm’s “Litigation Practice Leader,” Leonard Schneider commented:

“We are thrilled to have Paul at our side.  His extensive litigation experience will greatly expand our litigation capabilities.  Paul has a stellar reputation as a litigator and as a tactician.  We are looking forward to working with him.”

Mr. Weindenfeld holds a B.A. from Tulane University and J.D. from Loyola University in New Orleans.  He is admitted to practice in the State of Louisiana.  His application for admission in the District of Columbia is pending.

Please join us in welcoming Paul to the Firm.  He can be reached at: pweidenfeld@lilesparker.com His cell phone number is: (703) 258-5075.

Liles Parker attorneys represent health care providers around the country in connection with audits and investigations by Medicare contractors and law enforcement.  Need assistance?  Please give us a call for a complimentary initial consultation.  Paul Weidenfeld can be reached by cell at: (703) 285-5075 or at the office: (202) 298-8750.

 

Predictive Modeling: ZPICs Using Data Mining to Identify Medicare Fraud

ZPICs Are Using Predictive Modeling and Data Mining to Target Medicare Providers(April 15, 2011): Over the last decade, the Centers for Medicare and Medicaid Services (CMS) and its contractors (Zone Program Integrity Contractors (ZPICs), Program Safeguard Contractors (PSCs) and Recovery Audit Contractors (RACs)),  have steadily assembled an extensive database of the coding and billing practices of Medicare providers around the country.  Analyzing this data, contractors have been able to identify the profile of a “typical” provider for each specialty.  With this information, Medicare contractors are better able to identify changes in the coding and / or billing habits of a particular provider.   Providers whose billing practices are significantly different from those of their peers may also be easily identified.  The purpose of this article is to provide an overview of the government’s current use of  “data mining”  and “predictive modeling”  techniques.

I. Introduction:

CMS’s computerized database of claims and services billed to the Medicare program covers a comprehensive record of the bills submitted by health care providers for payment.  Over the years, Medicare contractors and law enforcement have steadily refined their ability to analyze this enormous amount of quantitative data.  In addition to assisting with the government’s efforts to estimate future growth in the size of the Medicare program, this database has enabled  Medicare contractors and law enforcement to employ highly sophisticated data mining techniques, thereby identifying (1) health care providers whose current coding and billing actions appear to have deviated from their prior practices, and (2)  Medicare providers whose coding and / or billing actions are significantly different from those of their peers.  Typical factors considered when using data mining techniques for targeting purposes have included, but are not limited to:

A Medicare provider’s specific area of practice.

A Medicare provider’s practice location.

The types and frequency of health care services or supplies billed to Medicare.

The relative size of a provider’s practice, clinic or health care related organization (based on the number of Medicare billing providers employed).

Through an examination of these factors or data elements, Medicare contractors and law enforcement have been able to identify health care providers whose coding and / or billing practices make them “outliers” when their actions are compared to similarly-situated Medicare providers.  Once a health care provider has been identified as an “outlier,” further action may be taken. Typical “data mining” actions taken by ZPICs, PSCs,, RACs and / or law enforcement have historically included:

  • An unannounced site visit by the ZPIC or PSC to the Medicare provider’s practice location.
  • Sending a request for supporting documentation related to a limited number of claims (often less than 10, this type of review is generally referred to as a “Probe Audit”).
  • Sending a request for supporting documentation related to 30 claims or more (these claims are often then used by the ZPIC or PSC as a “sample” in order to calculate an alleged overpayment based on extrapolated damages).
  • Sending a demand letter for an alleged overpayment based on an “automated” review of the data conducted by a RAC or ZPIC.
  • Using “data mining” to identify outlier’s whose billing practices warrant to initiation of an investigation by law enforcement.

II. The Use of “Data Mining” to Identify Post-Payment Improper Practices:

While Medicare contractors such as RACs, PSCs and ZPICs long utilized post-payment data mining to identify providers who appear (based on their assessment of the data) to have likely engaged in improper billing activities, the regular use of data mining by the Department of Justice to identify criminal targets is a fairly recent practice.  As Lanny A. Breuer, Assistant Attorney General of the Department of Justice’s (DOJ’s) Criminal Division indicated last August:

“In 2007, the Criminal Division of the Justice Department refocused our approach to investigating and prosecuting health care fraud cases. Our investigative approach is now data driven: put simply, our analysts and agents review Medicare billing data from across the country; identify patterns of unusual billing conduct; and then deploy our “Strike Force” teams of investigators and prosecutors to those hotspots to investigate, make arrests, and prosecute. And as criminals become more creative and sophisticated, we intend to use our most aggressive investigative techniques to be right at their heels.” (emphasis added).

As law enforcement has readily acknowledged, postpayment billing data is being effectively utilized to “identify patterns of unusual billing conduct.”   Using data mining as a targeting tool, the government is able to quickly focus its investigative and audit resources on specific providers whose coding / billing practices fall outside the scope of what would normally be expected.

III.  The Use of Predictive Modeling to Minimize Wrongdoing:

While identifying improper billing practices after-the-fact has proven enormously helpful, law enforcement has also taken  steps to identify problem providers much sooner in the process, thereby minimizing the amount of improper billing that may be submitted to Medicare for payment.  As HHS Secretary Kathleen Sebelius stated on March 15, 2011, during the joint HHS / DOJ “Detroit Fraud Prevention Summit,” HHS is moving away from the “old pay and chase model.”  According to Secretary Sebelius:

“. . . Instead of the old ‘pay and chase’ model, we’re getting proactive.

Late last year we issued a solicitation for state-of-the-art analytic tools to help predict and identify fraudulent claims as soon as they are submitted, so we can stop payment before it goes out the door.

These are the same type of predictive modeling tools that banks and insurance companies use to identify potential fraud before it occurs. They are how your credit card company can raise the alarm if they see a dozen flat-screen televisions charged to your card in one day. . ..” (emphasis added).

While post-payment claims data analyses will likely play a role in identifying overpayments, the government is serious about stopping health care fraud as soon possible in the process.  While the government cannot “predict” wrongdoing before it happens, based on a complex analysis of various factors, it can effectively identify wrongdoers so quickly that the amount of improper claims paid by the government can be dramatically reduced.

IV.  Provider Concerns:

Many providers are concerned that the government’s heavy reliance on predictive measures such as data mining to identify targets may subject a provider to an unjustified audit or investigation.  Moreover, there is a concern that data mining might create an unwarranted presumption that a Medicare provider has engaged in improper billing practices.  Unfortunately, even if ultimately shown to be incorrect, a provider can spend an enormous amount of money defending itself in connection with a post-payment claims audit.  Providers placed on pre-payment review as a result of data mining can be especially hard-hit.  It is not at all unusual for providers to remain on pre-payment review for six to twelve months (or even longer).  During this time period, cash-flow is interrupted and many providers find it almost impossible to remain in business.

V.  How to Avoid Being a Target: 

In today’s environment of sophisticated data mining, it is essential that Medicare providers have a clear picture of how their coding and billing practices compare to those of their peers.  To be clear, both Medicare contractors and law enforcement recognize that a provider’s practices may differ in one aspect or another from those of their peers.  Moreover, those differences can result in billing practices which might make a provider appear to be an “outlier.”   There are a number of companies who publish benchmarking charts which make it relatively easy for a physician or other provider to compare their billing practices to that of their peers.

To be clear, just because a provider’s coding and billing practices differ from those of their peers (in the same specialty area), does not necessarily mean that a provider’s practices are improper. In recent years, we have seen providers who were targeted by a PSC or ZPIC precisely because their utilization rates of certain codes exceeded those of their peers.   In at least one case, we found that a provider was recognized as an “expert” by his peers and often received highly-complex referrals by other Medicare providers. As a result, the number of highly complex Evaluation and Management (E/M) reviews conducted exceeded those of similarly situated providers.  Having said that, if a provider were to find that its billing practices did not match of its peers, it could conceivably find that its understanding of the coding requirements was incorrect and that remedial training was immediately needed.

In either case, the bottom line is clear – all providers have an obligation to try and ensure that services billed to Medicare meet applicable statutory and regulatory requirements governing coverage and medical necessity.  If your organization is subjected to an audit, it is essential that you determine whether your billing practices fully comply with the rules.  If so, you must be prepared to explain to Medicare contractors or law enforcement why the anomalies identified through data mining or predictive modeling are not evidence of fraud or overpayment.  Providers facing this situation should work with experienced legal counsel to ensure that the arguments to be presented fully address the government’s concerns.  Failure to do so may result in an expansion of the government’s audit.

Robert W. Liles defends health care providers in Medicare auditsRobert W. Liles, J.D., M.B.A., M.S., serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law. Liles Parker attorneys and staff have extensive experience representing health care providers in connection with Medicare contractor audits and / or investigations.  Should you find that your organization is facing a ZPIC, PSC or RAC audit, please give us a call for a complimentary consultation regarding your case.  Call us at: 1 (800) 475-1906.       

2011: The Year of Compliance – Medicare Payment Suspension Actions

A Medicare payment suspension action can destroy your practice(January 26, 2011): Medicare payment suspension action can prove disastrous for your practice or home health agency.  How did we get to this point?  The recent debate over healthcare in this country has drawn attention to healthcare costs as well as the relationship between healthcare providers and the Federal government. With healthcare costs steadily on the rise, the government has been searching for ways to contain costs in Federal and State healthcare programs. These cost control efforts have resulted in a substantial focus on reducing healthcare fraud, which the federal government estimates could account for up to 10% of the country’s annual healthcare expenditures (or approximately $226 billion per year).[1] While the government has always possessed the authority to sanction providers for healthcare fraud and related activities, the newly-enacted Health Care Reform legislation (collectively referred to as the “Affordable Care Act” (ACA)) dramatically expands these regulatory powers. One of the most potent anti-fraud tools available to the government- specifically the Center for Medicare and Medicaid Services (CMS)- is the suspension of payments to providers. This article will provide a brief overview of CMS’s Medicare suspension authority and the requisite procedures, discuss the new relevant provisions of the ACA, and then conclude with some advice for providers seeking to avoid suspension actions.

 I.   CMS’ Medicare Payment Suspension Authorities and Procedures:

Historically, CMS has been empowered to suspend payments to Medicare providers in three circumstances:

Fraud or willful misrepresentation;

An overpayment of an undetermined amount has been identified; or

Payments that have been made (or are scheduled to be made) may be incorrect. (42 C.F.R. §405.371(a)(1).

Suspension actions can be initiated several ways.  These include: (1) Suspensions requested by a Medicare contractor (generally recommended by a Zone Program Integrity Contractor (ZPIC) or Program Safeguard Contractor (PSC)), (2) Suspensions initiated by CMS, or (3) Suspensions requested by law enforcement (such as the Office of Inspector General (OIG) or the Department of Justice (DOJ).  Typically, the ZPIC or PSC would then provide CMS with a draft Medicare suspension notice, along with a summary of the information upon which the Medicare suspension action has been based.  The suspension notice to the health care provider must include

 The specific reason for the Medicare suspension;

 The extent of the Medicare suspension (such as all claims, certain types of claims, 100% suspension, or partial suspension);

A statement that the Medicare suspension is not appealable;

A statement that CMS has approved of the Medicare suspension action; 

The date on which the Medicare suspension will begin;

The items and services subject to the Medicare suspension;

The expected duration of the Medicare suspension action;

A statement that the provider may submit a rebuttal within 15 days of the Medicare suspension letter.

Information on where the provider is to mail the rebuttal.  (See generally, CMS, MPIM § 3.9.2.2.2).

 A.        CMS’ Role in Approving a Medicare Suspension Action.

Once a Medicare suspension letter has been drafted, CMS will review it and determine whether the provider should be notified before or after the effective date of the Medicare payment suspension. If a provider is targeted for Medicare payment suspension because of fraud, deliberate misrepresentation, or harm to Medicare trust funds, then the provider will be notified of the Medicare payment suspension on or after the effective date.  Health care providers who are suspended for all other reasons are notified at least 15 days prior to the suspension taking effect.  Notably, the OIG found that only three of the providers suspended during this period were given advance notice.  In other words, it appears that all but three providers were suspended with no advance notice, and were likely suspected of fraud or willful misrepresentation.

 B.        Opportunity to Appeal a Medicare Payment Suspension Action.

Notably, there is not an administrative appeals mechanism available for providers to challenge a suspension action. At most, a provider can submit a “rebuttal” letter to CMS detailing why the proposed Medicare payment suspension should not take effect or should be lifted. A rebuttal letter must be submitted within 15 days of the suspension notice. CMS contractors will then review the provider’s rebuttal, draft a response, and submit the proposed response (along with the provider’s rebuttal) to CMS for approval.  From a practical standpoint, it has been our experience that CMS rarely changes its position and cancels the planned Medicare suspension action.

 C.        Length of Medicare Payment Suspensions.

The length of a Medicare suspension of payments period is usually 180 days, but this can be extended under certain circumstances.

D.       Having a Medicare Payment Suspension Action Lifted.

During the suspension period, CMS contractors will request that the provider submit medical records relevant to any suspect claims being examined by CMS. A Medicare contractor (typically a ZPIC or PSC) will then analyze these medical records in order to determine the amount of any improper payments made to the provider, including overpayments. Once the overpayment has been calculated, a provider’s Medicare Administrative Contractor will issue a demand letter to the provider requesting a refund of the overpayment amount. In some instances, once CMS has ascertained the nature and extent of any overpayment, the suspension action will be lifted.

Health care providers may continue to submit claims during a suspension period, but payment action for these claims will not be taken until the ZPIC / PSC can determine the nature and amount of any overpayment that may be owed. Any claims found to qualify for coverage and payment are usually used to offset the amount of the overpayment determined by the ZPIC / PSC.  Excess funds are then distributed to the provider.

 II.  Recent Analysis of Prior Medicare Payment Suspension Actions Taken: 

On November 1, 2010, the OIG released a report for CMS entitled The Use of Payment Suspensions to Prevent Inappropriate Medicare Payments.[3] The goal of this report was to evaluate CMS’ use of suspension actions taken in 2007 and 2008 and  assess CMS’ procedures for implementing payment suspension actions. OIG analyzed 253 payment suspensions made during these two years.

 A.        General Overview of Medicare Payment Suspension Actions Taken in 2007 and 2008.

The OIG found that 85% of the providers suspended in 2007 and 2008 were  Medicare Part B providers.  Additionally, 79% of these providers were located in four states: Florida, California, Michigan, and Puerto Rico.  They further found that CMS contractors generally complied with the suspension “notice” requirements set forth in CMS rules and regulations, providing all of the required elements in the suspension notice in 96% of the actions examined.  Notably, only 16% of the providers suspended submitted a “rebuttal” to the suspension notice.   Notably, the average length of time before CMS approved a proposed suspension was four calendar days, and more than half of these suspensions were extended. Notably, the report explained that many suspensions are extended because CMS contractors needed additional time to calculate overpayments for reasons ranging from delayed receipt of medical records[4] to the complexity of the analysis required.  As OIG found, the median overpayments assessed in connection with payment suspension actions taken were quite large.  The OIG found the following:

Overpayments Assessed in Connection with Medicare Payment Suspension Actions Taken During 2007 and 2008 

 

Type of Health Care Provider

 

   

 Number of Providers Suspended

 

Median Alleged Overpayment Assessed

 

Part A

 

 

21

 

$1,645,026

 

Part B – DMEPOS

 

 

57

 

$1,237,153

 

Part B –non-DMEPOS

 

 

65

 

$1,072,338

B.        Reasons for Medicare Payment Suspension Actions.

OIG reported that the great majority of suspensions that took place between 2007 and 2008 “exhibited characteristics that suggest fraud.” In fact, payment suspensions taken during this period were almost all used “as a tool to fight fraud.” The OIG based this conclusion on the following:

99% of suspension notices were sent to the provider on or after the effective suspension date, indicating that fraud was a consideration in the suspension action.

74% of suspended providers supplied information suggesting questionable billing patterns, such as spikes in multiple claims submitted for the same beneficiary or extensive services provided within a very short time frame.

63% of suspensions involved complaints or information from beneficiaries raising concerns about services they never received or that were medically unnecessary.

 C.        CMS Guidance on Medicare Payment Suspensions Has Been Inconsistent.

The OIG noted some documents supplied by the CMS to provide guidance on payment suspensions are inconsistent or incomplete. Some information that the OIG identified as needing revision includes:

The CMS Program Integrity Manual (PIM) mandates that contractors requesting suspension submit to CMS a draft of the suspension notice along with “other supportive information” when requesting suspension. However, the manual fails to define or provide examples for the phrase “other supportive information.”

 The model suspension notice contained in the PIM has not been updated since 2000. Accordingly, the notice provides an incorrect summary of the suspension process.

The OIG report concluded that, based on the data reviewed, Medicare payment suspensions were used almost exclusively as a tool to fight fraud in 2007 and 2008. The report did not offer any recommendations, but it did note that the PPACA dramatically expanded CMS’s authority to suspend Medicare payments.

III.  Health Care Reform and Medicare Payment Suspensions:

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively referred to as the Affordable Care Act or “ACA”), was signed into law on March 23, 2010.  Among its provision, the ACA further expanded CMS’ ability to take payment suspension actions. In addition to the three suspension criteria discussed above, ACA now permitted CMS to suspend payments based on credible allegations of fraud unless there is good cause not to suspend such payments. The seemingly vague language and potentially broad scope of this rule has many providers concerned about the threat of payment suspensions.

 A.        Proposed Regulations.

The ACA requires the Secretary, HHS to prepare new regulations implementing the provisions of the ACA, including the new payment suspension rules.  On September 23, 2010, HHS issued a proposed regulation which defines a “credible allegation of fraud” as allegations from any source, including:

Fraud hotline complaints.

Claims data mining.

Provider audits.

Civil false claims cases.

Law enforcement investigations.

As set out in the Proposed Rule, an allegation is “credible” when it has an indicia of reliability.” Unfortunately, HHS does not supply any additional guidance as to the meaning of potentially vague terms, such as “source” or “indicia of reliability.” Indeed, HHS even appears to concede the ambiguity of these terms; the proposed regulation states “Many issues related to this definition will need to be determined on a case-by-case basis by looking at all the factors, circumstances, and issues at hand.”

This new regulation contains one important limitation, namely the “good cause” exception. Even in cases involving credible allegations of fraud, CMS may continue payments if there exists some good cause for doing so. In the proposed regulation, HHS gives several examples of what could constitute “good cause’ under this standard:

The possibility that payment suspension will alert a violator to an investigation or inquiry;

The possibility that payment suspension will expose whistleblowers or confidential sources;

Where payment suspension may jeopardize beneficiary access to necessary items or services;

Where remedies other than payment suspension available to CMS are more expeditions or effective in protecting Medicare funds; or

Where payment suspension would “not be in the best interests of the Medicare program.”

Aside from its broad sweep and built-in exception, this new credible allegation of fraud rule is distinct from the other bases for payment suspensions in three critical respects. To begin with, CMS is required to consult with OIG in determining whether a credible allegation of fraud exists. This collaboration is not required before CMS suspends payment on any other basis, and OIG has no formal role in imposing such suspensions. Additionally, as discussed above, the other suspension criteria have 180-day time limits (which, under certain circumstances, can be extended), while the credible allegation of fraud rule does not have any such time restrictions. Suspensions could remain effective indefinitely as OIG conducts its investigation into the fraud allegations. Finally, a payment suspension for a credible allegation of fraud may be lifted upon the resolution of the fraud investigation, which occurs when “a legal action is terminated by settlement, judgment, dismissal, or [dropped for lack of evidence].” Conversely, payment suspensions for other reasons are terminated upon refund of any assessed overpayment to CMS.

IV.  Recommendations for Providers:

Medicare payment suspensions can dramatically impact and disrupt a provider’s healthcare practice. Based on the report published by OIG and in consideration of the new regulations promulgated by HHS, below are some recommendations for avoiding suspension actions.

 A.        Engage Experienced Legal Counsel.

In light of both the seriousness and complexity presented, it is strongly recommended that providers facing a payment suspension action immediately engage experienced counsel.  As you will recall, almost all of the suspension actions pursued by Medicare contractors, OIG and DOJ involve allegations of fraud or deliberate misrepresentation.   Therefore, care should be taken to ensure that the rights of the health care provider and its staff are properly protected.

 B.        Submit a Rebuttal.

The OIG report noted that only 16% of providers suspended between 2007 and 2008 submitted a rebuttal to the suspension notification. While a rebuttal does not guarantee that CMS will not proceed with the suspension, it does give the provider an opportunity to explain any of the potential mistakes or errors that drew the attention of CMS. Additionally, it is critical to keep in mind that suspension actions are not appealable; once a suspension is imposed, there is no recourse for the provider. A rebuttal is a provider’s only opportunity to be heard prior to imposition of the suspension.

 C.        Timely Provide Medical Records When Requested by CMS.

As discussed above, once a suspension has been imposed CMS will request medical records from the provider in order to evaluate the related claims for any potential overpayments. In the OIG report, the authors noted that suspensions were often extended beyond the initial 180-day time period for a variety of reasons, one of which was the provider’s failure to timely submit medical records. It is possible that providers who comply with CMS medical records requests as soon as possible will see their cases resolved more quickly and their suspensions lifted without any extension. Additionally, providers should thoroughly organize medical records for complex cases so that CMS contractors can review the records more efficiently and therefore resolve the suspension action.

 D.        Credible Allegations of Fraud Can Originate from Practically Anywhere.

Because the proposed regulations regarding credible allegations of fraud are exceedingly broad and vague, it is difficult to supply guidance to providers concerned about compliance with this new rule. However, one important principle to keep in mind is that, under the definition proposed by HHS, a credible allegation can come from any source. This includes patients, employees, or other providers. Therefore, it is extremely important for providers to be conscientious so that their conduct does not give rise to any inferences of fraud.iles P

Robert W. Liles, JD, represents healthcare providers in Medicare payment suspension actionsRobert W. Liles and other Liles Parker attorneys have extensive experience representing health care providers in connection with a wide variety of administrative, civil and criminal health care fraud enforcement matters — including Medicare suspension of payment actions. Should you have questions regarding this article, please give us a call.  Initial consultations are free.  Robert can be reached at 1 (800) 475-1906.


[1] Federal Bureau of Investigation, Financial Crimes Report to the Public 2007, available at http://www.fbi.gov/stats-services/publications/fcs_report2007/.

[2] For example, if a government official is unable to complete an examination of information submitted by a suspended provider or the Department of Justice is investigating potential criminal charges or civil actions, then the suspension may be extended for 180 days. If OIG is considering administrative action against the provider- such as exclusion from participation in Medicare or the assessment of civil monetary penalties- then the suspension may be extended indefinitely.

[3] Center for Medicare and Medicaid Services, The Use of Payment Suspensions to Prevent Inappropriate Medicare Payments, Report No. OEI-01-09-00180 (Nov. 2010).

[4] The report states that 55% of suspended providers never provided CMS contractors with any medical records at all.

HEAT Investigations of Health Care Fraud in South Texas

January 7, 2011 by  
Filed under HEAT Strike Force

HEAT Investigations of Health Care Fraud are Increasing(January 6, 2011):  Three Houston-area residents, one of whom is a physician, were sentenced to prison on January 4th for their roles in a multi-million dollar durable medical equipment (DME) Medicare fraud scheme.  Each of the three defendants were also ordered to pay restitution to the Federal government, in amounts ranging from $29,052 to $1.4 million.

I.  HEAT Investigations are Increasing:

According to DOJ, a Houston-area DME company improperly billed Medicare for power wheelchairs and orthotic devices, beginning in 2003 and continuing until late 2009.  In addition to the three co-conspirators sentenced today, a total of eight other individuals were convicted for their participation in the fraudulent scheme.  One of the eight included the owner of the DME company. At trial, Federal prosecutors were able to show that a variety of fraudulent actions had been taken by members of the group, ranging from the payment of illegal kickbacks to the prescription of medically unnecessary devices.

II.  HEAT Investigations of Fraudulent Health Care Providers in South Texas are Increasing:

Notably, this was just the latest case investigated by members of the DOJ / HHS-OIG / MFCU Health Care Fraud Prevention and Enforcement Action Team (HEAT).  This strike force is responsible for investigating and prosecuting cases throughout South Texas.  As DOJ noted:

“Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 850 individuals who collectively have falsely billed the Medicare program for more than $2.1 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”

III.  Steps You Can Take to Reduce the Likelihood of a HEAT Investigation:

Both Federal and State investigators are aggressively targeting non-compliant providers.  South Texas providers who take the time to review and update their current Compliance Plan should also conduct a gap analysis to better ensure that their operational and billing practices fully comply with applicable statutory and regulatory requirements.  When is the last time that you have reviewed your medical documentation to ensure that you are fully documenting a patient’s medical need for care and treatment services?  Are your documentation practices consistent with the 1995 or 1997 Evaluation & Management guidelines?  Are any Local Coverage Determinations (LCDs) applicable to the claims you are reviewing?  Have you properly coded and billed the claims to be submitted to Medicare for payment?  If you cannot answer these questions in the affirmative, your claims are likely not ready to be audited!

Liles Parker attorneys have extensive experience representing health care providers in alleged Medicare overpayment and fraud cases.  Should you have questions about our services, give us a call for a free consultation.  We can be reached at 1 (800) 475-1906.

Compliance Risk Areas in 2011 for Your Organization.

Compliance Risk(December 31, 2010):  In case you missed it, Congress, President Obama and the healthcare regulators had a banner year with respect to regulatory activism in 2010.  Over the next several weeks we will be releasing a series of articles on our website addressing the compliance risk areas facing your organise dramatic changes and the compliance risks they present for your practice, clinic or health care business in 2011:

Compliance Risk Number 1:  Increased “HEAT” Activity and Enforcement:

Perhaps the greatest risk to consider in 2011 is the increase in targeted health care fraud enforcement efforts by the government’s Health Care Fraud Prevention and Enforcement Action Team (HEAT).  These teams are comprised of top level law enforcement and professional staff from the U.S. Department of Justice (DOJ), the Department of Health and Human Services (HHS), and their various operating divisions.  HEAT team initiatives have been extraordinarily successful in coordinating multi-agency efforts to both prevent health care fraud and enforce current anti-fraud initiatives.

As DOJ noted in September 2010, over the previous Fiscal Year, DOJ (including its 94 U.S. Attorneys’ Offices), HHS’ Office of Inspector General (HHS-OIG), and the Centers for Medicare and Medicaid Services (CMS), jointly accomplished the following:

  • Filed charges against more than 800 defendants.

  • Obtained 583 criminal convictions.

  • Opened 886 new civil health care fraud matters.

  • Obtained 337 civil administrative actions against parties committing health care fraud.

  • Through these efforts, more than $2.5 billion was recovered as a result of the criminal, civil and administrative actions handled by these joint agencies. 

President Obama’s FY 2011 budget request includes an additional $60.2 million in funding for the HEAT program.These funds will be used to establish additional teams and further fund existing investigations. Now, more than ever, it is imperative that you ensure that your Compliance Plan is both up-to-date and fully implemented.  Medicare providers are obligated to adhere to statutory and regulatory requirements and the government’s HEAT teams are aggressively investigating providers who fail to comply with the law.

Compliance Risk Number 2:  Zone Program Integrity Contractor (ZPIC) / Program SafeGuard Contractor (PSC) / Recovery Audit Contractor (RAC) Audits of Medicare Claims:

As you already know, private contractor reviews of Medicare claims are big business – one ZPIC was awarded a five-year contract worth over $100 million.  In 2011, we  should expect to see:

  • The number of ZPIC / PSC / RAC audits of Physician Practices, Home Health Agencies, Hospice Companies, DME Suppliers and Chiropractic Clinics will greatly increase in 2011.

  • The reliance of both contractors and the government on data mining will continue to grow.  Providers targeted will likely be based on utilization rates, prescribing practices and billing / coding profiles.

  • An increase in the number of Administrative Law Judge (ALJ) hearings in where ZPIC representatives choose to attend the hearing as a “participant.”  In these hearings, the ZPIC representative will likely aggressively oppose any arguments in support of payment that you present.

Are you ready for an unannounced / unanticipated site visit or audit?  When is the last time that you have conducted an internal review of your billing / coding practices?  Are you aware of the hidden dangers when conducting these reviews?  In 2011, your Compliance Officer may very well be your most important non-clinical staff member.  Physicians and other providers should work with their Compliance Officer to better prepare for the unexpected audit or investigation.

Compliance Risk Number 3: Electronic Medical Records:

Unfortunately, some early adopters of Electronic Medical Records (EMR) software are now having to respond to “cloning” and / or “carry over” concerns raised by ZPICs and Program SafeGuard Contractors (PSCs).  In a number of cases, these audits appear to be the result (at least in part) of inadequately designed software programs which generate progress notes and other types of medical records that do not adequately require the provider to document individualized observations.  Instead, the information gathered is often sparse and similar for each of the patients treated.  Take care before converting your practice or clinic to an EMR system.  Include your Compliance Officer in the selection and review process.

Compliance Risk Number 4:  Physician Quality Reporting Initiative (PQRI) Issues:

Under the Health Care Reform legislation passed last March. PQRI was changed from a voluntary “bonus” program to one in which penalties will be assessed if a provider does not properly participate.  As of 2015, the penalty will be 1.5% and will increase to 2.0% in 2016 and subsequent years. Additionally, questions about the use of PQRI date in “Program Integrity” targeting remain unanswered.  Once again, it is essential that your Compliance Officer provide guidance to your staff regarding this program and its potential impact.

Compliance Risk Number 5:  Medicaid Integrity Contractors (MICs)  and Medicaid Recovery Audit Contractors (MDRACs):

In recent months, we have seen a marked increase in the number of MIC inquiries and audits initiated in southern States.  Notably, the information and documentation requested has often been substantial.  Medicaid providers must now also contend with MDRACs.  As a result of health care reform, MDRACs are now mandatory in every State and are may initiate reviews and audits as soon as March 2011.   Compliance Officers should review their current risk areas and ensure that Medicaid coding and billing activities are actively monitored to better ensure statutory / regulatory adherance.

Compliance Risk Number 6:  HIPAA / HITECH Privacy Violations:

Failure to comply with HIPAA can result in civil and / or criminal penalties. (42 USC § 1320d-5).

  • Civil Penalties – A large retail drug store company was recently fined $2.25 million for failure to properly dispose of protected information.

  • Criminal Penalties – Earlier this year, a physician in Los Angeles, CA, was sentenced to four months in prison after admitting he improperly accessed individual health information.

As of mid-2010, there had been 93 breaches affecting 500 or more individuals.  The total number of individuals whose information was disclosed as a result of these breaches was estimated at over 2.5 million.  Out of the 93 breaches, 87 involved breach of hard copy or electronic protected health information (about 1/4 involved paper records and 3/4 involved electronic records. The vast majority of the 93 breaches involved theft or loss of the records.  Many of these thefts could have been avoided with appropriate security.  The government is serious about privacy and your practice, and in 2011 you will likely see increased HIPAA / HITECH enforcement.  Your clinic or health care business must take appropriate steps to prevent improper disclosures of health information.

Compliance Risk Number 7:  Increased Number of Qui Tams Based on Overpayments:

Section 6402 of the recent Health Care Reform legislation requires that all Medicare providers, (a) return and report any Medicare overpayment, and (b) explain, in writing, the reason for the overpayment.

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

From a “risk” standpoint, this change is enormous.  Disgruntled employees try to file a Qui Tam  (“whistleblower”) lawsuit based on a provider’s failure to return one or more Medicare overpayments to the program in a timely fashion.  While the government may ultimately choose not to intervene in a False Claims Act case based on such allegations, a provider could spend a significant amount defending the case.  Providers should ensure that billing personnel understand the importance of returning any overpayments identified as quickly as possible.

Compliance Risk Number 8:  Third-Party Payor Actions:

Third-party (non-Federal)  payors are participating in Health Care Fraud Working Group meetings with DOJ and other Federal agents.  Over the last year, we have seen an increase in the number of “copycat” audits initiated by third-party payor “Special Investigative Units” (SIUs).  Once the government has announced the results of a significant audit, the third-party payor considers the services at issue and reviews whether it may have also been wrongly billed for such services.  If so, their SIU opens a new investigation against the provider.

Compliance Risk Number 9:  Employee Screening:

With the expansion of the permissive exclusion authorities, more and more individuals will ultimately be excluded from Medicare.  As we have seen, HHS-OIG is actively reviewing whether Medicare providers have employed individuals who have been excluded.  In one recent case, HHS-OIG announced that it had assessed significant civil monetary penalties against a health care provider that employed seven individuals who the provider “knew or should have known” had been excluded from participation in Federal health care programs. These individuals were alleged to have furnished items and services for which the provider was paid by Federal health care programs.  All providers should periodically screen their staff against the HHS-OIG and GSA databases to ensure that their employees have not been excluded from participation in Federal Health Benefits Programs.

Compliance Risk Number 10:  Payment Suspension Actions:

Last, but not least, we expect the number of payment suspension actions to increase in 2011.  In late 2010, Medicare contractors recommended to CMS that this extraordinary step be taken against providers in connection with a wide variety of alleged infractions.  Reasons given for suspending a provider’s Medicare number included, but were not limited to: (1) the provider failed to properly notify Medicare of a change in location, (2) the provider allegedly engaged in improper billing practices, and (3) the provider failed to fully cooperate during a site visit.

As each of these compliance risks reflect, health care providers are expected to fully comply with a wide myriad of Medicare and Medicaid statutory and regulatory requirements.  Moreover, the failure to meet these obligations can subject a provider to penalties ranging from suspension from the program to criminal prosecution.  Providers must take compliance seriously if they hope to thrive in 2011.

Robert W. Liles defends health care providers in Medicare auditsRobert W. Liles, J.D., represents healthcare providers and suppliers around the country in connection with Medicare and Private payor audits.  Liles Parker attorneys have extensive experience working on compliance related matters and defending providers in connection with allegations of one or more alleged violations of regulatory requirements. Should you have questions regarding these and other issues, give us a call for a free consultation.  We can be reached at 1 (800) 475-1906.

HEAT Strike Force Enforcement Takes an International Turn

HEAT Strike Force Enforcement Efforts are Expanding(October 17, 2010):  Medicare’s HEAT Strike Force is actively tracking down wrongdoers. The FBI has announced the arrest of 73 defendants, a number of which are allegedly members of an international organized crime organization, as part of one of the largest criminal health care fraud cases ever brought.  It is estimated that these individuals are responsible for the illegal submission of over $163 million in fraudulent Medicare claims.  As  the FBI’s Press Release reflects:

 “. . .the defendants allegedly stole the identities of doctors and thousands of Medicare beneficiaries and operated at least 118 different phony clinics in 25 states for the purposes of submitting Medicare reimbursements.

 As the FBI noted, the schemes employed by this group included the submission of fraudulent claims for medically unnecessary treatments and services to the Medicare program for payment by these “phantom clinics.”  Indictments covering these defendants were issued in five states, California, Georgia, New Mexico, New York, and Ohio. Commenting on the multi-agency cooperation involved, the Press Release notes that:

“Today’s arrests are an example of the FBI’s ability to conduct cross-program, multi-divisional investigations targeting a national level threat. In recent years, the department has undertaken a series of steps to modernize its organized crime program and enable federal law enforcement to take a unified approach to combating international organized crime. The Attorney General’s Organized Crime Council brings together the leadership of the FBI and eight other federal law enforcement agencies or offices with the department’s prosecutors, focusing high-level attention on these issues. The IOC-2 provides support in the form of information and intelligence to the member agencies that enhance efforts to identify, penetrate and dismantle the most dangerous organized crime groups through investigations and prosecutions. The creation of the International Organized Crime Targeting Committee and the Top International Criminal Organizations Target (TICOT) List, directs investigators and prosecutors to concentrate their limited resources on those international organized crime groups that pose the greatest threat to the United States. The department’s Criminal Division, through the Health Care Fraud Unit, Organized Crime and Racketeering Section, and the Asset Forfeiture and Money Laundering Section, has created new training programs to educate investigators and prosecutors on the intricacies of international organized crime and financial investigations.” (emphasis added).

Commentary: As this case reflects, the ease and extraordinary profits which can be generated from health care fraud is more than enough incentive for international organized crime syndicates to move into this area.  With the uncovering of this scheme, we should fully expect that DOJ, HHS-OIG and the HEAT Strike Force will continue to investigate these relationships.

Liles Parker attorneys represent health care providers around the country in administrative, civil and criminal health law related matters and cases.  Please call us at 1 (800) 475-1906 for a free consultation.

South Texas Home Health Fraud Case Results in Nurse Prosecution

October 9, 2010 by  
Filed under Home Health & Hospice

South Texas home health fraud case results in a nurse prosecution.(October 9, 2010):  The U.S. Attorney’s Office for the Southern District of Texas recently issued a Press Release announcing the conviction of a South Texas nurse who worked for a home health company. She allegedly admitted falsifying and forging encounter forms used when providing care for Medicare beneficiaries. This case is merely the latest example of South Texas home health fraud prosecuted by federal authorities.  More specifically, the nurse reportedly falsified information such as:

“. . .areas dealing with the beneficiary’s blood pressure, pulse rate, temperature, cardiac and respiratory status, homebound status and the medical supplies purportedly used during the visit.”

As the government’s release further notes, the nurse also allegedly admitted to forging beneficiary signatures on the bottom of the forms.  Sentencing is scheduled for next January.  She reportedly faces up to five years in Federal prison and a criminal fine of up to $250,000.

I.  South Texas Home Health Fraud Cases are Actively Prosecuted by Federal Authorities:

While few facts regarding how this conduct was uncovered have been disclosed by the government, home health companies in the Valley should take note of the fact that Medicare providers in South Texas (especially home health agencies, hospices and DME suppliers) remain under considerable scrutiny by ZPICs, OIG, the State MFCU, the FBI and DOJ.  South Texas home health fraud cases have regularly been prosecuted by the U.S. Attorney’s Office for the Southern District of Texas.

Under Health Care Reform’s mandatory compliance provisions, an effective Compliance Program will soon be required of all providers.  While many home health companies already have Compliance Programs in place, the question to be asked is simple:  Would instances of improper billing, such as those outlined above, be disclosed as part of your normal Compliance Program internal audit and monitoring process?  If not, you have a problem.

II.  Final Remarks:

We recommend that you review your current compliance policies and procedures to better ensure that problems can readily be identified and fixed.  Having said that, take care when engaging consultants to review your agency or practice.  To the extent that serious problems are identified, the information learned may not be privileged.  As a result, should the government investigate your company, you may be forced to disclose negative reports and other findings that your consultants have issued — essentially turning these internal audit documents into a “roadmap” for the prosecution.  A better course is for you to work through your attorney.  Have your attorney directly engage the consultant and supervise the review.  That way, the report will be issued to your legal counsel.  You may then at least arguably assert that any reports are privileged.

Robert W. Liles defends South Texas health care providers in Medicare audits and investigations.Robert W. Liles, J.D., grew up in South Texas and now serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law. Liles Parker attorneys represent home health agencies, hospices and other Medicare providers throughout the country.  Our staff has extensive experience responding to ZPIC audits and other health care fraud investigations.  Call us at: 1 (800) 475-1906 for a free consultation.

Robert W. Liles Invited to Speak at the WDTX DOJ Working Group for Health Care Fraud Meeting

September 12, 2010 by  
Filed under Firm News

Robert Liles has been asked to speak at the WDTX DOJ Working Group meeting(September 12, 2010):  Robert W. Liles, Managing Partner at Liles Parker, has been asked to serve as the main speaker at the quarterly DOJ Working Group conference sponsored by the U.S. Attorney’s Office for the Western District of Texas.  The Working Group consists of Federal civil and criminal Prosecutors, FBI agents, HHS-OIG agents and investigators, MFCU agents and investigators, ZPIC auditors and Investigators and representatives of the MAC responsible for processing Part A, Part B and DME Medicare claims.  The session will focus on changes to the False Claims Act, the Federal Anti-Kickback Statute and the Health Care Fraud Statute as a result of the recent enactment of the Health Care Reform Act last March.   Mr. Liles will also discuss the concerns of health care providers with current enforcement initiatives.

Since 2001, Mr. Liles has worked in private practice, representing the interests of health care providers in administrative actions (such as ZPIC audits of Medicare claims), civil cases (such as False Claims Act cases), and criminal matters (such as Anti-Kickback allegations).  Prior to entering private practice, Mr. Liles worked as an Assistant U.S. Attorney in the Southern District of Texas.  In early 1997, he was selected to serve as the nation’s first National Health Care Fraud Coordinator for the Executive Office of United States Attorneys in Washington, D.C.

Prior to entering law, Mr. Liles worked for many years in the health care industry.  He received a Master’s in Health Care Administration from Trinity University in 1985.  Trinity is recognized as one of the foremost universities in the country for educating and training future hospital administrators.  In addition to an M.H.A., Mr. Liles also holds an M.B.A.

Mr. Liles’ varied background provides a unique perspective of both the health care industry and the needs and concerns of health providers.

Liles Parker has an office in San Antonio, Texas.  Our attorney in San Antonio is Rebecca Reed.  Ms. Reed is a former Bexar County prosecutor.  Should your practice or clinic have questions regarding a ZPIC audit, RAC audit, False Claims Act allegations or a possible criminal case, please give us a call for a free consultation at 1 (800) 475-1906.

The AHA Expresses its Concerns with Recent False Claims Act Kyphoplasty Cases

The AHA is Concerned with DOJ's Use of the False Claims Act in Kyphoplasty Cases(September 11, 2010):  The American Hospital Association (AHA) has expressed its concern that the Department of Justice (DOJ) and its law enforcement partner, the Department of Health and Human Services, Office of Inspector General (HHS-OIG) may be overreaching in its use of the False Claims Act in kyphoplasty cases. As set out in the AHA’s letter dated September 7, 2010:

 

  “The AHA is concerned that aggressive FCA investigations are being initiated upon the discovery of evidence of a mistake or overutilization, making FCA enforcement through negotiated “settlement” a self-fulfilling prophecy.”

 Citing a “kyphoplasty” initiative current being pursued by at least one U.S. Attorney’s Office, the AHA stated:

 “. . . notwithstanding the fact that kyphoplasty claims have long been subject to changing and ambiguous regulations and guidelines, the kyphoplasty initiative appears to observers to rely on data mining to establish a presumption that hospitals are liable for “knowing” violations of the civil FCA and subject to treble damages and penalties. Targets of the initiative have received letters disconcertingly similar to letters written prior to the issuance of the original “Holder Memo” in 1998 (Guidance on the Use of False Claims Act in Civil Health Care Matters).” (emphasis added).

As the AHA noted, the threat of an FCA action, and its accompanying liability, forces hospitals to incur specialized legal counsel and outside forensic accountants in order to defend the hospital’s interests.  As a result, some hospitals elect to settle the allegations rather than litigate the issues.  In recent years, our law firm has noted a significant shift in the government’s reliance on data-mining in its development of administrative, civil and even criminal cases.  We share the AHA’s concerns in the regard.  The over-reliance on data mining in the targeting of defendants may lead to a presumption of guilt before any examination of the medical records and association documentation has occurred.  Notably, Robert W. Liles, a Managing Partner at Liles Parker was instrumental in the drafting and implementation of the “Holder Memo.”  A number of our attorneys have extensive experience working on False Claims Act cases.

Robert Liles health care attorneyA number of Liles Parker attorneys have extensive experience handling False Claims Act cases, including those brought under the Act’s Qui Tam provisions (commonly referred to as its “whistleblower”provisions).  Should you have questions regarding the False Claims Act, give us a call for a complimentary consultation.  We can be reached at: 1 (800) 475-1906.

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