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SIU Dental Audit Reviews by DentaQuest, Delta Dental and Cigna Can Ultimately Lead to Criminal Prosecution and Imprisonment.  Are Your Dental Office’s Medical Necessity, Documentation, Coding and Billing Practices Compliant?

October 16, 2019 by  
Filed under Dental Audits & Compliance

Dental Claims Audits are Ongoing(October 16, 2019):  A Federal District Court Judge recently sentenced a Murfreesboro, TN dentist to prison and ordered that he pay restitution to TennCare (Tennessee’s Medicaid program).  Regrettably, the types of improper billing practices cited by the government in the criminal Information filed against the defendant dentist aren’t that uncommon.  This recent prosecution serves as an excellent case study of why it is essential that dentists and dental practices take steps to ensure that their medical necessity, documentation, coding and billing practices fully comply with applicable regulatory requirements and contractual obligations.  In addition to reviewing the types of improper conduct that led to the government’s criminal pursuit of the defendants in this case, this article examines how a Special Investigations Unit dental audit (SIU dental audit) by auditors and investigators at DentQuest, Delta Dental and Cigna can ultimately lead to a referral to State or Federal law enforcement officials.  Once a referral is made, you and your dental practice may be subject to criminal investigation and prosecution.

 

I.  SIU Dental Audit Reviews by DentaQuest, Delta Dental and Cigna Can Result in a Referral to State or Federal Law Enforcement Officials:

In this case, a Tennessee licensed dentist reportedly owned a dental practice with three locations in Murfreesboro, TN and a single location in Lebanon, TN.   The dental practice treated patients that were covered by private-payor dental plans and Medicaid.  Payors billed by the dental practice included, but were not necessarily limited to:  DentaQuest (DentaQuest served as the administrator to the TennCare program – Tennessee’s Medicaid program), Delta Dental and Cigna.[1]  Starting in late 2014, a number of payors initiated an SIU dental audit of the defendant’s multi-location dental practice.  These included:

December 2014. DentaQuest SIU Dental Audit.   In late 2014, DentaQuest conducted an audit of select 2013 and 2014 claims submitted to the Medicaid payor plan by the practice.  After reviewing the claims, DentiQuest alleged that the practice claiming was:

  • Billing for crowns at an unusually high rate; and
  • Impermissibly billing DentaQuest for services provided by non-credentialed dentists.

Importantly, the defendant was allegedly advised of these allegations both during and after the DentaQuest audit.

December 2016 Delta SIU Dental Audit.  Delta Dental conducted an audit of 2015 and 2016 claims submitted to the payor for coverage and payment. At the conclusion of the dental claims audit, Delta Dental alleged that the dental practice:

  • Billed for dental services during the period January 2015 through May 2016 that were allegedly not provided.

Both during and after the Delta Dental audit, the defendant dentist and his office manager were allegedly advised of the allegation that the practice had billed the payor for services that were not provided.

August 2016 Tennessee Bureau of Investigation Probe.  In August 2016, the defendant dentist and his office manager reportedly learned that the Tennessee Board of Investigation had initiated an investigation of the dental practice’s billing conduct.  Despite the fact that the defendants supposedly learned of the State’s ongoing investigation, they allegedly:

  • Directed employees to continue to bill for work that had not been performed.

As the summary findings of these dental claims audits reflect, the defendant dentist and the practice administrator were repeatedly advised by dental plan sponsors that a number of medical necessity, coding and documentation deficiencies had been identified.  Despite the fact that the defendants were allegedly put on actual notice of these improper coding and billing practices, the practice appears not to have taken remedial steps to correct the conduct.

II.  Overview of the Fraudulent Dental Billing Conduct Alleged by the Government:

The criminal Information filed against the defendant dentist outlines a number of documentation and billing practices that allegedly resulted in the submission of false and fraudulent dental claims to the DentaQuest (TennCare Medicaid), Delta Dental and Cigna payor plans. Not surprisingly, the types of improper conduct that the government chose to criminally prosecute are far from uncommon.  In fact, many of the dental audits we have defended on behalf of dental practices around the country have involved at least one of the documentation, coding and / or billing problems that ultimately led to the criminal referral in this case.  As both government and private payor SIU dental audit representatives will readily attest, when it comes to dental claims fraud, the old adage “. . . there is nothing new under the sun” certainly applies.[2] The types of improper conduct alleged by the government are outlined below:

Summary of Allegation

Conduct Cited by the Government

Billing for Services Not Rendered.The government alleged that the defendants submitted false and fraudulent claims to health care benefit programs for dental work that had not been completed.
Falsifying Dates of Service.  The government alleged that the defendants falsified the dates of service to make it appear as though the dental service was rendered within the timeframe required by a health care benefit program or after preauthorization was obtained from a health care benefit program so that the dental claims would be paid.
Falsifying the Identity of the Individual Who Rendered the Dental Services.The government alleged that the defendants falsified claims to make it appear as though the services had been rendered by a dentist who was credentialed to treat patients at a particular practice location, when in fact the services had been provided by a non-credentialed dentist or at a different practice location.[3]
Falsifying Dental Records.The government alleged that the defendants falsified supporting documentation and records, such as x-rays, in order to have the claims paid.
Engaging in Upcoding.The government alleged that the defendants added false language to the claim narratives to make it appear as though the practice had provided more expensive services than the services that were actually provided.
Obstruction.The government alleged that the defendants falsified took steps to conceal the fraud, including:  (1) Disciplining or firing employees who asked questions about whether the billing practices were correct or legal, (2) Instructing practice employees to tell patients and representatives from insurance companies that if the practice had billed for work that had not been done, it was simply a billing error and would be corrected, when, in fact, it was the routine practice of the organization.
False Statements / Obstruction.The government alleged that the defendants falsified took steps to make it appear as though the practice administrator was solely responsible for the fraudulent billing practices at the practice and that the defendant dentist was supposedly unaware of the fraudulent billing practices, when in fact, both individuals knew about the conduct and caused the practice to submit false and fraudulent claims.

 III.  Criminal Charges Brought Against the Defendant Dentist and Disposition of the Case:

The defendant dentist in this case entered into a plea bargain with the Federal government and agreed to waive his right to an Indictment.  As the pleadings in this case reflect, in November 2018, the defendant dentist was charged in a criminal Information with one count of criminal conspiracy under 18 USC § 1349.[4]   In June 2019, the defendant dentist was sentenced to almost three years in prison and ordered to pay almost one million dollars in restitution to the TennCare Medicaid program.[5]

How can you and your dental practice avoid engaging in the types of improper conduct identified by the government in this case? As a first step, your practice needs to develop, implement and adhere to the both the letter and the spirit of an effective compliance program.  An overview of the compliance program process is set out below.

IV.  Every Dental Practice Must Develop and Implement an Effective Compliance Program:

As you will recall, the Department of Health & Human Services (HHS), Office of Inspector General (OIG), issued voluntary Compliance Guidance for Individual and Small Group Physician Practices” almost 20 years ago, in 2000.[6]  As the seven element compliance guidance reflects, the term “physician” is defined to include “a doctor of dental surgery or dental medicine.” [7] With the passage of the Affordable Care Act[8]  in 2010, dental practices and other health care providers participating in Federal health benefits programs were now required to establish a compliance program as a condition of their enrollment in the Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) payor plans.  Under § 6401(b)(5) of the statute:

“Subtitle E—Medicare, Medicaid, and CHIP Program Integrity Provisions

SEC. 6401. PROVIDER SCREENING AND OTHER ENROLLMENT REQUIREMENTS UNDER MEDICARE, MEDICAID, AND CHIP.

Sec. 6401(a)(7):  COMPLIANCE PROGRAMS.—On or after the date of implementation determined by the Secretary under subparagraph (C), a provider of medical or other items or services or supplier within a particular industry sector or category shall, as a condition of enrollment in the program under this title [Medicare], title XIX [Medicaid], or title XXI [CHIP], establish a compliance program that contains the core elements established under subparagraph (B) with respect to that provider or supplier and industry or category.

. . . .

Sec. 6401(b)(5):  COMPLIANCE PROGRAMS.—The State requires providers and suppliers under the State plan or under a waiver of the plan to establish, in accordance with the requirements of section 1866(j)(7), a compliance program that contains the core elements established under subparagraph (B) of that section 1866(j)(7) for providers or suppliers within a particular industry or category.”  (emphasis added).

From a practical standpoint, dental practices have been slow to make the transition from a “voluntary” to a “mandatory” approach towards compliance. In January 2017, the OIG and compliance professionals of the Health Care Compliance Association (HCCA) met and made modifications to the original seven elements identified in the 2000 compliance program guidance.  The seven elements were modified to include the following:

  1. Standards, Policies, and Procedures.
  2. Compliance Program Administration.
  3. Screening and Evaluation of Employees, Physicians, Vendors and other Agents. 
  4. Communication, Education, and Training on Compliance Issues. 
  5. Monitoring, Auditing, and Internal Reporting Systems. 
  6. Discipline for Non?Compliance.
  7. Investigations and Remedial Measures.[9]

 If the defendants had properly developed, implemented and diligently worked to follow an effective dental practice compliance program, it is highly unlikely that the deficiencies identified by the government would have occurred (assuming, of course, that the defendants would have worked to comply with applicable statutory and regulatory requirements).

V.  The Possible Impact of an SIU Dental Audit on Your Dental Practice:

Assuming that your dental practice does not participate in the Medicare program[10] (but does participate in the Medicaid program), a wide variety of audit entities may show up at your door to perform an unannounced audit or send you a written notice of audit.  Audit entities that may initiate a review of your dental claims include:

Your Dental Practice May be Audits by Medicaid UPICs, Medicaid RACs, State Medicaid Fraud Control Units (MFCUs) and Private Payor Special Investigation Units (SIUs).

It is important to keep in mind that many of these audit entities have overlapping areas of responsibility.  As a result, it is entirely possible that one audit entity (for instance, a Unified Program Integrity Contractor (UPIC)) may decide to look at your 2015 Medicaid dental claims, while a completely different entity (such as Medicaid Recovery Audit Contractor (Medicaid RAC)) could audit your 2016 Medicaid dental claims.  For instance:

  • UPIC / Medicaid RAC Audits. On the government side, your dental practice’s Medicaid claims may be audited by a UPIC or a Medicaid RAC working for the Centers for Medicare and Medicaid Services (CMS).

  • State MFCU Audits. Since the Medicaid program is jointly funded by the Federal and State governments, your Medicaid claims may also be audited by your State’s Medicaid Fraud Control Unit (MFCU).

  • Audits by a Private Company Administrator of the Medicaid Program. If a private payor plan (such as DentaQuest) is serving as the administrator of the State Medicaid program, the private payor Special Investigations Unit (SIU) may initiate an audit of your Medicaid claims

  • Private Payor Audits. To the extent that your dental practice is a participating provider in one or more private dental payor plans, each of these private payor plans has an in-house SIU that is tasked with identifying and taking appropriate administrative action against providers and suppliers engaged in improper conduct. If a SIU identifies conduct that it believes may constitute fraud, it may choose to make a referral to law enforcement for further investigation and possible criminal prosecution.

In the case discussed above, the Special Investigation Units (SIU) of DentQuest, Delta Dental and Cigna initiated audits of the dental practice’s claims.   A private payor’s SIU is typically comprised of health care auditors and investigators, many of whom previously worked for Federal or State law enforcement agencies.  If evidence of wrongdoing is found by the SIU, the private payor may decide to take an administrative action, such as place a dental provider on prepayment review or terminate a dental provider from their payor program.  To the extent that an alleged overpayment is identified by the SIU, it may send a demand letter to a dental provider.  This ultimately could lead to the initiation of a collection action in civil court by the private payor.  In a worst case scenario, if an SIU agent identifies evidence of actual fraud (as opposed to conduct that is indicative of a mistake, error or an accident), the unit may choose to make a referral to the government for further investigation and possible criminal prosecution.

As set out in the background discussion (Section I), the dental practice in the instant case underwent several audits over a fairly short period of time.  The audits conducted included reviews by DentaQuest (as the administrator for TennCare’s Medicaid dental program), Delta Dental and Cigna.  The Tennessee Bureau of Investigation subsequently initiated its own investigation of the dental office’s billing practices.  After concluding their reviews, a criminal referral was made to the U.S. Attorney’s Office.  Federal prosecutors then initiated criminal proceedings against the dentist practice owner and the practice administrator.

VI.  Responding to a DentaQuest Audit, Delta Dental Audit or Cigna Audit of Your Dental Claims:

The government does not expect you to be perfect with respect to your documentation, coding and billing practices.  Nevertheless, the government does expect you to take reasonable steps to prevent the occurrence of improper billing practices. The development and implementation of an effective compliance program is an integral part of your dental practice’s program integrity efforts.  Unfortunately, even if you diligently work to stay within the four corners of the law, mistakes will still be made and your dental claims will still be subject to audit by a State Medicaid program, DentaQuest, Delta Dental, Cigna and other dental payors.  How should you respond if you are audited by a government or private payor?

  • Call an Experienced Health Lawyer for Assistance. Effectively responding to a government or private payor audit of your dental claims is essential if you hope to reduce the possible adverse effects of an audit.  An experienced health lawyer can walk you through the process and interact directly with the payor to seek an extension of the deadline to submit dental records and advise you on the documentation, coding and billing requirements that are required by a given payor.  Notably, the Liles Parker attorneys who would represent you and your practice in a dental audit are both experienced health lawyers AND have achieved certification as Certified Medical Reimbursement Specialists (CMRSs) by the American Medical Billing Association (AMBA) and / or Certified Professional Coders (CPCs) by the American Academy of Professional Coders.

  • Don’t ignore a SIU dental audit of your claims. It has been our experience that approximately 20% of all dental audit requests are either ignored by a dental practice or were set aside for later review and then got lost in the ever-growing pile of administrative correspondence received by a dental practice.  Don’t allow this to happen.  Most payors will give a dental practice a deadline to submit any responsive, supporting dental records.  This submission deadline can be as little as a few days to as much as 30 days.  If the payor does not receive the requested records by the deadline, it will automatically deny the dental claims.

  • Are there indications that the government or private payor intends to try and extrapolate damages? If a payor describes the group of dental medical records requested as a “statistically relevant sample” or uses similar descriptive terminology, call your legal counsel.  While not typically seen in private payor audits, we have seen numerous instances where a private payor has attempted to extrapolate any damages identified in connection with their audit.  Depending on applicable law and the terms of your contract with the payor, your legal counsel may be able to get the extrapolation dismissed.  If the payor does, in fact, have the authority to extrapolate damages, Liles Parker attorneys will often work with a statistical expert to conduct a preliminary assessment of whether or not the sample selected is, in fact, a sample that is representative of the universe of dental claims at issue.

  • Assemble the dental records requested. Take the time to assess the specific claims at issue and the supporting documentation in each file.  Are there additional places (e.g., files in storage) where additional supporting documentation may be kept?  If the documentation appears to be incomplete, you may be able to supplement the records with an affidavit. Are there any referring or ancillary providers that might have supporting documentation (e.g., referrals or orders from another dental professional, laboratory or X-ray test result)?

  • Retain duplicates of any information that you submit to the SIU dental auditor. Should you choose to go it alone and not be represented by legal counsel, you need to make sure that you secure a complete copy of the documentation sent to the payor.  It should be kept separate from your working files.  Should an appeal prove necessary, you will need to know the information on which the payor based its denial decision.

  • Don’t turn an administrative or civil audit into a criminal case. Dental records, progress notes, x-rays and other documents must be signed and dated by the health care provider at the time the services are rendered or conducted.  In conducting your review, did you find that the claims documentation is legible and complete?  If not, change your practices now.  Wholesale efforts to go back and supplement incomplete documentation may constitute obstruction of justice if incorrectly handled.  Never make changes to a patient’s documentation or dental records without first discussing the issues presented with legal counsel so that you can ensure that a third party reviewing the updated records will not be misled as to the nature of the changes or revisions AND when the changes or revisions were made.  In other words, your records must accurately show when changes, corrections or additions were made to the patient’s dental records.  Late entries to a record must be dated as such.  More than likely, government and private payor auditors will give very little (if any) credit to late entries or supplemental records unless the service being supplemental was recently performed.   The falsification of information in a patient’s dental record (or in other records presented to the government, its agents or private payor auditors) can constitute a criminal violation and could lead to much bigger troubles for you and your dental practice than a mere overpayment.

Private payor SIUs are an important source of referrals for State and Federal prosecutors. Your compliance with a payor’s medical necessity, documentation, coding and billing requirements will be carefully reviewed by a SIU if your dental claims are subjected to an audit by the payor’s anti-fraud unit.  If evidence of criminal fraud is identified, there is real possibility that your conduct will be referred to the government for further investigation and possible prosecution.  Your adoption and implementation of an effective compliance program will greatly reduce your level of risk.  Liles Parker attorneys have extensive experience working with dental practices around the country to develop and implement an effective compliance program.  Part of this process includes the performance of a “GAP Analysis” to determine whether the practices current practices are consistent with applicable regulatory and contractual requirements.  If deficiencies are identified, remedial steps can then be taken to bring the practice back into compliance.

Robert W. Liles Healthcare LawyerIs your dental practice being audited by DentaQuest, Delta Dental or Cigna?  If so, give us a call.  We can help.  A number of Liles Parker attorneys are experienced defending dental practices in Medicaid and private payor audits.  Moreover, these attorneys are both experienced health lawyers AND Certified Professional Coders (CPCs).  For a free consultation, please give us a call:  1 (800) 475-1906.

 

[1] Each of these plans qualify as “health care benefit programs” as defined by 18 USC § 24(b).

[2] Ecclesiastes 1:9 reads, in part “What has been is what will be, and what has been done will be done again. There is nothing new under the sun.”

[3] Are Your Providers Properly Credentialed with Each Payor?  How long does it take for the payor to credential a new dentist?  Once a new dentist is approved, will the payor cover dental claims back to the submission date of credentialing package?   We are seeing a huge rise in the number of overpayments based on failure to credential.  A detailed discussion of this credentialing issue is discussed in an article entitled: The Dangers of Billing Payors for the Services of a Non-Credentialed Dentist / Non-Participating Dentist.”

[4] Under the Fifth Amendment of the Constitution, a criminal defendant in a Federal case has a constitutional right to be indicted by a Grand Jury.  An Information is typically used by the government when a defendant voluntarily pleads guilty (typically after entering into plea bargain negotiations with the government).

[5] Notably, the defendant practice administrator has not entered a guilty plea and is scheduled to be tried in December 2019.

[6] 65 Fed. Reg. 59434. (October 5, 2000).

[7] 65 Fed. Reg. 59434, 59435.

[8] A copy of the Affordable Care Act can be found at the following link:  https://www.govinfo.gov/content/pkg/PLAW-111publ148/pdf/PLAW-111publ148.pdf

[9]See Measuring Compliance Program Effectiveness – A Resource Guide.” 

[10] Generally speaking, traditional Medicare does not cover most routine dental care procedures, such as cleanings, fillings, tooth extractions, dentures, or other common dental procedures. Under certain circumstances, Medicare Part A may cover dental services that are needed in connection with the provision of a covered Part A service (e.g. an operation your jaw).  Additionally, some Medicare Advantage are now starting to cover a limited scope of routine dental procedures.

What is the CMS Preclusion List? What is the Difference Between an Exclusion and a Preclusion Action? How Can You Appeal a CMS Preclusion Action?

(October 8, 2019):  On April 16th, 2018, the Department of Health & Human Services (HHS), Centers for Medicare and Medicaid Services (CMS), issued a Final Rule entitled, “Medicare Program; Contract Year 2019 Policy and Technical Changes to the Medicare Advantage, Medicare Cost Plan, Medicare Fee-for-Service, the Medicare Prescription Drug Benefit Programs, and the PACE Program.” [1] This 300+ page issuance revised the Medicare Advantage program (Part C) regulations, along with the Prescription Drug Benefit program (Part D) regulations, in order to implement portions of the Comprehensive Addiction and Recovery Act (CARA).  Among its various provisions, the Final Rule also served to rescind existing regulations that required prescribers of Part D drugs and providers of Medicare Advantage services and items to enroll in Medicare Fee-for-Service in order for the Part D drug or Medicare Advantage service or item to qualify for coverage and payment.[2]  In lieu of the enrollment requirements, CMS now requires that a Part D plan sponsor reject a pharmacy claim for a Part D drug if the provider prescribing the drug is included on a “Preclusion List.” Similarly, if a health care provider or supplier is listed on the preclusion list, no services furnished (or items supplied) by that individual or entity will be covered by Medicare Advantage.  At the time, CMS estimated that these changes would reduce program costs by $34.4 million in 2019.

A year to the day after publishing the Final Rule covering the Preclusion List, CMS published a Final Rule revising the Medicare Advantage (Part C) and Prescription Drug Benefit Program (Part D) regulations[3] on April 16, 2019.  The April 2019 Final Rule made a number of revisions to the Preclusion List provisions set out in the April 2018 Final Rule.  This article examines the CMS Preclusion List in more detail and examines the impact of a provider, supplier and / or prescriber being placed on the list.

I.  What is the CMS Preclusion List?

Simply stated, the CMS preclusion list is a register of all health care providers, suppliers, and prescribers who are precluded from receiving reimbursement for Medicare Advantage items and services or Part D drugs that are provided or prescribed to Medicare beneficiaries. CMS has established the preclusion list in an effort to better ensure patient safety and to protect the integrity of the Medicare Trust Funds from the actions of providers and prescribers that have been identified as bad actors.”

CMS is responsible for maintaining the Preclusion List. The list is made available to Medicare Advantage and Part D payor plans.  If a Medicare Advantage receives a claim for a health care item or service that was furnished by a precluded party, the claim will be denied. Similarly, if a Part D payor plan receives a claim for reimbursement from a pharmacy or Medicare beneficiary that is related to a drug that was prescribed by a precluded individual, the claim will be denied.

II.  What is the Difference Between an “OIG Exclusion” and a “CMS Preclusion” Action?

While based on completely different statutes, both the exclusion and preclusion regulations are intended to protect that safety of Medicare, Medicare and Federal health care beneficiaries AND help safeguard the financial integrity of Federal and State health care programs.  What is the difference between the two programs?

  • Medicare OIG Exclusion. The OIG is responsible for administering the various mandatory and permissive exclusion authorities that have been enacted.  If a health care provider, supplier or other entity is “excluded” from participation in the Medicare or Medicaid programs, the excluded party cannot provide care or services to Medicare and / or Medicaid beneficiaries. Moreover, an excluded party cannot work for a participating provider. Nor can an excluded party serve as an agent, contractor, or vendor for a participating provider or supplier. In my opinion, the definitive analysis of the OIG’s exclusion regulations is covered in Paul Weidenfeld’s article entitled, “Federal Exclusion Regulations and Enforcement Authorities, and How Providers Can Avoid Risk with Proper Exclusion Screening.” [4]

Broadly speaking, an individual or entity is typically excluded from participation in the Medicare or Medicaid programs due to a criminal conviction, the abuse of a patient, and / or an adverse licensure sanction. In contrast with the preclusion regulations set out the updated Final Rule dated April 16, 2019,[5] the exclusion regulations were first mandated by Congress in 1977 as part of the “Medicare-Medicaid Anti-Fraud and Abuse Amendments, Public Law 95-142.”

If an individual or entity (typically a health care provider, supplier) is excluded from Medicare or Medicare, the identity of the excluded party is posted online and is publicly available on the on OIG’s “List of Excluded Individuals/Entities” (LEIE) and / or one the 41 State Medicaid exclusion databases that are currently maintained around the country. Finally, the effect of an exclusion action applies across the board. It applies to services and items covered by traditional Medicare program, Medicare Advantage (Part C), and Part D drug plans.

  • Medicare CMS Preclusion. In contrast to the Medicare exclusion authorities which are administered by the OIG, the Medicare preclusion authorities are managed by CMS.  As described in Section III below, Medicare preclusion actions are typically revocation-based or conduct / behavior-based actions that effectively bar Medicare Part C and Part D plans from making payments to any individuals or entities that have been placed on the CMS preclusion list. Unlike the 43 Federal and State exclusion databases which are publicly accessible, the CMS preclusion database is only available Medicare Advantage (Part C) and Part D payor plans have with a valid Health Plan ID been granted access to the preclusion database by CMS.

III.  How are Individuals and Entities Added to the CMS Preclusion List?

Individuals and entities added to the Preclusion List fall within two broad categories. These categories are examined in more detail below:

Category #1: Preclusion List – Revocation Based Under this category, health care providers, suppliers, and prescribers can be placed on the Preclusion List if:

    • The Medicare billing privileges of an individual or entity are currently revoked under 42 CFR §424.535; and
    • There is an active reenrollment bar in effect under 42 CFR §424.535(c); and
    • CMS has determined that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program. In making this determination, CMS is to consider the following factors:
      • The seriousness of the conduct underlying the individual’s or entity’s revocation.
      • The degree to which the individual’s or entity’s conduct could affect the integrity of the Part D or MA program.
      • Any other evidence that CMS deems relevant to its determination;

If these three revocation-related requirements have been met, CMS may place a health care provider, supplier, or prescriber on the agency’s Preclusion List.

 OR

Category #2: Preclusion List – Conduct / Behavior Based:  Under this category, health care providers, suppliers, and prescribers can be placed on the Preclusion List if:

    • The individual or entity has engaged in behavior for which CMS could have revoked the individual or entity to the extent applicable, if they had been enrolled in Medicare; and
    • CMS determines that the underlying conduct that would have led to the revocation is detrimental to the best interests of the Medicare program. In making this determination under this paragraph, CMS considers the following factors:
      • The seriousness of the conduct underlying the individual’s or entity’s revocation.
      • The degree to which the individual’s or entity’s conduct could affect the integrity of the Part D or MA program.
      • Any other evidence that CMS deems relevant to its determination.

It is also important to keep in mind that CMS significantly expanded the bases for revoking a provider’s, supplier’s. or prescriber’s Medicare billing privileges under 42 CFR § 424.535(a)   As discussed in a recent article examining the Final Rule entitled, “Medicare, Medicaid, and Children’s Health Insurance Programs; Program Integrity Enhancements to the Provider Enrollment Process,” the revised reasons for revocation that may be asserted by the government will be effective November 4, 2019.[6]

As a final point in this regard, please note that OIG Exclusions and felony convictions will also result in an individual or entity being placed on the CMS Preclusion List.

IV.  How Will an Individual or Entity Learn of Their Inclusion on the CMS Preclusion List?

When placing an individual or entity on the Preclusion List, CMS (through one of its Medicare Administrative Contractors (MAC)) is supposed to send written notice to the party.  The MAC will send the letter to the address listed in the Provider Enrollment Chain and Ownership System (PECOS) system.  The effective date of the preclusion action, along with reason(s) an individual or entity has been added to the list is required to be included in the letter. Additionally, the notice letter is supposed to provide information advising the individual or entity of their right to appeal their inclusion on the list.[7]

CMS Preclusion List

V.  How Long Can a Provider, Supplier, or Prescriber Stay on the CMS Preclusion List?

If a provider, supplier, or prescriber exhausts their first level of administrative appeal (either due to the fact that no appeal was filed in a timely fashion[8] OR CMS denied the appellant’s request for reconsideration), CMS will add the individual or entity’s name to the Preclusion List.  Please note, if the preclusion action has been taken due to the fact that the provider, supplier, or prescriber has been excluded from participation in Federal and State programs, the individual or entity will be placed on the CMS Preclusion List effective the date of the party’s exclusion. The length of time that an individual or entity will remain actively precluded will depend on the following:

  • Length of Preclusion if Based on an Exclusion Action. If a provider, supplier, or prescriber is placed on the CMS Preclusion List due to the fact the individual or entity has been excluded from participation in Federal and State health care programs, the party will remain actively precluded for at least until the excluded party has been reinstated by the OIG.
  • Length of Preclusion if Based on a Revocation Action. If a provider, supplier, or prescriber is placed on the CMS preclusion list due to the fact that the individual or entity is currently revoked (or would have been revoked had they enrolled in the Medicare program), the individual or entity will remain actively precluded for the length of their re-enrollment bar. The length of a re-enrollment bar ranges from 1 to 3 years, depending the seriousness of the reason for revocation.
  • Length of Preclusion if Based on a Felony Conviction. If a provider, supplier, or prescriber is placed in the CMS preclusion list due to a felony conviction, the length of the preclusion will remain in effect for a 10-year period, beginning on the date of the felony conviction, unless CMS determines that a shorter time period is warranted (effective January 1, 2020).

Importantly, at the expiration of a preclusion action, a precluded party’s name is NOT totally removed from the CMS Preclusion List.  As set out in April 2019 Final Rule, once a precluded party is reinstated, the party’s name will remain on the preclusion database list, but will be annotated to reflect the fact that the provider, supplier or prescriber has been reinstated.  Once reinstated, the individual or entity may again submit claims for services and items to Medicare Advantage (Part C)) plans, and / or issue prescriptions for Part D drugs.

VI.  Can an Individual or Entity Participating in the Medicare Program “Screen” to Ensure that Precluded Parties Aren’t Hired?

Unfortunately, Medicare providers and suppliers do not have access to the CMS Preclusion List.  Only CMS approved Medicare Advantage (Part C) and Part D payor plans have with a valid Health Plan ID been granted access to the preclusion database.  As CMS notes:

“CMS makes the Preclusion List available to the Medicare Advantage (MA) plans and Part D plans. MA [Medicare Advantage] plans will deny payment for a health care item or service furnished by an individual or entity on the Preclusion List. Part D plans will reject a pharmacy claim (or deny a beneficiary request for reimbursement) for a Part D drug that is prescribed by an individual on the Preclusion List.”[9]

Under 42 CFR § 422.204(b),  a Medicare Advantage organization is required to establish and comply with a comprehensive set of written credentialing and recredentialing requirements.  The credentialing process is intended to serve as the initial set of program integrity safeguards used by Part C and Part D payor plans to prevent bad actors from enrolling in the programs.  Unfortunately, this system is imperfect at best.  More often than not, the credentialing of a newly-hired provider, supplier or prescriber is not requested by a participating health care organization prior to the organization’s employment of the newly-hired party.  Notably, it is entirely possible that an individual may have been placed on the CMS Preclusion List due to his or her improper conduct or behavior (as described in Category #2 above), yet may not have been excluded from participation in Federal health care programs by the OIG.  Therefore, even assuming that your organization properly screens its applicants against all available Federal and State exclusion lists prior to extending an offer of employment, it is still possible that you may unknowingly employ or enter a contract with a precluded individual or entity.  We strongly recommend that your organization conduct proper due diligence before employing or contracting with a provider, supplier or prescriber.  Should you inadvertently hire, or continue to employ, an individual who is precluded from providing services or items that will be billed to Medicare Advantage (Part C) plans, or issue prescriptions that will be billed to a Medicare Part D plan, those claims will be denied.

VII.  How Do You Appeal a CMS Preclusion Action?

To establish the administrative framework to appeal a CMS preclusion action, CMS revised 42 CFR § 498.3(b), adding a new provision, Section (20), which made the decision to place an individual or entity on the Preclusion List an “Initial Determination” for appeal purposes.  CMS further modified 42 CFR § 498.5, adding paragraph (n)(1).  Under 42 CFR § 498.5(n)(1):

“Any individual or entity that is dissatisfied with an initial determination or revised initial determination that they are to be included on the preclusion list (as defined in § 422.2 or § 423.100 of this chapter) may request a reconsideration in accordance with § 498.22(a).  (emphasis added).

If an individual or entity files a Request for Reconsideration and is dissatisfied with the decision, the individual or entity can seek a hearing before an Administration Law Judge (ALJ).[10]  After an ALJ renders a hearing decision, either party (CMS or the individual / entity on the Preclusion List) may request Departmental Appeals Board review.  Additionally, the individual or entity may also seek judicial review of the Department Appeals Board’s decision.[11]

Robert W. Liles Healthcare LawyerHave you been placed on the CMS Preclusion List? Although the CMS Preclusion List has only been in place a short time, a number of Liles Parker attorneys have already handled (or, are in the process of handling) preclusion appeal cases. Our experienced health law attorneys can advise you on how to best respond to this challenge and represent you throughout the complex appeal process that has been established. For a free initial consultation regarding your situation, call us at: 1 (800) 475-1906.

 

 

[1] 83 FR 16440 (April 16, 2018).

[2] Institutional providers and suppliers must still be enrolled in Medicare Fee-for-Services.  Additionally, as part of their credentialing requirements, some Medicare Advantage plans may require that a provider or supplier be enrolled in the Medicare Fee-for-Service program.

[3] “Medicare and Medicaid Programs; Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, Programs of All-Inclusive Care for the Elderly (PACE), Medicaid Fee-For-Service, and Medicaid Managed Care Programs for Years 2020 and 2021.”  84 FR 15680.  (April 16, 2019).

[4] Part I of the article “Federal Exclusion Regulations and Enforcement Authorities, and How Provider’s Can Avoid Risk with Proper Exclusion Screening,” is in the process of being published in a series part series by the folks at Exclusion Screening.

[5] 84 FR 15680.

[6] See article entitled “Medicare, Medicaid and CHIP Enrollment Revocation and Denial Authorities Have Expanded.  What Steps are You Taking to Reduce Your Level of Risk? (September 18, 2019).

[7] An example of the letter sent to a revocation-based precluded party can be found at:

https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/MedicareProviderSupEnroll/Downloads/Preclusion_List_Model_Letter-Revoked_With_Active_Enrollment_Bar.pdf

An example of the letter sent to a conduct / behavior-based precluded party can be found at:

https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/MedicareProviderSupEnroll/Downloads/Preclusion_List_Model_Letter-Could_Have_Been_Revoked.pdf

[8] This would occur upon the expiration of the 60-day period in which a provider, supplier or prescriber has to file a reconsideration appeal to the proposed preclusion action. See 84 FR 15680, 15781.

[9] See CMS “Preclusion List Frequently Asked Questions.”  Updated 08/07/2019.

[10] 42 CFR § 498.5(n)(2).   Notably, CMS may also seek a hearing before an ALJ if it is dissatisfied with the reconsideration decision.

[11] 42 CFR § 498.5(n)(3).

Medicare, Medicaid and CHIP Enrollment Revocation and Denial Authorities Have Expanded.  What Steps are You Taking to Reduce Your Level of Risk?

Medicare Enrollment

Big Changes to CMS Form 855 are on the Horizon

(September 18, 2019):  On September 10, 2019, the Department of Health and Human Services (HHS) and Centers for Medicare and Medicaid Services (CMS) published a Final Rule in the Federal Register entitled, “Medicare, Medicaid, and Children’s Health Insurance Programs; Program Integrity Enhancements to the Provider Enrollment Process.” Issuance of the Final Rule is necessary in order to implement sections 1866(j)(5) and 1902(kk)(3) of the Social Security Act (as amended by the Affordable Care Act), which require that providers and suppliers fully disclose information related to affiliations, uncollected debts and certain adverse actions that may impact the program integrity of the affected government health plan.  As discussed below, the impact of the Final Rule on the Medicare enrollment disclosure requirements of providers and suppliers has been significantly enhanced.  Moreover, the authority of CMS to revoke or deny the enrollment of a participating provider or supplier has been greatly expanded.  Under the Final Rule, the reporting obligations of Medicare, Medicaid, and CHIP providers and suppliers will dramatically increase when they file a new enrollment application, revalidate their enrollment, need to file a change of information, or need to notify the agency of a change in ownership .[1]  This article is intended to take a “first look” at the impact of the Final Rule on the obligations  faced by providers and suppliers. Additionally this article reviews CMS’ new revocation and denial authority, and it explores a number of the challenges that you or other providers may face, as a result.

I.  Background – Medicare Enrollment and Revalidation Program Integrity Measures:

Approximately, 54 million individuals are enrolled in the Medicare program.[2]  In order to qualify to provide care and treatment services to these beneficiaries, a health care provider or supplier must meet a number of administrative, regulatory, and statutory requirements that are meant to protect both the patient and the financial integrity of the Medicare program.  The Medicare enrollment process effectively serves as one of the agency’s primary ways to protect patients and the Medicare Trust Fund from the actions of providers and suppliers whose participation would represent a significant risk of fraud or abuse.

When enrolling in the Medicare program, an applicant provider or supplier must complete and submit an appropriate enrollment application (i.e., a Form CMS-855) to their assigned Medicare contractor.  The enrollment application can be submitted by paper or electronically through the agency’s Provider Enrollment, Chain, and Ownership System (PECOS).  Several of the previous rules promulgated by CMS to strengthen the overall effectiveness and program integrity of the enrollment process have included:

  • April 21, 2006: CMS published a Final Rule entitled “Medicare Program; Requirements for Providers and Suppliers to Establish and Maintain Medicare Enrollment.”[3] This Final Rule laid out a number of requirements that must be met by providers and suppliers in order to maintain their Medicare billing privileges.
  • February 2, 2011: CMS published a Final Rule entitled “Medicare, Medicaid, and Children’s Health Insurance Programs; Additional Screening Requirements, Application Fees, Temporary Enrollment Moratoria, Payment Suspensions and Compliance Plans for Providers and Suppliers.”[4]  This Final Rule established a number of new provider enrollment screening requirements.
  • March 1, 2016: CMS published a Proposed Rule entitled “Medicare, Medicaid, and Children’s Health Insurance Programs; Program Integrity Enhancements to the Provider Enrollment Process.” This Proposed Rule set out the enrollment revocation and denial changes CMS planned to implement in an effort to address long-standing program integrity risks that have previously been exploited in the past.[5]

A little more than three years after the issuance of the March 2016 Proposed Rule, CMS has now issued its much-anticipated Final Rule entitled, “Medicare, Medicaid, and Children’s Health Insurance Programs; Program Integrity Enhancements to the Provider Enrollment Process.” [6]  With the implementation of this Final Rule,  CMS will now have expanded authority to deny the enrollment and / or revalidation of a provider or supplier if it determines that an “affiliation” presents an undue risk of fraud risk or abuse.  The Final Rule will also make it much easier to revoke the enrollment of existing providers and suppliers whose continued participation in the Medicare, Medicaid, or CHIP programs is determined to represent a program integrity risk.

II.  Why Has CMS Tightened Up the Medicare Enrollment and Revalidation Process?

Despite past efforts to strengthen the Medicare provider enrollment process, existing Medicare, Medicaid, and CHIP systems haven’t been fully effective in identifying direct owners, managing employees, and close affiliates of provider and supplier applicants with a history of certain adverse  events.  As representatives of the Office of Inspector General (OIG) have testified before Congress, health care providers and suppliers engaging in wrongful billing practices have often been found to have relied on networks of affiliations with other fraudulent providers and suppliers. For example, in south Florida, law enforcement has previously found that some Medicare providers and suppliers have taken steps to hide their ownership through the use of straw owners.  The real owners (who are likely prohibited from participating or likely to be denied participation in Federal health care programs) are then free to engage in improper billing practices.[7]

The issuance of the new Final Rule requires that as part of the enrollment and revalidation process, providers and suppliers must disclose any business affiliations that may pose an undue risk of fraud, waste and / or abuse to the Medicare, Medicaid and CHIP programs. CMS will be phasing the new affiliation reporting requirements in over a period of years. First, the agency will update and issue new provider enrollment Form CMS-855 applications, and then it will require reporting of certain affiliations “upon request.”[8] At least initially, only those providers or suppliers who are asked to report affiliations on the new enrollment forms will be required to do so. CMS states in the new Final Rule that it will publish further rulemaking to expand this reporting requirement after assessing the progress of its initial phased-in approach.

Notably, CMS estimates that the new disclosure requirements and revocation authorities implemented by the Final Rule will result in approximately 2,600 new revocations each year and will save the affected government health programs an estimated $4.16 billion over the next 10 years.

III.  Reporting Affiliations:

Under the Final Rule, the “affiliations” that a provider or supplier may have to disclose upon request by CMS include the following:

The term “affiliation” is defined under 42 CFR §424.519 as meaning any of the following:

  • A 5 percent or greater direct or indirect ownership interest that an individual or entity has in another organization.
  • A general or limited partnership interest (regardless of the percentage) that an individual or entity has in another organization.
  • A 5 percent or greater direct or indirect ownership interest that an individual or entity has in another organization.
  • An interest in which an individual or entity exercises operational or managerial control over, or directly or indirectly conducts, the day-to-day operations of another organization (including, for purposes of § 424.519 only, sole proprietorships), either under contract or through some other arrangement, regardless of whether or not the managing individual or entity is a W–2 employee of the organization.
  • An interest in which an individual is acting as an officer or director of a corporation.
  • Any reassignment relationship under 42 CFR § 424.80.”

The new affiliation provisions are intended to identify individuals and entities that have an ownership interest or exercise managerial control in multiple Medicare program providers or suppliers. Both OIG and CMS have repeatedly identified situations where providers and suppliers whose Medicare billing privileges have been revoked for fraud and / or other improper conduct have managed to surreptitiously re-enter the program using a nominee owner to disguise their true ownership or through other deceptive means.  As the agency has noted, the broad definition of affiliation that has been adopted, is needed so that providers and suppliers fully disclose any prior or current relationships that could pose risks of fraud, waste or abuse to the Medicare program.  CMS has estimated that if the new affiliation provisions had been in place over the previous five years, it could have prevented $51.9 billion from being paid to 2,097 entities with affiliations with a previously-revoked individual or entity.

IV.  Disclosable Events Under 42 CFR § 424.519:

When initially enrolling or revalidating with the Medicare program, the new regulations will require that a provider or supplier disclose whether it or any of its owning or managing employees or organizations (consistent with the terms ‘‘owner’’ and ‘‘managing employee’’ as defined in 42 CFR § 424.502) has or, within the previous 5 years, has had an affiliation with a currently or formerly enrolled Medicare, Medicaid, or CHIP provider or supplier that has had any “disclosable events.”[9] Importantly, the term, “disclosable event“ is defined in the new regulation as an affiliation with a currently or formerly enrolled Medicare, Medicaid or CHIP provider or supplier that:

“(1) Currently has an uncollected debt to Medicare, Medicaid, or CHIP, regardless of – (i) The amount of the debt; (ii) Whether the debt is currently being repaid (for example, as part of a repayment plan); or (iii) Whether the debt is currently being appealed;

(2) Has been or is subject to a payment suspension under a federal health care program (as that latter term is defined in section 1128B(f) of the Act), regardless of when the payment suspension occurred or was imposed;

(3) Has been or is excluded by the OIG from participation in Medicare, Medicaid, or CHIP, regardless of whether the exclusion is currently being appealed or when the exclusion occurred or was imposed; or

(4) Has had its Medicare, Medicaid, or CHIP enrollment denied, revoked, or terminated, regardless of— (i) The reason for the denial, revocation, or termination; (ii) Whether the denial, revocation, or termination is currently being appealed; or (iii) When the denial, revocation, or termination occurred or was imposed.”

Responding to comments submitted in connection with the Proposed Rule, CMS clarified who must be reported as an owner or managing employee of a provider or supplier, and likewise, who the organization must collect information from to identify all “affiliations” and “disclosable events.” CMS commented that the following situations would (1) require disclosure of a person or organization as an owner or managing employee, and (2) require disclosure of those persons or organizations “affiliations” if there has been a disclosable event:

      • Does a “Physician Director” or “Director of Nursing” have to be reported as part of the enrollment process? Yes, if the Physician Director or the Director of Nursing fall within the definition of “managing employee”[10] under 42 CFR § 424.502, he or she would have to be reported [on the Form CMS-855 application as a managing employee]. Moreover, if the Physician Director or the Director of Nursing was previously a managing employee of another provider or supplier with a “disclosable event,” the Physician Director or Director of Nursing would have to be reported.
      • Do the members of the Board of Trustees of a tax-exempt entity have to be reported as part of the enrollment process? Yes, as set out in CMS Publication 100-08, Program Integrity Manual (PIM), Chapter 15, Section 15.5.5 (Owning and Managing Organizations) members of a Board of Trustees are considered to be Corporate Directors and must be reported on CMS Form 855.  As an aside, CMS takes the position that non-profit entities and offices would fall under the affiliation definition to the same extent as for-profit entities and officials.
      • Does an entity with a 5% or greater mortgage or security interest have to be reportedConsistent with the PIM, Chapter 15, Section 15.5.5:  “All entities with at least a 5 percent mortgage, deed of trust or other security interest in the provider must be reported in section 5. This frequently will include banks, other financial institutions, and investment firms.”
      • Does a billing agency or a collection agency have to be reported? Yes, if the billing agency or collection agency meets the definition of a managing employee (as it applied to organizations), then they would have to be reported on the CMS Form 855.
      • Does a public company that owns 5% of more of an enrolling or reenrolling company have to be reported?   CMS takes the position that public companies fall within the purview of 42 CFR §424.519.
      • Does an affiliated managing individual have to be reported in CMS Form 855 even if he or she has no responsibilities concerning payment for services? The definition of managing employee under 42 CFR §?424.502 includes all persons who directly or indirectly conduct a provider’s or supplier’s day-to-day operations. There is no requirement that these individuals must have responsibilities related to payment for services.

In short, the above individuals must be disclosed in the owner and managing employee sections of the Form CMS-855 applications (or their counterpart in PECOS), and if those owners or managing employees have affiliations that have disclosable events, then those must be reported as well. As we stated earlier, in response to the many comments and concerns submitted by providers and suppliers, for now, CMS is not requiring that providers and suppliers disclose affiliations with disclosable events under 42 CFR §?424.519 unless CMS specifically requests that they do so.[11]  Moreover, CMS does not intend to request these disclosures until it has updated CMS Form-855.  However, as CMS further noted:

“Although we will initially be implementing a more targeted approach to the disclosure requirement, we recognize that section 1866(j)(5) of the Act requires every provider and supplier (regardless of the relative risk they may pose) to disclose affiliations upon initial enrollment and revalidation. While section 1866(j)(5) of the Act does give the Secretary some discretion in applying this provision in terms of form, manner, and timing, it does not permanently exempt any provider or supplier from its applicability . . . Consequently, CMS must eventually secure affiliation data from all initially enrolling and revalidating providers.” (emphasis added).

Therefore, at this time, providers and suppliers are not required to report disclosable affiliations until CMS has an opportunity to update its Form CMS-855 applications so that this data can be collected.  Furthermore, CMS will be issuing additional sub-regulatory guidance regarding the affiliation disclosure process.  This sub-regulatory guidance is expected to set out the agency’s expectations with respect to the level of effort that is required of a provider or supplier to research and secure an owner or managing employees relevant affiliation information.

V.  When Will a Disclosed Affiliation be Found to “Pose an Undue Risk of Fraud, Waste or Abuse”?

The Final Rule makes it clear that just because an affiliation must be disclosed, does not necessarily mean that CMS will determine that an affiliation will “pose an undue risk of fraud, waste, or abuse.”[12] Before making a determination, CMS intends to carefully examine the specifics of each situation prior to deciding whether to exercise its discretion to deny an application for enrollment OR to revoke the participation of a currently enrolled provider.  When deciding whether a disclosed affiliation represents an undue risk, CMS will consider:

(1) The duration of the affiliation.
(2) Whether the affiliation still exists and, if not, how long ago it ended.
(3) The degree and extent of the affiliation.
(4) If applicable, the reason for the termination of the affiliation.
(5) Regarding the affiliated provider’s or supplier’s disclosable event, CMS will consider:

(i) The type of disclosable event.
(ii) When the disclosable event occurred or was imposed.
(iii) Whether the affiliation existed when the disclosable event occurred or was imposed.
(iv) If the disclosable event is an uncollected debt:

(A) The amount of the debt.
(B) Whether the affiliated provider or supplier is repaying the debt.
(C) To whom the debt is owed.

(v) If a denial, revocation, termination, exclusion, or payment suspension is involved, the reason for the disclosable event.

(6) Any other evidence that CMS deems relevant to its determination.

Depending on the particulars of each case, CMS may find that a disclosed affiliation does, in fact, pose an undue risk of fraud, waste, or abuse. Should this occur, CMS will deny a provider’s or supplier’s initial enrollment application under 42 CFR § 424.530(a)(13) OR revoke a currently participating provider’s or supplier’s Medicare enrollment under 42 CFR § 424.535(a)(19).

VI.  What Can Happen if a Provider or Supplier Fails to Report a Disclosable Affiliation?

When asked to do so by CMS, it will be essential that a provider or supplier ensure that any and all disclosable affiliations and other general business information is fully and completely reported.  If a provider or supplier fails to report a disclosable affiliation and “knew or should have known”[13] of the omitted information, CMS may choose to deny an applicant’s initial enrollment application (under 42 CFR § 424.530(a)(1) and, if applicable, 42 CFR § 424.530(a)(4)). Alternatively, if a currently participating provider or supplier fails to report a disclosable affiliation, CMS may choose to revoke the entity’s Medicare enrollment (under 42 CFR § 424.535(a)(1) and, if applicable, 42 CFR § 424.535(a)(4)).

VII.  What is an “Uncollected Debt”?

As set out under 42 CFR §?424.519(a)(1), if an applicant, or an applicant’s owner or managing employee is affiliated with another provider or supplier that has an “uncollected debt,” that is a disclosable event under 42 CFR §?424.502.  As previously discussed, an uncollected debt is only intended to include:

“(i) Medicare, Medicaid, or CHIP overpayments for which CMS or the state has sent notice of the debt to the affiliated provider or supplier.
(ii) Civil money penalties imposed under this title.
(iii) Assessments imposed under this title.”

(emphasis added).

Importantly, the phrase notice of the debt to the affiliated provider or supplier” does not include audit requests or routine denial letters where refunds are made through remittance advices or claims corrections.  In its response to comments from stakeholders, CMS expressly notes that “notice of the debt” would include something like a demand letter or other formal request for payment.

CMS has not established a minimum amount that would require the reporting of an uncollected debt.  Regardless of whether an alleged uncollected debt is $500 or $5 million, it would qualify as a reportable disclosable event under the Final Rule.  As CMS noted, “there could be isolated cases where a particular debt, though of a de minimis amount, presents an undue risk when all of the applicable factors are considered.”   CMS further states that even though a provider or supplier may currently be in the process of repaying a debt, the debt would still be a reportable disclosable event.

VIII.  Impact of Filing an Appeal in an Uncollected Debt or Enrollment-Related Action:

Throughout the Final Rule, multiple commenters urged CMS to view alleged debts and enrollment-related actions that are being appealed by a provider or supplier differently than those where no appeal has been filed.  After considering the points raised, CMS consistently declined to adopt such a position and has decided that even if an alleged debt is currently under appeal, the debt would still qualify as a disclosable event.  As CMS wrote:

“consistent with our obligation to protect the Medicare program and the Trust Funds, as well as with our authority under section 1866(j)(5) of the Act, we believe we should have the ability to determine whether the debt and the associated affiliation pose an undue risk regardless of whether the debt is being appealed.” (emphasis added).

Similarly, CMS held that under 42 CFR § 424.519, enrollment denial, revocation, and termination actions will still qualify as disclosable events even if they are under appeal.

IX.  Modification to the Enrollment Denial Reasons Under 42 CFR § 424.530:

As set out under 42 CFR § 424.530(a), CMS is authorized to deny a provider’s or supplier’s enrollment in the Medicare program for a number of reasons. Prior to the issuance of the Final Rule, the authorized reasons for denying enrollment in Medicare fell within the following broad categories:

(1) Noncompliance

(2) Provider or supplier conduct.

(3) Felonies

(4) False or misleading information.

(5) On-site review.

(6) Medicare debt.

(7) Payment suspension.

(8) Initial reserve operating funds.

(9) Application fee / hardship exception.

(10) Temporary moratorium.

(11) Prescribing authority.

Under the Final Rule, enrollment denials based on “Payment Suspension” (42 CFR § 424.530(a)(7)) have been expanded and may now be based on the following:

“(i) The provider or supplier, or any owning or managing employee or organization of the provider or supplier, is currently under a Medicare or Medicaid payment suspension as defined in §§ 405.370 through 405.372 or in § 455.23 of this chapter.

(ii) CMS may apply the provision in this paragraph (a)(7) to the provider or supplier under any of the provider’s, supplier’s, or owning or managing employee’s or organization’s current or former names, numerical identifiers, or business identities or to any of its existing enrollments.

(iii) In determining whether a denial is appropriate, CMS considers the following factors:

(A) The specific behavior in question.
(B) Whether the provider or supplier is the subject of other similar investigations.
(C) Any other information that CMS deems relevant to its determination.”

Prior to this expansion, the Payment Suspension basis for denying a provider’s or supplier’s Medicare enrollment was limited to situations where the current owner, physician, or non-physician practitioner had been placed on Medicare suspension.  CMS believed this did not allow them to deny enrollment to any provider or supplier type based on a payment suspension by the Medicare program, and did not encompass scenarios where a provider or supplier’s payments had been suspended by a state Medicaid payment but the Medicare program. Under the revised Final Rule, now all provider and supplier types can be denied enrollment if that provider or supplier is subject to a Medicare OR Medicaid payment suspension, or if the provider’s or supplier’s owners or managing employees or organizations are subject to such a suspension. Importantly, CMS will look at a provider’s or supplier’s owners and managing employee’s or organization’s current and former names, business identities and related numerical identifiers to identify any payment suspensions.

Additionally, the Final Rule has added several additional bases that may be relied on by CMS when deciding to deny a provider’s or supplier’s Medicare enrollment.  These new reasons for denial include:

(12) Revoked under different name, numerical identifier or business identity and the applicable re-enrollment bar has not expired.[14]
(13) Affiliation that poses undue risk.
(14) Other program termination or suspension.

Each of the fourteen reasons that may be relied on by CMS when denying a provider’s or supplier’s Medicare enrollment have specific requirements which must be met.  If you or your practice are denied Medicare enrollment, you should work with your legal counsel to determine whether the denial reason cited by CMS is accurate and consistent with the facts in your case.

X.  Introduction of a New “Reapplication Bar” Rule Under 42 CFR § 424.530(f):

As revised, the Medicare enrollment denial regulations now include a new “Reapplication Bar” rule.  As 42 CFR § 424.530(f) sets out, if a provider or supplier submitted false or misleading information on (or with) their Medicare enrollment application, CMS can choose to prohibit the prospective provider or supplier from enrolling in the Medicare program for up to three years.  Importantly, the scope of the reapplication bar rule set out under 42 CFR § 424.530(f)(1) and (f)(2) is quite broad:

“(1) The reapplication bar applies to the prospective provider or supplier under any of its current, former, or future names, numerical identifiers or business identities.

(2) CMS determines the bar’s length by considering the following factors:

(i) The materiality of the information in question.
(ii) Whether there is evidence to suggest that the provider or supplier purposely furnished false or misleading information or deliberately withheld information.
(iii) Whether the provider or supplier has any history of final adverse actions or Medicare or Medicaid payment suspensions.
(iv) Any other information that CMS deems relevant to its determination.

XI.  Modifications to the Medicare Enrollment Revocation Regulations Under 42 CFR § 424.535:

Prior to the issuance of the Final Rule, under 42 CFR § 424.535(a), CMS has long exercised the authority to revoke a currently-enrolled provider’s or supplier’s Medicare billing privileges (along with any related provider or supplier agreement).  Reasons for revocation have included:

  1. Noncompliance
  2. Provider or supplier conduct.
  3. Felonies
  4. False or misleading information.
  5. On-site review;
  6. Grounds related to provider or supplier screening requirements.
  7. Misuse of billing number.
  8. Abuse of billing privileges.
  9. Failure to report.
  10. Failure to document or provide CMS access to documentation.
  11. Initial reserve operating funds.
  12. Medicaid termination.
  13. Prescribing authority.
  14. Improper prescribing practices.

Under the Final Rule, the reasons for revocation under 42 CFR § 424.535(a)(9) and (a)(12) have been revised.  The revocation reason set out under 42 CFR § 424.535(a)(9) Failure to report, has been changed.  The basis for revocation has now been expanded to cover the following:

(9) Failure to report. The provider or supplier did not comply with the reporting requirements specified in § 424.516(d) or (e), § 410.33(g)(2) of this chapter, or § 424.57(c)(2). In determining whether a revocation under this paragraph (a)(9) is appropriate, CMS considers the following factors:

         (i) Whether the data in question was reported.
         (ii) If the data was reported, how belatedly.
         (iii) The materiality of the data in question.
        (iv) Any other information that CMS deems relevant to its determination.”

Similarly, the Final Rule expands the revocation basis set out under 42 CFR § 424.535(a)(12).  Rather than focus exclusively on the termination of a provider’s or supplier’s Medicaid billing privileges, under the Final Rule 42 CFR § 424.535(a)(12) the basis for revocation has been expanded to include not merely Medicaid but also adverse actions taken by any other Federal health care program.  As the regulation now reads:

“(12) Other program termination.

(i) The provider or supplier is terminated, revoked or otherwise barred from participation in a State Medicaid program or any other federal health care program. In determining whether a revocation under this paragraph (a)(12) is appropriate, CMS considers the following factors:

(A) The reason(s) for the termination or revocation.
(B) Whether the provider or supplier is currently terminated, revoked or otherwise barred from more than one program (for example, more than one State’s Medicaid program) or has been subject to any other sanctions during its participation in other programs.
(C) Any other information that CMS deems relevant to its determination.

 (ii) Medicare may not revoke unless and until a provider or supplier has exhausted all applicable appeal rights.
 (iii) CMS may apply paragraph (a)(12)(i) of this section to the provider or supplier under any of its current or former names, numerical identifiers or business identities.”

 The Final Rule has set aside slots for future bases for revocation at 42 CFR § 424.535(a)(15) and (a)(16).

Notably, a number of new bases for Medicare enrollment revocation have now been established under the Final Rule and are set out under 42 CFR § 424.535(a)(17) through (a)(20).  These new reasons for revocation include the following:

(17) Debt referred to the United States Department of Treasury. The provider or supplier has an existing debt that CMS appropriately refers to the United States Department of Treasury. In determining whether a revocation under this paragraph (a)(17) is appropriate, CMS considers the following factors:

(i) The reason(s) for the failure to fully repay the debt (to the extent this can be determined).
(ii) Whether the provider or supplier has attempted to repay the debt (to the extent this can be determined).
(iii) Whether the provider or supplier has responded to CMS’ requests for payment (to the extent this can be determined).
(iv) Whether the provider or supplier has any history of final adverse actions or Medicare or Medicaid payment suspensions.
(v) The amount of the debt. (vi) Any other evidence that CMS deems relevant to its determination.

(18) Revoked under different name, numerical identifier or business identity. The provider or supplier is currently revoked under a different name, numerical identifier, or business identity, and the applicable reenrollment bar period has not expired. In determining whether a provider or supplier is a currently revoked provider or supplier under a different name, numerical identifier, or business identity, CMS investigates the degree of commonality by considering the following factors:

(i) Owning and managing employees and organizations (regardless of whether they have been disclosed on the Form CMS–855 application).
(ii) Geographic location.
(iii) Provider or supplier type.
(iv) Business structure.
(v) Any evidence indicating that the two parties are similar or that the provider or supplier was created to circumvent the revocation or reenrollment bar

(19) Affiliation that poses an undue risk. CMS determines that the provider or supplier has or has had an affiliation under § 424.519 that poses an undue risk of fraud, waste, or abuse to the Medicare program.

(20) Billing from non-compliant location. CMS may revoke a provider’s or supplier’s Medicare enrollment or enrollments, even if all of the practice locations associated with a particular enrollment comply with Medicare enrollment requirements, if the provider or supplier billed for services performed at or items furnished from a location that it knew or should have known did not comply with Medicare enrollment requirements. In determining whether and how many of the provider’s or supplier’s enrollments, involving the non-compliant location or other locations, should be revoked, CMS considers the following factors:

(i) The reason(s) for and the specific facts behind the location’s noncompliance.
(ii) The number of additional locations involved.
(iii) Whether the provider or supplier has any history of final adverse actions or Medicare or Medicaid payment suspensions.
(iv) The degree of risk that the location’s continuance poses to the Medicare Trust Funds.
(v) The length of time that the noncompliant location was non-compliant.
(vi) The amount that was billed for services performed at or items furnished from the non-compliant location.
(vii) Any other evidence that CMS deems relevant to its determination.  

(21) Abusive ordering, certifying, referring, or prescribing of Part A or B services, items or drugs. The physician or eligible professional has a pattern or practice of ordering, certifying, referring, or prescribing Medicare Part A or B services, items, or drugs that are abusive, represents a threat to the health and safety of Medicare beneficiaries, or otherwise fails to meet Medicare requirements. In making its determination as to whether such a pattern or practice exists, CMS considers the following factors:

(i) Whether the physician’s or eligible professional’s diagnoses support the orders, certifications, referrals or prescriptions in question.
(ii) Whether there are instances where the necessary evaluation of the patient for whom the service, item or drug was ordered, certified, referred, or prescribed could not have occurred (for example, the patient was deceased or out of state at the time of the alleged office visit).
(iii) The number and type(s) of disciplinary actions taken against the physician or eligible professional by the licensing body or medical board for the state or states in which he or she practices, and the reason(s) for the action(s).
(iv) Whether the physician or eligible professional has any history of final adverse actions (as that term is defined in § 424.502).
(v) The length of time over which the pattern or practice has continued.
(vi) How long the physician or eligible professional has been enrolled in Medicare.
(vii) The number and type(s) of malpractice suits that have been filed against the physician or eligible professional related to ordering, certifying, referring or prescribing that have resulted in a final judgment against the physician or eligible professional or in which the physician or eligible professional has paid a settlement to the plaintiff(s) (to the extent this can be determined).
(viii) Whether any State Medicaid program or any other public or private health insurance program has restricted, suspended, revoked, or terminated the physician’s or eligible professional’s ability to practice medicine, and the reason(s) for any such restriction, suspension, revocation, or termination.
(ix) Any other information that CMS deems relevant to its determination.

Notably, under the Final Rule, 42 CFR § 424.535(c), the regulations setting out the rules for reapplying after a provider’s or supplier’s Medicare enrollment has been revoked, have been revised and enhanced. First, the maximum reenrollment bar for a first-time revocation has been extended to 10 years. 42 CFR § 424.535(c)(1)(i). Second, if a provider or supplier attempts to “circumvent its existing reenrollment bar by enrolling in Medicare under a different name, numerical identifier or business identity,” CMS can extend that provider’s or supplier’s existing reenrollment bar by 3 additional years.   See 42 CFR § 424.535(c)(2)(i).

Moreover, under 42 CFR § 424.535(c)(3), if a provider or supplier is being revoked from Medicare a second time, CMS may choose to impose a reenrollment bar of up to 20 years.  The factors to be considered by CMS when determining the proper length of a reenrollment bar are set out under 42 CFR § 424.535(c)(3), subsections (i) through (iii).

In an effort to further prevent improper attempts to reenroll in the Medicare program, 42 CFR § 424.535(c)(4) provides a reenrollment bar applies to a provider or supplier under any of its current, former or future names, numerical identifiers or business identities.”

XII.  Impact of the Final Rule on State Medicaid and CHIP Enrollment and Disclosure Practices:

Section 1902(kk)(3) of the Act,1 as amended by section 6401(b) of the Affordable Care Act, which mandates that states require providers and suppliers to comply with the same disclosure requirements established by the Secretary under section 1866(j)(5) of the Act. In other words, the increased disclosure requirements apply to providers and suppliers enrolling or revalidating in the Medicare or Medicaid programs. It also applies to changes of information that must be reported under the Final Rule.

As the Final Rule further notes, as long as they continue to work within the broad Federal framework, States have been delegated considerable flexibility in how they administer their Medicaid and CHIP programs.  Ultimately, the enrollment requirements established by a State must be consistent with section 1902(a)(23) of the Act and implementing regulations at 42 CFR § 431.51. As the Final Rule reflects, as long as a State meets its obligations under 42 CFR § 431.51, it is free to:

“. . . [S]et reasonable standards relating to the qualifications of providers but may not restrict the right of beneficiaries to obtain services from any person or entity that is both qualified and willing to furnish such services.”

XIII. Due Diligence and Credentialing Risks When Enrolling, Revalidating or Submitting a Change of Information:

The affiliation disclosure requirements set out in the Final Rule are anticipated to be gradually implemented by CMS over the next three years.  The agency contends that such an approach will better enable the provider and supplier communities to meet their affiliation, uncollected debt and adverse event reporting obligations. Unfortunately, the Final Rule imposes yet another unfunded obligation on participating providers and suppliers.  From a practical standpoint, the implementation of the Final Rule will have an enormous impact on the credentialing process.  Federal and State payors have historically used the credentialing process as their first line of defense with respect to program integrity. The disclosure obligations set out in the Final Rule are quite comprehensive. Third-party billing companies and credentialing companies handling these submissions on behalf of their provider and supplier clients will need to diligently work to better ensure that each submission is both accurate and complete before submitting the credentialing package to a Federal or State payor.  On the payor side of the credentialing equation, professional credentialing companies, (such as CredSimple), will likely see an exponential increase in the demand for their verification and screening services.  Moreover, we fully expect to see private payors, medical centers and hospital systems adopt program integrity safeguards similar to those outlined in the Final Rule as they take steps to protect their organizations from fraud, waste, and abuse.

XIV.  Final Thoughts:

As the Final Rule details, the Affordable Care Act imposed a number of enrollment and reenrollment disclosure obligations on Medicare, Medicaid, and CHIP providers and suppliers.  These revised reporting obligations are intended to prevent bad actors from circumventing the existing safeguards that had been implemented to guard against fraud, waste, and abuse.  CMS estimates that it will take at least several years for the agency to revise the various versions of its CMS Form 855 enrollment applications and fully implement the new reporting obligations.  The true enormity of these new obligations has yet to be realized.  Affiliations, disclosable events and uncollected debts will be carefully evaluated by CMS and weighed as the agency decides whether to deny an application for enrollment or revalidation or revoke an existing provider’s or supplier’s Medicare billing privileges.

Healthcare Attorney

Jennifer Papapanagiotou,
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Robert W. Liles Healthcare Attorney

Robert W. Liles,
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Now, more than ever before, it is important for providers and suppliers to effectively conduct due diligence before hiring managerial staff, purchasing or selling an entity, appealing an alleged overpayment and / or seeking relief in bankruptcy.  As the enrollment disclosure and reporting process moves towards full implementation, it will be essential for you to fully understand your obligations under the law.  The attorneys at Liles Parker have extensive experience representing providers and suppliers in the provider enrollment, revalidation, change of information and change of ownership process.  Our team has represented healthcare providers and suppliers around the country in the appeal of Medicare termination actions, enrollment denials, and the revocation of an entity’s billing privilegesQuestions?  Give Robert Liles or Jennifer Papapanagiotou a call.  For a free consultation, we can be reached at:  1 (800) 475-1906.

[1] 42 CFR § 424.516.

[2] CMS is the single largest health care insurance payor in the country.  Approximately 90 million individuals are currently covered by Medicare, Medicaid and / or the Children’s Health Insurance Program (CHIP) programs.

[3] 71 FR 20754.

[4] 76 FR 5861.

[5] 81 FR 10720.

[6] The Final Rule is effective on November 4, 2019.

[7] 84 FR 47794, 47797.

[8] 84 FR 47794, 47803.

[9] 84 FR47794, 47802.

[10] Under 42 CFR § 424.502, the term “managing employee” means:

a general manager, business manager, administrator, director, or other individual that exercises operational or managerial control over, or who directly or indirectly conducts, the day-to-day operation of the provider or supplier, either under contract or through some other arrangement, whether or not the individual is a W-2 employee of the provider or supplier.”

[11] 84 FR 47794, 47803, 47805.  In light of the concerns raised, CMS will be adopting a “phased-in” approach to complying with the requirements under 42 CFR §?424.519(b).  Under this phased-in approach, CMS will first be revised Form CMS-855 to cover the various disclosures required under the Final Rule.  Initially, providers and suppliers will not be required to disclose affiliations under 42 CFR §?424.519(b) unless CMS asks for this information.  While this approach will initially relieve providers and suppliers of the disclosure burden, CMS notes that this is not meant to be a permanent exemption.  Ultimately, providers and suppliers will be required to report any affiliations with one or more disclosable events.

[12] 84 FR 47794, 47807.

[13] CMS acknowledges in its response to comments in the Final Rule that the additional sub-regulatory guidance is needed to further clarify the “knew or should have known” standard.  See 84 FR 47794,47811.

[14] This is similar to CMS’ new expanded authority to deny enrollment if an owner or managing employee of a provider or supplier is under a payment suspension by Medicare or a state Medicaid program. Under this new denial authority, CMS will examine the degree of commonality between the applicant and other revoked providers and suppliers, looking specifically at the owning and managing employees and organizations of the applicant and a revoked provider or supplier, the applicant and revoked provider’s or supplier’s geographic location, provider or supplier type, business structures, and “any evidence indicating the two parties are similar or that the provider or supplier was created to circumvent the revocation or reenrollment bar.” 84 FR 47794, 47823.

A Civil Investigative Demand Issued to You or Your Medical Practice is Serious Business. Understand Your Level of Risk Before Responding to the Government’s Investigation

(September 17, 2019): The False Claims Act (31 U.S.C. §§ 3729-3733) is the primary civil enforcement tool relied on by the Federal government. It has a long and storied history, going back all the way to the Civil War.[1]  Prior to 1986, the statute was only infrequently utilized by law enforcement. That changed with the enactment of the “False Claims Amendments Act of 1986.”[2]  Among its many changes, the 1986 Amendments Act authorized the Attorney General to issue Civil Investigative Demands in connection with the investigation of False Claims Act cases.  Over the years, Civil Investigative Demands have greatly bolstered the effectiveness of the government’s ability to examine alleged violations of the False Claims Act.[3]

In 2009, Congress further expanded the use of Civil Investigative Demands when it passed the “Fraud Enforcement and Recovery Act of 2009”[4] (FERA).  Among its various provisions, FERA authorized the Attorney General to delegate his authority to issue Civil Investigative Demands to other Department of Justice (DOJ) officials. The Attorney General subsequently issued a directive in 2010 which delegated his authority to issue Civil Investigative Demands to the Assistant Attorney General for the Civil Division.  This directive also permitted the Assistant Attorney General for the Civil Division to redelegate the authority to issue Civil Investigative Demands to other DOJ Officials, including United States Attorneys.[5]

From a practical standpoint, the redelegation of authority to issue Civil Investigative Demands from the Office of the Attorney General to the 94 United States Attorneys Offices has greatly expanded the issuance of Civil Investigative Demands around the country.  This article examines the government’s use of Civil Investigative Demands as an investigative tool and discusses the steps you should take if the government issues one to you or your health care organization.

I.  What is a Civil Investigative Demand?

A Civil Investigative Demand is essentially a judicially enforceable administrative subpoena[6] that can be issued by a Federal prosecutor to obtain documentary materials and other information that may be in your possession, custody or control that the government believes may be relevant to an investigation of possible violations of the False Claims Act.  A Civil Investigative Demand is only issued in connection with an ongoing False Claims Act investigation.

When issued to you or your medical practice, this investigative tool can be used to require that the subject (recipient individual or entity) of a Civil Investigative Demand:

  • Produce such documentary material for inspection and copying,
  • Answer in writing written interrogatories with respect to such documentary material or information,
  • Give oral testimony concerning such documentary material or information,[7] or
  • Furnish any combination of such material, answers, or testimony.

II.  Are You or Your Medical Practice the Target of False Claims Act Investigation?

If you are sent a Civil Investigative Demand, it doesn’t necessarily mean that you are believed to have violated the False Claims Act. It’s possible that a Federal prosecutor believes that you are a mere witness or a custodian of the records or other information that is relevant to the government’s False Claims Act investigation.  If you are the subject or target of a False Claims Act investigation, it is quite common for the Assistant U.S. Attorney handing the matter to clearly identify you or your medical practice as such when issuing a Civil Investigative Demand. While the language utilized by the government may vary from case to case, letters sent to physicians and other health care providers / suppliers will typically state something along the lines of:

“This False Claims Act investigation concerns allegations that you, your medical practice, your employees, contractors, and agents, as well as other individuals or entities violated or conspired to violate the False Claims Act by submitting claims to Federal health benefit program for which you were not entitled to receive payment.”

After investigating suspected violations of the False Claims Act, the Attorney General (through his or her designee) may either bring a civil suit for violations of the False Claims Act OR elect to intervene in a qui tam case that has been brought by a private party.   Importantly, once the government either files a False Claims Act complaint or intervenes in a qui tam that has been filed, it loses its authority to issue a Civil Investigative Demand.[8]

III.  Do I have to Comply with the Requirements Set Out in a Civil Investigative Demand?

The evidence sought by a Civil Investigative Demand may be quite extensive and will likely include demands for documentary materials, electronic records and written responses to interrogatories.  Unfortunately, it may be quite costly and time-consuming for you to assemble the information requested and fully comply with the specifications set out in a Civil Investigative Demand.  Should you fail to comply with a Civil Investigative Demand, the government will likely file a petition in Federal District Court seeking judicial enforcement of the request.[9] As the government’s utilization of Civil Investigative Demands has increased, we have seen a number of challenges raised by recipients.

In one recent case, Federal prosecutors issued a Civil Investigative Demand in connection with their investigation of whether a physician had violated the Anti-Kickback Statute and Stark (which, depending on the facts, may also constitute a violation of the civil False Claims Act).[10]  The respondent recipient of the Civil Investigative Demand, a California-based orthopaedic surgeon, refused to comply with the government’s request, arguing that the DOJ lacked the authority to enforce the Civil Investigative Demand due to the fact that the government’s had allegedly entered into settlement communications with a related party.  Essentially, the respondent argued that the government’s settlement discussions with a related party constituted a determination that a basis for the physician respondent’s liability was present.  Therefore, the respondent physician took the position that the government had an obligation to move forward with litigation rather than continue to investigate.  In this case, since the government had not yet initiated a civil action and had not made an election related to actual qui tam litigation, the District Court that the Civil Investigative Demand should be enforced.

IV.  Risks Presented in Parallel Civil and Criminal Investigations of Your Conduct:

Although the issuance of a Civil Investigative Demand is reflective of the fact that a civil False Claims Act investigation is underway, it is important to keep in mind that the government may also have an open, ongoing criminal investigation related to the conduct that is under review. In recent years, this has become quite common, due in large part to more effective coordination efforts between civil litigators and criminal prosecutors in U.S. Attorneys Offices around the country.

It is the policy of the DOJ that its components (including U.S. Attorney’s Offices) employ a coordinated approach to litigating affirmative matters from the initial intake, throughout the investigation and to resolution.[11] DOJ requires “early, effective and regular communication” between all of its litigating components in order that it considers all potential remedies. Consultation between the Department’s civil and criminal attorneys, together with agency attorneys, are promoted to permit consideration of the fullest range of the government’s potential remedies and promotes the most thorough and appropriate resolution in each case. (criminal, civil, regulatory or administrative).

In some instances, concurrent criminal and civil investigations of individual misconduct are pursued. When this occurs, it is DOJ policy for the litigating components to coordinate the investigation and potential resolutions among themselves and with other stakeholders to the extent that the law permits. For example, criminal Assistant U.S. Attorneys are encouraged to use Administrative Investigative Demand (AID) subpoenas instead of Grand Jury subpoenas so that information obtained can be freely shared with their civil counterparts.  Similarly, civil Assistant U.S. Attorneys are required to share the information they obtain in response to Civil Investigative Demands and / or qui tam investigation with their criminal colleagues. Coordination is extended to all aspects of the investigation including consideration as to the apportionment of fines, penalties and/or forfeitures and the avoidance of the duplicative fines, penalties and/or forfeiture in its resolution. Parallel actions are also intended to facilitate the Department’s efforts to hold individuals as well as corporations accountable for malfeasance.

As earlier discussed, the fact that you are the recipient of a Civil Investigative Demand does not necessarily mean that you are the target of a government False Claims Act investigation. Instead, you may be considered a subject of the government’s False Claims Act investigation. Finally, you may be a mere witness.  Ultimately, a Federal prosecutor may choose to issue a Civil Investigative Demand if he or she believes that you have documentation or other materials that are relevant to the government’s investigation of possible violations of the False Claims Act.

A Civil Investigative Demand cannot be issued to investigation allegations that are solely criminal in nature (for example, the fraudulent billing of health care services to a private payor).  However, if a bona fide investigation of possible civil false claims is present, this tool can be used to investigation potential False Claims Act violations and other conduct that may constitute a violation of criminal law. In light of the nature of parallel proceedings, there are a number of risks that you should take into account when responding to a Civil Investigative Demand.  Several of these risks include:

  • Federal Anti-Kickback Statute (42 U.S.C. 1320a-7b(b)).  The Federal Anti-Kickback Statute[12] makes it a crime to knowingly and willfully offer, pay, solicit, or receive remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to purposefully induce or reward referrals of items or services payable by a federal health care program. Simply put, it is against the law to pay or provide anything of value in an effort to induce referrals or business related to a federal health care program.  While for many years the Federal Anti-Kickback Statute and the civil False Claims Act were long viewed as separate and distinct enforcement tools, over the past 20 years, the enforcement landscape has slowly changed. Starting in the early 1990’s, whistleblowers began asserting violations of the False Claims Act in cases that would typically be pursued as a criminal anti-kickback violation.  These cases often involved fact patterns where a party was alleged to have violated the Anti-Kickback Statute and, in the process, billed for services that were allegedly medically unnecessary (or, in some instances, worthless) and made a false express and / or implied certification to the Medicare or Medicaid program.  The 2010 passage of the Affordable Care Act (ACA) obviated the need to bootstrap a violation of the Anti-Kickback Statute into a violation of the civil False Claims Act.  Under the ACA, a claim submitted in violation of the Federal Anti-Kickback Statute now automatically constitutes a false claim for purposes of the civil False Claims Act.   Providers need to keep in mind that even though a kickback violation may also be pursued under the False Claims Act, that does not preclude the government from prosecuting individuals and entities for violations of the Anti-Kickback Statute.
  • False Statements Involving Health Care Programs (18 U.S.C. § 1035). Several examples we have seen have involved the (a) the misrepresentation of the provider of a medical service, (b) the misrepresentation of a non-covered service, and / or (c) the billing of services performed by unlicensed staff. Each of these examples may give rise to criminal and / or may also be pursued under the civil False Claims Act:
  • Misrepresentation of the Provider of a Service. This improper billing practice is still commonly found in both medical and dental practices around the country. In the cases we have seen, “fraud” wasn’t the reason for the underlying misrepresentation on the CMS 1500 Claims form. In most instances, it was merely a matter of a credentialing delay.  Although we have not seen a misrepresentation case of this type referred for criminal prosecution, it is important to remember that both CMS 1500s and ADA Dental Claim Forms Claims forms are typically electronically submitted to the health plan for payment.  Depending on the facts, an aggressive prosecutor could argue that such conduct constitutes a criminal false statement under 18 U.S.C. § 1035 or even wire fraud under 18 U.S.C. §1343.
  • Misrepresentation of a Non-Coverage Service. This type of improper billing practices occurs when a medical or dental practice has mischaracterizes a non-covered service as a covered service. Keep in mind, the definition of a non-covered service varies from payor to payor. Additionally, the list of non-covered services under a specific payor’s policy may change from year-to-year.  In any event, it is important that health care providers regularly check to ensure that the services being provided qualify for coverage and payment.
  • Billing for Medical or Dental Services Performed by Unlicensed Staff. Perhaps the quickest way to get into trouble with both law enforcement and your State Medical Board or State Dental Board is to allow non-licensed individuals to provide care that may only be administered by qualified, licensed personnel. Earlier this year, the New York Attorney General’s Office announced the indictment, arrest and arraignment of a health care provider and four unlicensed individuals that the provider was permitting to perform medical related procedures on more than 100 Medicaid patients. From a false claims perspective, the billing of Medicare and / or Medicaid services by unlicensed staff would constitute the misrepresentation of the credentials of the staff member at issue and would not qualify for reimbursement.

These are only a few of the risks that you face when a government investigation of your business arrangements, and billing / coding practices is initiated. When responding to a Civil Investigative Demand, it isn’t merely sufficient to produce the information requested. A careful analysis of your practices needs to be conducted on the front end so that any problematic conduct can be identified and assessed. Experienced health care legal counsel can then more effectively represent you and your practice.

V.  How Should You Respond to a Civil Investigative Demand?

For the reasons set out above, we strongly recommend that you engage counsel as soon as you receive a Civil Investigative Demand.  Your attorney can then take the lead and contact the Assistant U.S. Attorney[13] handling the False Claims Act investigation. Additional steps you should take include, but are not limited to:

  • Determine the nature of your involvement in the government’s investigation. Does the government consider you or your practice to be a target, a subject or a witness?  Are both civil and criminal allegations present?  If the possibility of criminal culpability has been identified, it is essential that your legal counsel advise you on any steps needed to properly safeguard your interests.
  • Don’t turn what may be a civil problem into a criminal case. Steps should immediately be taken to ensure that no documentation (either paper or electronic) is destroyed, deleted or over-written. Your attorney can guide you in this document preservation process. The last thing you want to do is take an action in a civil False Claims Act investigation that might constitute a separate criminal violation (such as obstruction of justice).  Once the proverbial fog lifts, your attorney will likely be able advise you whether it is permissible to resume getting rid of documents that have no bearing on the government’s case.
  • Have experienced health law counsel handle scope and timing negotiations with the government. Civil Investigative Demands are often excessively broad in scope and typically request large numbers of medical or dental records and claims information.  Moreover, under the statute you have very little time to produce the materials being sought by a Civil Investigative Demand. Your attorney will likely try and work with the government attorney handling the investigation to obtain an extension of time in which to submit the requested documents.[14]  Your attorney will also try and work with the government attorney to see if the scope can be narrowed (at least at first).  Finally, your attorney will want to try negotiate for the documents and information to be produced to be submitted on a “rolling” basis.
  • Diligently work to identify and address the government’s concerns. It has been our experience that most Assistant U.S. Attorneys are willing to engage (at least in a limited fashion) in a discussion regarding the nature of the government’s concerns. This information can be crucial in assessing the conduct, responding to the government’s concerns, and, if necessary, preparing your defense(s) in the case. Keep in mind, at this point, the government hasn’t filed a False Claims Act complaint and hasn’t intervened in the whistleblower’s case (to the extent that one exists).  Now is the time to do your very best to analyze the facts and respond to the allegations presented.
  • Take care before “Certifying” your responses under the Civil Investigative Demand. As required under 31 U.S.C. § 3733(f)(1), when you produce documentary materials in response to a Civil Investigative Demand, it must be made under a “Sworn Certificate.”  31 U.S.C. § 3733(f)(1), The Sworn Certificate is required to state that:

“. . . all of the documentary material required by the demand and in the possession, custody, or control of the person to whom the demand is directed has been produced and made available to the false claims law investigator identified in the demand.”[15]

As with any certification made to the government, you must exercise caution when making the representations required under 31 U.S.C. § 3733(f)(1).  Should your responses to the Civil Investigative Demand be false or misleading, the government may assert that you have made a false statement (assuming that the requisite level of intent can be shown).

As reflected by the risks discussed above, if you or your practice are the recipient of a Civil Investigative Demand, you should immediately contact a qualified health lawyer.  The issuance of a Civil Investigative Demand raises a number of complex regulatory questions that must be fully vetted.  Have you received a Civil Investigative Demand?  Give us a call for a free consultation.  1 (800) 475-1906.

 

Robert W. Liles Healthcare LawyerRobert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law.  Liles Parker attorneys represent health care providers and suppliers in connection with False Claims Act issues and investigations.  Have you received a Civil Investigative Demand?  If so, we can help.  For a free initial consultation regarding your situation, call Robert at: 1 (800) 475-1906.

[1] For additional background information on the False Claims Act, see False Claims Act Matters and Cases — An Overview.”  

[2] Public Law 99-562.  October 27, 1986.  Senator Charles Grassley (R-Iowa) and Representative Howard Berman (C-California) led the drive to have these amendments passed. Several of the significant changes to the statute included, but were not limited to the following:

  • Permitted the government to seek treble damages.
  • Revised the statute’s qui tam provisions by increasing the incentives to whistleblowers disclosing allegations of fraud under the False Claims Act.
  • Conferred authority upon the Attorney General to issue Civil Investigative Demands (CIDs) in connection with the investigation of False Claims Act investigations.

[3] Last Fiscal Year (FY 2018), the Federal government won or negotiated more than $2.8 billion in judgments and settlements under the False Claims Act. Of the $2.8 billion in settlements and judgments recovered by the Department of Justice this past fiscal year, $2.5 billion involved the health care industry.  Although the gross recoveries were almost $600 less than what was collected in FY 2017, it is worth noting that an additional $329 million was collected in health care related cases than last year.  During FY 2018, 645 qui tam (whistleblower) cases were filed. About 87% of all new FCA matters pursued against entities involved in the healthcare industry were brought by relators.

[4] P.L.111-21 (FERA).  FERA also permitted Federal prosecutors to share information obtained under a Civil Investigative Demand with “any person” (most typically a qui tam relator)(See 31 U.S.C. § 3733(a)(1) and with Federal prosecutors conducting criminal investigations if the Attorney General or designee has reason to believe that such person may be in possession, custody, or control of any documentary material or information relevant to a False Claims law investigation.

[5] In 2010, the Attorney General signed Order No. 3134-2010 (January 15, 2010).

[6] See United States v. Markwood, 48 F.3d 969, 975-76 (6th Cir. 1995) (finding FCA CIDs are administrative subpoenas); FTC v. Invention Submission Corp., 965 F.2d 1086, 1087 (D.C. Cir. 1992) (treating FTC CID as administrative subpoena), cert. denied, 507 U.S. 910 (1993); United States v. ASG Solutions Corp., No. 17-cv-1224, 2018 WL 1418023, 2018 U.S. District LEXIS 47716 (S.D. Cal., March 22, 2018) (Report and Recommendation of Magistrate Judge) (enforcement of FCA CID governed by standards for administrative subpoenas), adopted in full, 2018 WL 3471405, 2018 U.S. Dist. LEXIS 121013 (S.D. Cal., July 18, 2018).

[7] Under a Civil Investigative Demand, the government may seek oral testimony concerning the documents and / or information that you are producing. The oral testimony is handled like a deposition, the deponent is placed under oath and a stenographic record of the proceeding is kept.

[8] For example, in the case United States v. Kernan Hospital, No. RDB-11-2961, 2012 WL 5879133, 2012 U.S. Dist. LEXIS 165688 (D. Md., Nov. 20, 2012), the district court denied the government’s Petition for Summary Enforcement based on the fact that the United States had already filed an FCA complaint in the caseThe District Court took this position even though the case had been dismissed (for failure to plead the alleged fraud with particularity) at the time the Civil Investigative Demand was issued.

[9] The scope of judicial review that is conducted by a District Court Judge when the government seeks to enforce a Civil Investigative Demand is very narrow.  As the Ninth Circuit has stated:

 “[t]he scope of the judicial inquiry in . . . any . . . agency subpoena enforcement proceeding is quite narrow. The critical questions are: (1) whether Congress has granted the authority to investigate; (2) whether procedural requirements have been followed; and (3) whether the evidence is relevant and material to the investigation.” EEOC v. Fed. Express Corp., 558 F.3d 842, 848 (9th Cir. 2009) (quoting EEOC v. Karuk Tribe Hous. Auth., 260 F.3d 1071, 1076 (9th Cir. 2001)).

[10] United States v. Picetti, No. 2:19-cv-00049 KJM AC (E.D. California)(April 29, 2019).

[11] Justice Manual Chapter 1-12.000; updated in November 2018, See also, Memorandum entitled “Coordination of Parallel Criminal, Civil, Regulatory and Administrative Proceedings, from the Attorney General to all Litigating Divisions and All Trial Attorneys, dated January 30, 2012, found as Civil Resource Manual 228 and Criminal Resource Manual 2464.

[12] Under the Bipartisan Budget Act of 2018 (effective February 9, 2018), Criminal penalties for acts involving Federal health care programs under 42 U.S.C. § 1320a–7b, including but not limited to the Anti-Kickback Statute, were increased from $25,000 to $100,000. Additionally, the maximum sentences for felonies involving Federal health care program fraud and abuse under 42 U.S.C. § 1320a–7b, including but not limited to the Anti-Kickback Statute, were increased from five to ten years.

[13] Infrequently, we have seen prosecutors from the State Attorney General’s Office issue a CID.

[14] Pursuant to 31 U.S.C. §3733, you will only have twenty days in which to respond to a Civil Instigative Demand, unless an extension is granted by the government.  Additionally, if a request for oral testimony is being sought, you may have as little as seven days within which to respond.

[15]31 U.S.C. § 3733(f)(1)(B).

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

Non-Credentialed 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 Healthcare AttorneyRobert 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 21st 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?

Genetic Testing(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. § 1347Health 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 Healthcare AttorneyRobert 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

Home Health Agency Alert: The Review Choice Demonstration Project start dates for Ohio, Texas, North Carolina and Florida are Around the Corner!

August 7, 2019 by  
Filed under Home Health & Hospice

The Review Choice Demonstration Project starts(August 7, 2019): This article further updates our articles of February 19th and April 9th on the announcement by CMS of the implementation of the new five year “Review Choice Demonstration Project’ in five states – Illinois, Ohio, Texas, North Carolina and Florida, and the start date for the Demonstration Project in Illinois.

 

I. Background of the Review Choice Demonstration Project:

As background, the Review Choice Demonstration Project is an outgrowth of the Pre-Claim Review Demonstration Project that was initiated in Illinois in August 2016 and paused in April 2017.  Instead of continuing the Pre-Claim Review Demonstration, the Centers for Medicare and Medicaid Services (CMS) announced a new initiative – the Review Choice Demonstration Project to be phased in for the five states listed, above.

Under the Review Choice Demonstration Project, agencies in the affected states will initially select from three options to have their home health claims reviewed:

  • Pre-claim review;
  • Post-payment review; or
  • Minimal post-payment review with a 25% reduction.

After each six-month period agencies with a 90% affirmation or approval rate will be able to choose from two additional options that may be preferable depending upon the circumstances of each agency.  Our February 19th article discusses each of these options.

II. Illinois Home Health Claims are Under the Microscope:

The Review Choice Demonstration Project initially began in Illinois on June 1 for all episodes of care beginning on that date. Prior to that date, Illinois agencies were required to make a selection as to the initial option that they chose for this period between April 17 and May 16.

On July 29, 2019, CMS announced that Ohio will be the second State to implement the Review Choice Demonstration Project.  Home health agencies in Ohio will have from August 16th to September 15th to select an option for the first six-month period, which will begin on September 30, 2019 for all episodes of care starting on or after that date.  Any agency that fails to select an option during this period will be assigned to the second option, above – post-payment review.[1]

CMS also announced that it anticipates 60 – 90 days between beginning the Demonstration in the remaining states of Texas, North Carolina and Florida, and will provide 60-days’ notice in advance of the start date.  While the announcement is somewhat unclear as to whether this period will be spread out for each remaining state or that all three will start on the same date, it is clear that agencies in each of those states and Ohio should begin planning now for that implementation if they have not already done so.

CMS has published links to the Palmetto GBA portal for selecting and registering an option during this period as well as a number of additional resources at https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Review-Choice-Demonstration/Review-Choice-Demonstration-for-Home-Health-Services.html.

III.  Planning for Implementation – Especially in Light of PDGM:

Our February 19th article goes into greater depth in explaining the various options.  However, most importantly, both articles emphasize the importance of thinking through which option makes the most sense for your agency.

Each one presents risks and benefits and the correct choice may differ depending upon the agency’s comfort and experience with denials and documentation, as well as operational capability – the one exception being that the third option – a 25% rate reduction, does not appear to be viable for any agency.  Our earlier articles also sets forth several examples of those risks and benefits and while not exhaustive, is meant to focus agencies on the thought process that your agency will want to consider in making this determination.  We thus cannot strongly enough recommend that each agency take the necessary time to consult with knowledgeable individuals both internal and external in making this determination for each 6-month period, and not wait until the last minute to do so.

Of equal, or perhaps greater, importance is the need for agencies in affected states to have procedures in place to prepare and quickly access documentation to properly support coverage for the cases that they take, and to move this documentation through the system quickly, accurately, and comprehensively.  This is especially important given the advent of the Patient- Driven Groupings Model (PDGM) on January 1, 2020.  For example, coding will be a key issue in driving coverage and payment, and “getting it right” in your documentation will be critical.  Also, addressing initial non-affirmation determinations quickly for agencies that select option 1 will be critical.

Finally, agencies should be updating their compliance and quality assurance programs to respond both to the PDGM payment model and to the Review Choice Demonstration Program.

Liles Parker attorneys have substantial experience in advising and working with home health agencies in preparing them for the audit process which is similar to the process that they will need in responding to the Review Choice Demonstration Project, and in identifying the risks of choosing one option in relation to the others.  For example, one of the additional two options available to agencies that score above the 90% affirmation or approval level in options 1 or 2 during a 6-month period may result in the inadvertent development of a statistical sample that can be utilized to broaden the scope of any denials and recovery.  A number of our attorneys are also Certified Professional Coders who have substantial experience in evaluating home health claims documentation. Finally, we have substantial experience in working with home health agencies in developing and updating their compliance plans.

Michael Cook Healthcare AttorneyAny person wishing a free consultation in this area should contact Michael Cook, the author of this article and Co-chair of the Health Care Group.  Michael Cook can be reached at (202) 298-8750 and mcook@lilesparker.com.

 

[1] We would also note that there was a misprint in our article of April 9.  That article inadvertently referenced that Illinois providers failing to make a choice during the initial registration period would be assigned to the third option.  The corrected reference is to the second option.

Home Health Agency Alert: The Review Choice Demonstration Project is Moving Forward in Illinois Effective June 1, 2019

April 9, 2019 by  
Filed under Home Health & Hospice

Review Choice Demonstration Project in Illinois(April 9, 2019): This article updates our article of February 19 on the lifting by the Centers for Medicare and Medicaid Services (“CMS”) of the moratorium on the enrollment of new home health agencies in Florida, Illinois, Michigan and Texas, and the announcement by CMS of the implementation of a new five year “Review Choice Demonstration Project” in three of those four states (Florida, Illinois, and Texas) as well as Ohio and North Carolina (with a possible extension to other states within the Palmetto/JM jurisdiction).

At the time of that article, CMS had announced that the project would begin in Illinois, with implementation in the other four states in the near future thereafter.  However, CMS had not specified a “start date” for Illinois because it was awaiting approval by the Office of Management and Budget (“OMB”) at that time.  CMS has now received that approval and has announced implementation in Illinois to begin on June 1, 2019.  All episodes of care beginning on or after that date during the period of the demonstration will be subject to the requirements of the project.

I.  Background of the Review Choice Demonstration Project:

As background, under the Review Choice Demonstration Project, home health agencies in the affected states will initially select from three options to have their claims reviewed:

  • Pre-claim review
  • Post-payment review, or
  • Minimal post-payment review with a 25% reduction.

After each six-month period, agencies with a 90% affirmation or approval rate under one of the first two options, above, will also be able to choose between two additional options.  Each of these options is described in our February 19 article.

II.  Illinois Home Health Agencies are Under the Microscope:

Home health agencies located in Illinois must choose and register for one of the three options, above, between the dates of April 17 and May 16 on a portal established by Palmetto GBA.  Any agency that fails to make a choice during that period will be assigned to the third option and will not be able to change that option during the entire five-year period, and thus will receive a 25% payment reduction during this entire time.

As discussed in our February 19 article, the Review Choice Demonstration is an outgrowth of the Pre-claim Review Demonstration for Home Health Services that had been initially implemented in Illinois and then “paused” and never “restarted.”  However, Illinois agencies that had met the 90% full provisional affirmation rate under that project (based on a minimal 10 request submission between August 2016 and March 2017) will be permitted to begin the Review Choice Demonstration by selecting from any of the options including the additional ones available to agencies with a 90% affirmation or approval rate during a 6-month period.

CMS has established links to both the Palmetto GBA portal described, above, and to an operational guide and Special Open Door Forum Presentation that describes the program at https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Review-Choice-Demonstration/Review-Choice-Demonstration-for-Home-Health-Services.html.

III.  Is Your Home Health Agency Ready for an Audit?

Our earlier article goes into greater depth in describing the various options.  That article also emphasizes the critical nature of the choice that each agency makes in selecting an option.

Each of the options presents a separate set of risks and benefits as opposed to the others – the one exception being that the third option of a 25% payment denial does not appear to be a viable one for any agency.  Our earlier article also sets out several examples of these risks.  We thus recommend that every agency take the necessary time to consult with knowledgeable individuals, both internal and external, in making this selection during each 6-month period.

Additionally, as stated in that article, we cannot recommend strongly enough that agencies in the affected states have procedures in place to properly document coverage for all the cases that they handle, and also a process to prepare and move documentation through the system quickly and comprehensively.  They also should be updating their compliance and quality assurance programs to respond to these changes.

Liles Parker attorneys have substantial experience working with home health agencies in preparing them for the audit process which is similar to the processes that they will need to follow in responding to the Review Choice Demonstration Project, and in identifying the risks of choosing one option in relation to the others.  A number of our attorneys are also certified coders who have substantial experience in developing a format to justify coverage.  Finally, we have substantial experience working with agencies in developing and updating their compliance plans.

Healthcare LawyerAny person wishing a free consultation in the area should contact Michael Cook, the author and Co-chair of our Health Care Group. Michael can be reached at (202) 298-8750 or mcook@lilesparker.com

Texas Prosecutors are Aggressively Targeting Criminal Home Health Fraud

January 9, 2019 by  
Filed under Home Health & Hospice

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

I. Texas Home Health Prosecutions in Calendar Year 2018:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

III.  Conclusion:

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

Robert Liles Healthcare LawyerRobert 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).

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

Audits of Telehealth Services are Increasing(Updated September 22, 2019): 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:

(2019):   New Jersey.  In this case, a New Jersey physician plead guilty to working for two telemedicine companies for which he wrote medically unnecessary orders for orthotic braces for Medicare beneficiaries His conduct resulted in $13 million in losses to Medicare.  

(2019):  New York.  The government recently charged an anesthesiologist fir her role in telemedicine fraud.  The physician allegedly ordered and prescribed durable medical equipment (DME) and prescription drugs in connection with purported telemedicine services. The government claims that the physician and other providers signed prescriptions and order forms for DME and drugs that were not medically necessary and that were induced by kickbacks, and provided for beneficiaries whom Steiner and others had not examined and evaluated.

(2019):  Medellin, Colombia. In this case, the owner of a telemedicine company admitted that he and others agreed to solicit and receive illegal kickbacks and bribes from patient recruiters, pharmacies, brace suppliers and others in exchange for arranging for doctors to order medically unnecessary orthotic braces (braces) for beneficiaries of Medicare and other insurance carriers.  The beneficiaries were contacted through an international telemarketing network that lured hundreds of thousands of elderly and/or disabled patients into a criminal scheme that crossed borders, involving call centers in the Philippines and throughout Latin America.

(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:

Service

HCPCS / CPT Code

Telehealth consultations, emergency department or initial inpatient          

HCPCS codes G0425–G0427

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

HCPCS codes G0406–G0408

 

Office or other outpatient visits

CPT codes 99201–99215

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

CPT codes 99231–99233

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

CPT codes 99307–99310

 

Individual and group kidney disease education services

HCPCS codes G0420 and G0421

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

HCPCS codes G0108 and G0109

Individual and group health and behavior assessment and intervention

CPT codes 96150–96154

 

Individual psychotherapy

CPT codes 90832–90834 and 90836–90838

Telehealth Pharmacologic Management

HCPCS code G0459

Psychiatric diagnostic interview examination

 

CPT codes 90791 and 90792

 

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

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

 

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

CPT code 90963

 

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

CPT code 90964

 

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

 

CPT code 90965

 

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

CPT code 90966

 

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

CPT code 90967

 

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

CPT code 90968

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

CPT code 90969

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

CPT code 90970

Individual and group medical nutrition therapy

HCPCS code G0270 and CPT codes 97802–97804

Neurobehavioral status examination

CPT code 96116

Smoking cessation services

HCPCS codes G0436 and G0437 and CPT codes 99406 and 99407

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

HCPCS codes G0396 and G0397

Annual alcohol misuse screening, 15 minutes

HCPCS code G0442

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

HCPCS code G0443

Annual depression screening, 15 minutes

HCPCS code G0444

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

HCPCS code G0445

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

HCPCS code G0446

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

HCPCS code G0447

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

CPT code 99495

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

CPT code 99496

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

CPT code 99497

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

CPT code 99498

Psychoanalysis

CPT code 90845

Family psychotherapy (without the patient present)

CPT code 90846

Family psychotherapy (conjoint psychotherapy) (with patient present)

CPT code 90847

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

CPT code 99354

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

CPT code 99355

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

CPT code 99356

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

CPT code 99357

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

HCPCS code G0438

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

HCPCS code G0439

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

HCPCS code G0508

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

HCPCS code G0509

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

HCPCS code G0296

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

CPT code 90785

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

CPT codes 96160 and 96161

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

HCPCS code G0506

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

CPT codes 90839 and 90840

 

 

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

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

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

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

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

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

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

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

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

[9] Ibid, page 5.

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

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