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Medicare Fraud Enforcement Efforts Are Rising in Texas

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xray fraud gavel(October 27, 2015):  Over the past year, Medicare fraud enforcement efforts throughout Texas have resulted in multiple convictions.  These increased enforcement efforts should serve as a reminder to all Texas health care providers and suppliers that full compliance with applicable statutory and regulatory requirements is not an option — it is a necessity.

I. Medicare Fraud Enforcement Efforts are Accelerating in Texas:

In Houston earlier this year, one couple pled guilty to Medicare fraud and Medicaid fraud out of more than $9 million dollars. The owner was alleged to have violated the federal Anti-Kickback Statute by paying Medicare beneficiaries to visit the clinic and also billed for services that were supposedly never performed, despite the fact that they were billed to Medicare and Medicaid.  The owner’s wife, a registered nurse who ran the clinic, was convicted of misprision (knowing concealment) of a felony.  The couple also agreed to pay restitution to Medicare and Medicaid as part of their plea agreements.

A recent ambulance Medicare fraud case out of the Rio Grande Valley was prosecuted against the owner of the company alleging that documentation had been forged and that hundreds of thousands of dollars worth of false claims had been billed to the Medicare and Medicaid programs.  In addition to charging the defendant with charged with conspiracy to commit health care fraud, he was also charged with aggravated identity theft.

In another fairly recent example of fraud, a Gulf Coast physician practice entered into a settlement with the Department of Health and Human Services, Office of Inspector General (HHS-OIG) for allegedly submitting medical claims for services that were performed by unqualified technicians.

II. Exclusions are on the Rise:

The improper employment of “excluded” parties are another hot area of litigation you should consider. Last year, the general partner if a multi-facility set of skilled nursing homes was penalized for employing individuals who had been previously excluded from participation in federal health benefit care programs. The sad part is these violations were not only expensive, but also completely preventable. Providers should be acutely aware that government enforcement efforts are increasingly turning to Permissive Exclusion under the Social Security Act, where HHS-OIG has wide discretion to bar participants from federally funded programs from 1 to 5 years. Reinstatement cannot be requested until the exclusion term is completed. Each program must be reapplied for individually and could take another 6-12 months to receive the paperwork and complete, making the effective term 18-24 months. Further, every state, including Texas, has its’ own exclusionary statutes that must be complied with for purposes of re-enrollment in Medicare or Medicaid. State law cannot do less than federal law, but it could be even more restrictive, such as the Texas HIPAA law.

III. Checking the Exclusion Lists – Just Do It:

The simplest and most effective thing you can do to protect your healthcare practice or business is to check the exclusion lists religiously. Texas requires that exclusion lists to be checked on a monthly basis. Checking the exclusions list on a monthly basis may not be easy, but it is required. For larger entities it can also be costly and time consuming.  Nevertheless, it must be regarded as part of the essential cost of running your health care business.  Need exclusion screening assistance, check out one of the many vendors who provide these services.  Personally, I recommend you check out the services offered by “Exclusion Screening LLC” at  The company was started by Robert W. Liles and Paul Weidenfeld, two colleagues of mine. It simply has to be done, not only to be in compliance with federal and state law, but to prevent the risks and much more expensive penalties associated with the filing of false or tainted claims by these individuals. The result could not only lead to extremely large overpayments, but unnecessarily risk your exclusion from all federally funded programs, as well.

Pecore, RichardRichard Pecore, Esq., serves as an Associate at Liles Parker, Attorneys & Counselors at Law.  Liles Parker attorneys represent health care providers and suppliers around the country in connection with Medicare audits by RACs, ZPICs and other CMS-engaged specialty contractors.  The firm also represents health care providers and medical billers in regulatory compliance reviews, HIPAA Omnibus Rule risk assessments, privacy breach matters, and State Medical Board inquiries.  For a free consultation, call Robert at:  1 (800) 475-1906

Dentist Alleged to Have “Systematically Bilked” MassHealth Dental Fraud Scheme

December 19, 2013 by  
Filed under Dental Audits & Compliance

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MassHealth Dental Fraud(December 23, 2013):  A recent state audit of a Massachusetts dentist has reportedly uncovered numerous instances of MassHealth dental fraud, alleging that dentist fraudulently billed the state’s “MassHealth Insurance Program.”  According to the state’s auditor, the dentist “systematically bilked the MassHealth Dental Program.”  In all, the audit claims to have found over $150,000 in improper MassHealth dental fraud claims.


I.  MassHealth Dental Program – Overview of Coverage and Benefits:

The MassHealth Dental Program  provides dental benefits for MassHealth beneficiaries.  Younger members (those under the age of 21), receive a larger share of dental benefits than adults (those who are 21 or older).  The MassHealth Dental Program provides a broad scope of services to eligible state citizens.  While many states limit eligibility to children, the MassHealth Dental Program also provides dental benefits to eligible adults.  These dental services include diagnostic and preventive services (such as checkups, cleanings, and x-rays), extractions, emergency treatment, and composite fillings for the 12 front teeth. Coverage of all fillings for adults begins in 2014.

The MassHealth Dental Program does not cover a number of complex, often expensive, dental services sometimes needed by eligible adult beneficiaries.  Examples of non-covered services include crowns, root canals, dentures, and other restorative services that may be needed by eligible adults. In contrast, restorative services (such as fillings), braces, root canals and a variety of other dental service benefits are typically covered for eligible beneficiaries who are under age 21.  The MassHealth Dental Program is managed by Dental Services of Massachusetts and its subcontractor, DentaQuest LLC.

II. MassHealth Dental Fraud Audit Findings:

Massachusetts’ Office of the State Auditor has been tasked with conducting audits of the MassHealth Dental Program.  When earlier audits found that the existing claims processing system did not have adequate controls to identify and reject improper dental claims, MassHealth implemented a number of corrective measures to help prevent dental fraud from occurring.

A recent audit was conducted of the Medicaid dental services submitted for payment of one Massachusetts dentist. The audit included a partial review of MassHealth payment information and the files of MassHealth members seen by the Massachusetts dentist between 2008 and 2011.  The audit found repeat patterns of the dentist obtaining payment for dental procedures that were not allowed by MassHealth regulations.  Specifically, the audit found that:

1,429 unallowable detailed oral screenings, intended for patients receiving radiation therapy, chemotherapy or organ transplants. However, the dental patients for which the provider submitted claims were not undergoing any of these procedures;

865 claims for dental services including X-rays, fillings, and denture repairs that were not documented in beneficiary files;

259 oral evaluations in excess of MassHealth limits;

176 claims for “dental enhancement fees,” which are payments meant for more general health centers to improve their dental services;

13 cases of the dentist circumventing MassHealth limits on denture replacements by instead replacing every tooth in the denture individually;

98 tooth restorations in excess of state limits.

The audit also identified 95 claims for medically excessive fluoride treatments. For example, the dentist is alleged to have billed 53 fluoride treatments over 12-month period for a single child-aged member. However, guidelines set forth by the American Academy of Pediatric Dentistry holds that a dentist should provide no more than four fluoride treatments in a year.

The auditors ultimately concluded that the dentist engaged in MassHealth dental fraud.  Describing the identified conduct as “pervasive fraud,” the auditors calculated that approximately $154,019 in fraudulent billings had been improperly submitted for payment to the state.  During the four year audit period, it was estimated that MassHealth paid the dentist nearly $1 million for more than 10,000 claims of service.  As a result of this internal review, MassHealth has reportedly terminated the dentist’s status as a participating provider in the MassHealth Dental Program.

III.  Patient Complaints Lead to Dentist’s Suspension:

This recent audit isn’t the only problem facing this dentist. In a separate matter unrelated to the audit, the Massachusetts Board of Registration in Dentistry is reported to have suspended the dentist’s license to practice for a year.  The Board made this move after it received complaints from patients related to their dental treatments.

IV.  Final Remarks:

Now, more than ever, it is essential that dentists participating in any state Medicaid dental programs review both their operational and documentation practices to ensure that entities processing and examining their patient treatment records can readily ascertain why certain care and treatment decisions were made and that the services billed to the Medicaid program were not merely medically reasonable and necessary, but also that they qualify for coverage and payment.

What should you take away from this case?  Dentists participating in their state’s Medicaid program should review their practices and documentation with a critical eye.  It is important that Medicaid dentists recognize that they are behind the proverbial curve when it comes to compliance.  Unlike their physician counterparts, very few dentists have historically been targeted by law enforcement, regulatory auditors or private payor investigative units.  As a result, only a small percentage of dental practices have implemented a Compliance Plan.  Where compliance efforts have been initiated, they are often limited to preventative measures aimed at guarding against a HIPAA privacy breach and/or an OSHA violation.  Frankly, these measure aren’t nearly enough to keep a practice out of trouble.  The government’s previous lack of enforcement may provide dentists with a sense of cold comfort that is both misleading and undeserved.  Federal and state enforcement investigations of possible incidents of dental fraud have steadily increased in recent years.  Moreover, there is every indication that these efforts will continue to rise.

Are your Medicaid dental services fully compliant with all applicable state Medicaid requirements? Assuming that they are, it is still imperative that you keep in mind that an otherwise “perfect”  Medicaid dental services claim may still fall short if it is somehow “tainted” because of a violation of the federal or state Anti-Kickback Statute violation.  The claim is therefore non-payable.

While there is no sure-fire way to avoid being audited, there are concrete steps you can take in your dental practice today to reduce the risk that a federal or state audit of your Medicaid dental claims will find that you have been wrongfully overpaid for the Medicaid services you and your staff have been providing (and are continuing to provide).  Call us to discuss how we can assist you with your compliance efforts.

Healthcare LawyerRobert W. Liles, Esq., serves as Managing Partner at the health law firm of Liles Parker.  Attorneys at Liles Parker represent dentists, orthodontists and other health care providers around the country in connection with both regulatory and transactional legal projects.  For a free consultation, call Robert at: 1 (800) 475-1906.


HHS Publishes Proposed Rules on Medicaid RACs

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Medicaid RACs(November 30, 2010):  The United States Department of Health and Human Services (“HHS”) recently published a Proposed Rule applying the Recovery Audit Contract (RACs) process to claims under the Medicaid program.  As background, the RAC process has been a part of the Medicare program since 2005, first as a demonstration project from 2005 – 2008, and then extended to the entire nation effective no later than January 1, 2010.

I. Overview of the Medicare RAC Program:

 Under the Medicare RAC program, HHS retains private contractors for a post payment review process to identify over and under payments on a contingency fee basis.  There are two types of reviews – data mining, which involves simply reviewing data to identify improper payments, and complex reviews, which require reviews of medical records to determine the “legitimacy” of a payment.  To date, HHS has contracted with four RACs – one covering each of four national regions.  HHS pays the RAC a contingency fee based upon a percentage (currently ranging from 9 – 12.5 percent) of the amounts of overpayments that the Federal government recovers and underpayments that HHS repays providers based upon the RAC review.  Overpayment recoveries have far exceeded underpayments that the program has reimbursed providers.

The process was highly controversial during the demonstration, and HHS implemented a number of changes for the national roll out.  Among others, HHS:  shortened the look back period; set limits on the number of records that the RACs could request at any one time; precluded RACs from retaining their contingency fee payments where the provider prevailed at any stage of the appeals process; required RACs to receive approval from HHS, and publish, the types of claims that they were reviewing; and required RACs to retain physicians as medical directors.  Despite theses changes, the process still requires providers to expend substantial amounts of increased administrative expenditures to accommodate these reviews.

II.  Medicaid RAC Programs are Now Required by Law:

Although several States have conducted RAC type audits under their Medicaid programs, most have not.  However, as part of the health care reform legislation, Congress required all States to establish a Medicaid RAC program by December 31, 2010.[1] See §6411 of the Patient Protection and Affordable Care Act.

The proposed rules require that States submit a state plan amendment (“SPA”) by the December 31, 2010 deadline.  However, recognizing that responses to the proposed rule are not even due until January 10, 2010, the proposal also indicates that States are not required to implement the program until April 1, 2011.  The proposal also recognizes that some States may need to change their State laws to implement the RAC program, and thus states that HHS may grant exceptions in certain areas, albeit on a limited basis.

The proposed rules would grant substantial flexibility to states in how they establish their RAC programs.  However, the rules provide that the fees States pay Medicaid RACs for overpayments and underpayments combined may not exceed the amounts that the State collects from overpayments.  This means that both the States and RACS will be strongly incentivized for the RACs to find over, as opposed to under, payments.

III.  Medicaid RAC Appeals:

The rules require the State to establish an appeals process for providers to dispute overpayments identified by the RACS.  However, the preamble to the proposed rules would require states to return the Federal match for an overpayment that is identified even if the State does not recover that overpayment from the provider.  If this is construed to require the State to return the Federal share of overpayments that the RAC identifies even if the provider prevails on appeal, this would place a strong disincentive for the State to establish a vigorous and unbiased appeal process.  Similarly, it is unclear whether HHS would recover the Federal portion of identified overpayments even in those cases where the State otherwise would have settled a claim in this process.

Further, it is not clear whether HHS will attempt to recover the share of the entire identified overpayment, even if it is clear that the provider would have been entitled to a partial payment if the claim had been properly submitted, e.g. in States that pay hospital providers under a DRG system, hospital transfer cases, or cases where the RAC concludes that a hospital case that was billed as an inpatient admission should have been billed as observation.  Absent such authorization, the State would avoid payment for even the portion of treatment that its RAC concluded was legitimate and actually provided, albeit mistakenly claimed.

Under the proposed rules, it appears that States would have substantial flexibility in designing their programs.  Thus, it would behoove providers and their trade associations not only to submit comments on the proposed Federal rules (which are due on January 10, 2010), but also to become involved in the development of the State process.  Liles Parker attorneys have had success in the past in assisting providers in one State to change the process in an analogous circumstance, to, among other things:  shorten the period for which claims were reviewed; assist providers in convincing the State to implement a routine process to minimize the chance that record requests would be lost; limit the number of medical records that could be requested; limit reveries to the difference between amounts that were claimed and those that could have been claimed under the RAC’s analysis; the qualifications of RAC staff that review medical necessity claims; and establishing the specific criteria that would be used to review medical necessity issues.

Also, providers will want to discuss with their States a number of other issues such as the extent to which physician judgment will be relied upon in second guessing medical necessity and treatment decisions, the process that will be used to challenge Medicaid RAC determinations, and the extent to which the State will increase Medicaid payments for the added administrative expense involved in staffing up for these reviews.  This is especially critical under the Medicaid program, where State payments often are far below the cost of providing the service as a result of deficient appropriations.

Finally, providers will need to develop their internal processes for ensuring that requests for records are properly tracked and timely processed, and for appealing appropriate cases.

Healthcare AttorneyLiles Parker attorneys have extensive experience in all of these areas and are prepared to assist providers and their trade associations in commenting on the proposed Federal rules, assisting in negotiations with States on the development of their Medicaid RAC programs, and appealing overpayment determinations.  Providers wishing to discuss these issues should contact Michael Cook at (202) 298-8750.

[1] Congress also expanded the Medicare RAC program to parts C (Medicare Advantage) and D (Medicare Outpatient Prescription Drug program) of Medicare.  We will address these changes in a later issue.