Liles Parker PLLC
(202) 298-8750 (800) 475-1906
Washington, DC | Houston, TX
San Antonio, TX | Baton Rouge, LA

We Defend Healthcare Providers Nationwide in Audits & Investigations

Exclusion Screening Enforcement Actions by OIG are Increasing.

Exclusion screening enforcement by OIG and state officials is increasing.

(December 8, 2015): Since the passage of the Patient Protection and Affordable Care Act of March 2010[1] (ACA) and progeny such as the HITECH Act [2], enforcement efforts have been better funded and consequently, better staffed. The enactment of HIPAA in 1996 [3] and the Balanced Budget Act (BBA) of 1997 [4], further expanded the OIG’s sanction authorities and scope of current CMP and exclusion authorities beyond programs funded by the Department to all “Federal health care programs.” Further, on May 31, 2011, CMS published guidance to providers regarding the enforcement of ACA Section 6501.

 

As the ACA requires:

Termination of Provider Participation Under Medicaid and CHIP

Section 6501 of the Affordable Care Act, Termination of Provider Participation Under Medicaid if Terminated Under Medicare or Other State Plan amends section 1902(a)(39) of the Social Security Act and requires States to terminate the participation of any individual or entity if such individual or entity is terminated under Medicare or any other Medicaid State plan. (emphasis added) [5] On February 2, 2011, the Centers for Medicare & Medicaid Services (CMS) published the final rule implementing this provision, applicable to terminations occurring on or after the statutory effective date of January 1, 2011 [6]

Subsequently, the U.S. Department of Health and Human Services (HHS) Office of the Inspector General (OIG) is now engaging a specialized task force to check for excluded individuals. 2015 Enforcement Actions demonstrate a much higher focus on, among other areas, reviewing providers against employing excluded individuals than in previous years. While this was a relatively easy compliance area to meet, since the OIG issued its Special Advisory Bulletin and amended its Self-Disclosure Protocol in May and June of 2013, it has since become a hotbed of government reviews, tighter restrictions, shorter compliance deadlines and higher civil monetary penalties. As a result, checking exclusion lists has moved from being one of the easiest compliance steps for a provider to undertake, to being an essential compliance step for every provider.

I. So many exclusion screening databases to check, so little time…

A health care provider, biller, or supplier must check both federal exclusion screening databases including, the List of Excluded Individuals/Entities (LEIE), and the System for Award Management (SAM), formerly maintained by the General Services Administration (GSA), and the currently 38 existing State OIG Medicaid exclusion databases on a regular basis. In New York and Texas, this means monthly (every 30 days), and the list of states adding the monthly requirement continues to grow. Some providers find it difficult to devote the staff and man-hours required to perform this task. Exclusion database review services, such as Exclusion Screening, LLC, allow these providers to perform the voluminous task of searching and documenting the employee searches on multiple state databases.

II.  Formerly excluded employees or applicants must take affirmative steps to be taken off of the list of excluded individuals.

Employers should also be wary of employees who state they were previously excluded, but the exclusion period has run and they are no longer on the list. Simply stated, exclusions do not expire because there is no automatic reinstatement provision. A health care provider must apply to HHS OIG to be reinstated and to any State where they were previously excluded to be allowed to again participate. The individual must be approved and a written letter received before they can again work for a participating provider without breaking the law and risking penalty. As OIG’s website states:

Reinstatement of excluded entities and individuals is not automatic once the specified period of exclusion ends. Those wishing to again participate in the Medicare, Medicaid and all Federal health care programs must apply for reinstatement and receive authorized notice from OIG that reinstatement has been granted [7].

OIG has the authority to exclude individuals and entities from Federally funded health care programs pursuant to sections     1128 External link and 1156 External link of the Social Security Act External link and maintains a list of all currently excluded individuals and entities called the List of Excluded Individuals and Entities (LEIE). Anyone who hires an individual or entity on the LEIE may be subject to civil monetary penalties (CMP).[8] If an individual is excluded, and the employer participates in federal programs, the employee must be terminated. If an employee was excluded and states the period has run and they are no longer excluded, they must apply for reinstatement to OIG. Reinstatement is not automatic. OIG will send written notice if the application is accepted. The employee must wait until their name is removed from the exclusions list. Then the employee may again work for a provider who participates in a federally funded healthcare program. Finally, employers should remember that where an excluded individual provided services or items, directly or indirectly (as in administrative support) to Medicare, Medicaid or another federally funded health care program, such claims are tainted under the False Claims Act and may be subject to fines and penalties as previously stated.

An excluded party is in violation of its exclusion if it furnishes to Federal program beneficiaries items or services for which Federal health care program payment is sought. An excluded individual or entity that submits a claim for reimbursement to a Federal health care program, or causes such a claim to be submitted, may be subject to a CMP of $10,000 for each item or service furnished during the period that the person or entity was excluded (section 1128A(a)(1)(D) of the Act). The individual or entity may also be subject to treble damages for the amount claimed for each item or service. In addition, since reinstatement into the programs is not automatic, the excluded individual may jeopardize future reinstatement into Federal health care programs (42 CFR 1001.3002).

III. A partial list of OIG’s 2015 exclusion screening enforcement actions.  Are you ready if audited in 2016?

In August 2015, HHS published a study which exposed a loophole in exclusion enforcement in Medicaid managed care programs. [9] It found that 25 States did not require providers who participated via managed care to be directly enrolled with the State. Texas requires every provider who treats Medicaid patients to enroll in the program.

Federal enforcement actions in 2015 increasingly assessed Civil Monetary Penalties against health care providers who employ excluded individuals. The number of enforcement actions and the amounts of penalties continue to trend upward. Note that enforcement is ongoing all over the country and for all types of provider entities.

This is particularly noteworthy for Texas providers, because in the HHSC Inspector General’s Quarterly Report to the Governor, September 21, 2015, new Texas Inspector General Stuart W. Bowen emphasized to Governor Greg W. Abbott that HHSC OIG is “clearing the decks” of old business and settling outstanding cases in anticipation of a concentrated effort beginning January, 2016 in increased effort in all areas, with a particular emphasis on the area of managed care fraud enforcement. This does not mean other providers will be neglected. Indeed, Mr. Bowen’s reputation as an overachiever at the national level means that exclusion screening will receive additional attention at the state level, whether in the managed care setting, or in the provider setting.

Providers should remember that claims tainted by utilization of services by an excluded individual date back to the date of hire and continue through the date of termination. The False Claims Act imposes a potential liability of $5,500-$11,000 and treble damages along with CMPs of up to $10,000 per violation. In § 3729(b)(1) of the False Claims Act, knowledge of false information is defined as being (1) actual knowledge, (2) deliberate ignorance of the truth or falsity of the information, or (3) reckless disregard of the truth or falsity of the information. That means a negligent failure to check the databases for excluded individuals will be regarded by the government as “knowledge” in the filing of false claims. The more immediate threat to providers comes in the form of Civil Monetary Penalties and return of overpayments, which must be made within 60 days from the time they are discovered and verified.

The following examples of enforcement actions taken by the federal government in 2015 illustrates that all providers and all areas of health care are subject to these increasing Civil Monetary Penalties. Avoiding this potential liability is relatively simply, though labor intensive. However, the cost of failing to do so has risen to the point where the survival of your practice or business may be jeopardized by your failure to do so.

02/04/15 – A California hospital agreed to pay $121,316.55 in CMPs to settle OIG allegations it employed someone it knew or should have known was excluded from California Medicaid.

02/25/15 – A Denver, CO skilled nursing facility agreed to pay $242,434.92 in CMPs because it had employed an excluded nurse. No payment may be made by any Federal health care program for any items or services furnished by an excluded individual.

03/17/15 – A Wilkes-Barre, PA healthcare staffing agency agreed to pay $24,775.56 to settle allegations it employed an LPN who was excluded from any Federal health care program.

03/19/15 – A Skokie, IL home health agency employed an excluded nurse. As a result the HHA was excluded for three (3) years from participation in all Federal health care programs.

03/13/15 – A northeast IN / northwest OH community-based health system entered into a $129,216.80 settlement agreement with OIG for employing an excluded lab tech.

03/31/15 – A Farmville VA mission and rehabilitation facility paid $399,573.85 in CMPs for employing an individual it knew or should have known was excluded from Federal programs.

04/16/15 – A Drexel, PA personal in-home care provider paid $69,130 in CMPs for employing an excluded individual for 18 months between July 2010 and December, 2011.

04/10/15 – a Winter Park, FL mental health counselor agreed to pay $120,000 in CMPs and was excluded for twelve (12) years from participation all federal health care programs for allegedly using an Orlando physician to submit claims for services not rendered or not supervised by a licensed physician.

04/27/15 – An Arlington, TX skilled nursing facility agreed to pay $70,000 in CMPs to OIG for allegedly employing an excluded licensed vocational nurse.

04/27/15 – An Beaumont, TX skilled nursing facility agreed to pay $163,740.54 in CMPs to OIG for allegedly employing an excluded individual.

05/13/15 – A Maryland cardiology practice paid $134,506.47 in CMPs for allegedly employing an individual it knew or should have known was excluded from participation in Federal programs.

05/14/15 – A Houston, TX respiratory and sleep disorder specialist agreed to pay $152,821.07 in CMPs to OIG for fraudulent claims provided at a non-participating facility using its NPI number.

06/01/15 – A Waco, TX managed care provider agreed to pay $100,000 in CMPs to OIG to settle allegations they employed 3 excluded individuals who provided items and services to Federal health care programs beneficiaries.

06/08/15 – A Dallas, TX area skilled nursing facility agreed to pay $77,772.08 to settle allegations it employed a certified nurse’s aide who was excluded from Federal programs.

IV.  Final Remarks:

As a final item, one should remember that both the ACA and Texas Medicaid require that all providers have a compliance plan in place. Exclusion screening, while very important, is just one part of a comprehensive, effective compliance program that every provider is required to have. Staying in compliance is the single best and necessary means to minimize your risk of liability.

For additional reading and guidance regarding exclusions, reinstatement, and the potential penalties for employing an excluded individual, please reference HHS OIG’s Special Advisory Bulletins from September 1999 and May 8, 2013 [10].   For questions regarding creating a compliance for your health care practice or business, please contact Richard B. Pecore at Liles Parker, PLLC at (202) 298-8750 or rpecore@lilesparker.com .

Pecore, RichardRichard Pecore, Esq. is a health law attorney with the firm, Liles Parker, Attorneys & Counselors at Law.  Liles Parker has offices in Washington DC, Houston TX, McAllen TX and Baton Rouge LA.  Our attorneys represent dentists, orthodontists and other health care professionals around the country in connection with government audits of Medicaid and Medicare claims, licensure matters and transactional projects.  Need assistance?  For a free consultation, please call: 1 (800) 475-1906.

Join me on Thursday, December 10th for our free monthly webinar presentation where we will discuss what areas of government enforcement providers can expect HHS-OIG and Texas HHSC-OIG to focus on in 2016.

[1] The Patient Protection and Affordable Care Act, Pub. L. 111-148, as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. 111-152, together called the “Affordable Care Act.” 42 U.S.C. § 18001 (2010).

[2] The American Recovery and Reinvestment Act of 2009 (ARRA) Public Law No. 111-5, 123 Stat. 115, included the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), 42 U.S.C. §17935.

[3] Health Insurance Portability and Accountability Act of 1996 (HIPAA), Public Law 104–191.

[4] Public Law 105-33.

[5] Although Section 6501 of the Affordable Care Act does not specifically include terminations from CHIP, CMS has required CHIP, through Federal regulations, to take similar action regarding termination of a provider that is also terminated or had its billing privileges terminated under Medicare or any Medicaid State plan.

[6] CMS Bulletin dated 05/31/11, CPI-B 11-05, 6501-Term.pdf https://downloads.cms.gov/cmsgov/archived-downloads/CMCSBulletins/downloads/6501-Term.pdf , last accessed 12/03/15.

[7] http://oig.hhs.gov/exclusions/reinstatement.asp

[8] See HHS-OIG website, Exclusions http://oig.hhs.gov/exclusions/background.asp, last accessed 12/08/15.

[9] Supra at Footnote 7.

[10] http://oig.hhs.gov/exclusions/effects_of_exclusion.asp (1999) and http://oig.hhs.gov/exclusions/files/sab-05092013.pdf (2013), last accessed 12/03/15.

HHS-OIG Issues New Guidance on the Effects of Exclusion from Participation in Federal Health Benefits Programs.

Effects of Exclusion (May 21, 2013) On May 8, 2013, the Office of Inspector General of HHS (OIG) issued a Special Advisory Bulletin on the effects of exclusion from participation in Federal health care programs.  As background, among other things, the statute prohibits payment for services under a Federal health care program that are provided by excluded individuals.  Additionally, the statute also provides for the imposition of CMPs against providers that employ or enter into contracts with excluded persons to provide items or services payable by Federal health care programs.

The statute has been interpreted broadly to cover direct and indirect payments.  Thus, it has been considered a violation of the prohibition for an excluded person to deliver services even where the payment is not made directly for the payment for the services that the excluded person provides, e.g. where a hospital employs an excluded nurse to provide inpatient hospital services that are reimbursed under Medicare inpatient PPS.  For this, and many other, reasons knowledgeable attorneys have advised clients to check whether their employees and contractors are listed as excluded on the OIG’s List of Excluded Individuals and Entities (LEIE) at http://oig.hhs.gov/exclusions, both at time of employment or contracting, and also periodically.  This would include, for example, checking employees who service a facility on a temporary basis.  Knowledgeable counsel have also recommended including a requirement in its  contract with an entity with which a provider contracts that the contractor performs the screening of its employees periodically, and the provider should periodically monitor the performance of this function by that entity.  Finally, knowledgeable counsel have included a review of a target’s compliance with this requirement as part of its due diligence in an acquisition.[1]

The Special Advisory Bulletin answers a number of questions in greater specificity than previously.  For example, many providers questioned how frequently they must screen their employees and contractors after hiring or retention.  Although the Bulletin states that there is no frequency required by statute or regulation, it indicates that the LEIE is now updated monthly.  The OIG thus recommends that providers screen their employees and contractors against the LEIE at hiring or contracting (or at time of use in the case of workers retained through a temporary agency), and on a monthly basis.

The Bulletin also suggests that the LEIE be the primary source of information about HHS-OIG exclusions because, although the GSA’s SAM list lists HHS-OIG exclusions as well as debarment actions taken by other agencies, it does not contain the same level of detail as the LEIE.  Additionally, the Bulletin recommends that where a provider relies on a contractor to screen its employees and includes a provision to this effect in the contract, that it validate that the contractor is conducting screening by such mechanisms as requesting and maintaining screening documentation by the contractor.  Moreover, the Bulletin makes clear that the prohibition covers services performed by volunteers.

Michael CookLiles Parker attorneys are experienced in issues such as the prohibition on billing Federal health programs for services provided by excluded individuals, protecting providers from violating that provision as part of their compliance programs and in due diligence in acquisitions, and in addressing violations that they discover.  Any person having questions in the area should contact Michael Cook for a free consultation at (202) 298-8750

 


[1] Often this has also included checking a target’s compliance with screening of employees and contractors not only on the LEIE, but also on the GSA’s excluded person’s list (GSA EPLS which was recently merged into another list referred to as the SAM, https://www.sam.gov).

Recovery Audit Contractor Changes will be Major in 2014.

(May 7, 2013):  The Recovery Audit Contractor (RAC) program is slated to undergo significant changes in 2014.  As discussed below, non-hospital health care providers and suppliers are likely to find the Medicare appeals process more complex than ever as RACs enter into the process in an effort to defend their denial decisions.

I.  Background of the RAC Program:

The RAC program was first established as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). The program’s stated purpose was to detect and correct improper payments made by the Medicare program to health care providers and suppliers.  RACs were initially restricted to performing only post-payment audits of paid Medicare claims.  Importantly, the post-payment audits conducted by RACs were not intended to replace ongoing post-payment review efforts already underway by Medicare Administrative Contractors (MACs), Zone Program Integrity Contractors (ZPICs), Benefit Integrity Support Centers (BISCs) or the Department of Health and Human Services, Office of Inspector General (HHS-OIG).

II.  The RAC Demonstration Project:

The RAC demonstration project was initially limited to three states, California, Florida, and New York.  The demonstration project was subsequently expanded to also include Massachusetts, South Carolina and Arizona. Congress later extended the scope of the RAC program, making it a permanent, nationwide initiative under Section 302 of the Tax Relief and Health Care Act of 2006. While a number of physicians, home health agencies and durable medical equipment (DME) companies have, in fact, been subjected to audit by a RAC, the primary focus of RACs around the country has remained hospitals and other large institutional Medicare providers.

III.  Expansion of RAC Duties:

With the passage of the Affordable Care Act (ACA) in 2010, the program was further expanded to cover Medicaid claims processed by State programs around the country. Most recently, the Centers for Medicare and Medicaid Services (CMS) has authorized RACs to conduct “prepayment reviews” of “certain types of claims that historically result in high rates of improper payments.”  Prepayment reviews by RACs are currently focused on seven states where high populations of fraud and error-prone providers have been identified.  These seven states include:

1. Florida

2. California

3. Michigan

4. Texas

5. New York

6. Louisiana

7. Illinois

Additionally, CMS has authorized RACs to conduct prepayment reviews of short inpatient stays in four additional states.  These states include:

8. Pennsylvania

9. Ohio

10. North Carolina

11. Missouri

One purpose of this change is to move away from a “pay and chase” system of review where potential overpayments have already been paid by the government.  Instead, RACs will now be conducted prepayment audits, like their ZPIC and MAC counterparts – thereby preventing possible overpayments from being paid in the first place.

 IV.  Upcoming Changes to the RAC Program:

 Over the next year, health care providers and suppliers are likely to find that RACs are both more active and more likely to remain actively involved in overpayment cases appealed by Medicare providers and suppliers.  Several upcoming changes include:

RAC prepayment audits will likely be expanded to beyond the 11 states now authorized.

RAC contracts with CMS currently run through February 2014. The new RAC contract period will be extended to cover the period 2014 to 2018. 

There are currently four RACs operating around the country.  CMS is planning on expanding program to include a fifth contractor.  The existing four contractors will continue cover their designated regions while the new fifth contractor will assume responsibility for identifying overpayments by home health agencies, hospices and DME suppliers. 

If a health care provider or supplier challenges an alleged overpayment (identified by a RAC) through the administrative appeals process, CMS will now be requiring that RACs actively defend their assessments in the appeals process.

As the 2013 Statement of Work (SOW) for RACs provides:

“For any Recovery Auditor-identified improper payment that is appealed by the provider, the Recovery Auditor shall provide support to CMS throughout the administrative appeals process and, where applicable, (during) a subsequent appeal to the appropriate federal court. This includes participating or taking party status at the administrative law judge (ALJ) level of appeal in a minimum of 25 percent of the cases that reach this level.”

V.  Conclusion:

The upcoming changes to the RAC program outlined above are likely to dramatically impact the administrative appeals process.  As it currently stands, ZPICs are typically the only CMS to attend ALJ hearing as a “participant.”  Although ALJ hearings are intended to be non-adversarial proceedings, the participation of ZPIC personnel in the hearing process has sometimes transformed a hearing into a hotly-contested event.  The participation of RAC personnel in ALJ hearings are similarly likely to complicate the proceedings.  In light of these changes to the appeals process, we strongly recommend that health care providers and suppliers engage qualified, experienced legal counsel to represent their interests in the administrative appeals process.

Robert W. Liles is a health care attorney experienced in handling prepayment reviews and audits.Robert W. Liles and other Liles Parker attorneys have extensive experience representing health care providers and suppliers around the country in the Medicare administrative appeals process.  Should you have any questions regarding this process, please call Robert for a free consultation.  He can be reached at 1 (800) 475-1906.  

OIG Scrutinizes Medicaid Personal Care Services and Issues Report Outlining Vulnerabilities.

OIG Report on Medicaid Personal Care Services(November 21, 2012): On November 15th, the Department of Health and Human Services, Office of Inspector General (OIG) issued a report on Medicaid personal care services entitled “Personal Care Services, Trends, Vulnerabilities, and Recommendations for Improvement – a Portfolio”, Report No. OIG-12-12-01 (Report).  The Report purports to synthesize a number of prior reports and makes recommendations to improve program vulnerabilities that OIG has detected in its prior audits, evaluations and inspections of personal care services (PCS). The OIG indicates that it has previously found significant and persistence compliance, payment and fraud vulnerabilities.  It also emphasizes the seriousness of its concerns by noting that Medicaid costs for PCS’s increased 35% from 2005 to 2011.  Specifically, OIG notes that it has produced 23 audit and evaluation reports from 2006 through 2012 focusing on PCS’s.

I.  Overview of Problems Identified in the OIG’s Report on Medicaid Personal Care Services Fraud:

The OIG Report has identified the following concerns and program deficiencies:

  1. Improper payments linked to a lack of compliance with various requirements including State requirements, lack of documentation to demonstrate that services had been provided, services having been provided while beneficiaries were in institutional stays that, themselves, were reimbursed by Medicare or Medicaid, or services that were provided by staff who did not meet State qualification requirements;
  2. Inadequate controls to ensure appropriate payment and quality including inadequate controls over the prior authorization processes, lack of prepayment controls and edits, inconsistent standards and monitoring of PCS attendants, and inadequate billing practices to substantiate the delivery of services; and
  3. Increasing concern over fraud in the delivery of PCS including conspiracies between beneficiaries and PCS attendants to submit claims for services not provided or not covered, with a special concern over self-directed services.

Although not mentioned in the report, there have been recent reports of convictions for other types of fraud involving kickback arrangements.  In this regard, OIG noted that as of 2010, state Medicaid Fraud Control Units (MFCUs) had more open investigations of PCS fraud than any other type of services – more than 1,000 investigations nationwide.

The Report also makes a number of recommendations to CMS for revising requirements for PCS’s that include more standardized regulation of qualifications, expanding federal requirements and guidance, more sharing of data , and other modifications.  CMS agreed with one of the recommendations – better sharing of data suitable for identifying overpayments, while either rejecting or providing qualified acceptance of others.

II.  What Should Personal Care Services Providers Do?

The real takeaway for providers of these services is an understanding that these services are coming under increasing scrutiny and State and Federal oversight – especially from State Medicaid auditors, MFCUs, and US Attorneys’ offices.  As such, providers should familiarize themselves with the findings and recommendations of the Report, CMS’ responses, and recent reported cases of convictions or settlements.  It is critical that they develop or ensure that their own compliance programs, including internal and external audits and service monitoring processes incorporate those findings and protect against the conduct that has drawn scrutiny.

Michael CookLiles Parker attorneys have had considerable experience and success in representing PCS providers.  Our team has successfully worked to assist PCS providers in obtaining favorable decisions that exempted several PCS’ from being required to obtain CONs as a condition of retaining their licenses, Medicaid coverage issues, and eliminating entirely provider liability for a major audit disallowance.  Additionally, Liles Parker attorneys have significant experience in assisting providers in establishing and auditing effective compliance plans and programs. Anyone seeking further assistance in this area should contact Michael Cook at 202-298-8750.

The Senior Medicare Patrol is Here!

The Senior Medicare Patrol is Reporting Fraud, Waste and Abuse to OIG.

(January 20, 2012):  The Department of Health and Human Services (HHS) has long used reports and complaints from affected patients to further conduct Medicare audits of possible Medicare fraud, waste and abuse. Last June, it was reported that HHS was planning on implementing a “Mystery Shopper” program, with a Federal contractor posing as a potential patient when calling a physician to inquire about possible care. While HHS quickly abandoned this program, it is important to keep in mind that the Centers for Medicare & Medicaid Services (CMS) has actively promoted its “Senior Medicare Patrol” (SMP) program since 1997.

I.   Senior Medicare Patrol:

For over a decade, CMS and the Administration on Aging (AoA) have educated Medicare beneficiaries and their caregivers about how to examine Medicare Explanation of Benefits (EOBs) and other forms they may receive in connection with their care. As part of this effort, seniors have been asked to keep an eye out for possible indications of fraud or abuse, such as double-billing or billing for services not rendered. Recently, CMS announced an additional $9 million grant that will be used to bolster this Medicare audit program and teach more beneficiaries how to assist the government in stamping out fraudulent practices.

II.   States Involved in the Senior Medicare Patrol Program:

As expected, CMS has awarded a majority of grant monies to areas of the country that are hit hardest by Medicare fraud, including California, Texas, Florida, Louisiana, Illinois, Michigan and New York. However, every state is appropriated at least some funding to enhance this Medicare audit program. Moreover, if this program is effective at detecting and deterring fraudulent, wasteful or abusive billing, you can expect that it will be expanded (in terms of both funding and scope) in the future.

IV.   Impact on Your Practice:

To be clear, we all applaud these grass-roots efforts to identify fraud.  Educated seniors could eventually represent CMS’ most effective line of defense in identifying fraud early, before  significant harm can occur. Having said that, at this time, we are concerned that few Medicare beneficiaries are experienced or skilled in deciphering an EOB.  As a result, many reports of possible wrongdoing cited by beneficiaries may merely be a mistake or a misunderstanding of the coding and billing process. Therefore, if you bill in an area that is complex or otherwise confusing (especially to the untrained eye of a beneficiary), there is an increased likelihood that your practice will be audited or reviewed.

V.   Avoiding a Medicare Audit:

Hopefully, beneficiaries will continue to be trained on reading EOBs and CMS will continue its efforts to simplify the EOBs so that patients and their families can more easily understand what has been billed to Medicare. In the meantime, health care providers should diligently work to meet all applicable statutory and regulatory requirements. If you do not already have an effective Compliance Plan in place (as opposed to a non-personalized, non-provider specific plan based on a sample off of the internet), the first step would be for you to conduct a “GAP Analysis” of the services being billed.  The gap analysis would also assess the propriety of your organization’s business practices.  Through the use of a gap analysis, you will be able to identify any areas of concern and take remedial action. This approach can significantly reduce your level of risk.  While no practice is perfect, a GAP Analysis can greatly assist you in identifying problems – thereby increasing the likelihood that a Medicare contractor will find your claims payable if you are subsequently subject to a Medicare audit.

Liles Parker attorneys are skilled in assisting providers with compliance challenges. We can conduct “GAP Analyses,” design and implement effective Compliance Plans and provide compliance training to both your clinical and support staff. In addition, we regularly represent providers in appeals of Medicare postpayment audits of both Part A and Part B claims. Furthermore, our attorneys are often called upon to counsel providers on prepayment review issues, suspension actions and other possible enforcement sanctions. For a free consultation, please call us today at 1 (800) 475-1906.

HEAT Investigations of Health Care Fraud in South Texas

January 7, 2011 by  
Filed under HEAT Strike Force

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

I.  HEAT Investigations are Increasing:

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

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

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

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

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

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

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

Compliance Risk Areas in 2011 for Your Organization.

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

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

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

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

  • Filed charges against more than 800 defendants.

  • Obtained 583 criminal convictions.

  • Opened 886 new civil health care fraud matters.

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

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

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

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

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

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

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

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

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

Compliance Risk Number 3: Electronic Medical Records:

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

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

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

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

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

Compliance Risk Number 6:  HIPAA / HITECH Privacy Violations:

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

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

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

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

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

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

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

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

Compliance Risk Number 8:  Third-Party Payor Actions:

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

Compliance Risk Number 9:  Employee Screening:

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

Compliance Risk Number 10:  Payment Suspension Actions:

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

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

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

HEAT Strike Force Enforcement Takes an International Turn

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

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

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

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

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

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

Additional Cities will have HEAT Teams in 2011

August 27, 2010 by  
Filed under HEAT Strike Force

Additional Cities are Getting Medicare Fraud HEAT Teams(August 27, 2010): Additional cities will be getting Medicare fraud HEAT teams. Yesterday, Attorney General Eric Holder and U. S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius conducted the second of a planned series of “Regional Health Care Fraud Prevention Summits.” In addition to these agency heads, participants learned of current and additional planned initiatives from a number of Federal and State law enforcement officials. The first summit was recently conducted in Miami, Florida.  This summit was held in Los Angeles, California. Describing the progress made in the last fiscal year, Attorney General Holder noted that:

 “In just the last fiscal year, we’ve won or negotiated more than $1.6 billion in judgments and settlements, returned more than $2.5 billion to the Medicare Trust Fund, opened thousands of new criminal and civil health care fraud investigations, reached an all-time high in the number of health care fraud defendants charged, and stopped numerous large-scale fraud schemes in their tracks.”

Notably, Attorney General Holder also made it clear that the government’s joint Health Care Fraud Prevention and Enforcement Action Team (HEAT) program is slated for further expansion over the next year.  As he noted:

HEAT’s impact has been recognized by President Obama, whose FY 2011 budget request includes an additional $60 million to expand our network of Strike Forces to additional cities. With these new resources, and our continued commitment to collaboration, I have no doubt we’ll be able to extend HEAT’s record of achievement. And this record is extraordinary. (emphasis added).

These funds will be to supplement, not supplant, existing health care fraud enforcement efforts currently underway. While the additional cities slated for HEAT expansion were not announced at this event, all health care providers, regardless of location, should be especially vigilant in their efforts to ensure that Medicare coding and billing practices regulating the items and services they are providing must comply with applicable statutory and agency requirements.

Should you have questions regarding a health care fraud issue, you may call Robert W. Liles or another of our attorneys. Call 1 (800) 475-1906 for a free consultation.