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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 www.exclusionscreening.com.  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

Healthcare Data Mining Audits: Impact on Medicare Providers and Suppliers

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(June 27, 2012):  Healthcare data mining has become quite routine.  For instance, in a recent case involving a Missouri psychologist, the provider was indicted and arrested on two counts of healthcare fraud and forgery. At the heart of this case was the fact that the psychologist allegedly submitted claims to Medicare and Medicaid that were virtually impossible for a single individual to perform. In fact, the indictment stated that the physician worked every day except for Christmas from mid-2008 to early 2012, when he was arrested. In other words, he worked three and a half years straight, seven days a week, with only four Christmases away from the practice. Obviously, this data raised a few red flags for Medicare fraud fighters. As both interest and concern in the provision of national health care has risen, the current administration has aggressively pursued fraudsters who have improperly billed Medicare, Medicaid and private health plan payors. Not surprisingly, additional funding has accompanied these increased investigative and prosecutorial efforts.

As the government has increased its pressure on fraudulent providers, both law enforcement organizations such as the Department of Health and Human Services, Office of Inspector General (HHS-OIG) and contractors of the Centers for Medicare & Medicaid Services (CMS) have become increasingly adept at identifying and pursuing fraudulent and / or potentially fraudulent billing activities by abusive health care providers.

I.     How is the Government Using Healthcare Data Mining Audits?

Generally, the two primary targeting tools used by CMS contractors and law enforcement to identify wrongdoing are:  (1) Data Mining, and (2) Complaints.  This article focuses on the first targeting tool, the use of healthcare data mining. We will address “complaints” in detail in a later article.

At the outset, it is important to keep in mind that the government has been accumulating utilization, coding and billing data since the passage of the Medicare and Medicaid programs in 1965 as part of Title XVIII of the Social Security Act. Over the past 40 years, the government has carefully studied this data, identifying trends and noting irregularities. Both HHS-OIG and CMS contractors (including, but not limited to Zone Program Integrity Contractors (ZPICs), Recovery Audit Contractors (RACs), and Medicaid Integrity Contractors (MICs)) are able to effectively use data mining to analyze various aspects of the coding and billing data submitted by billing health care providers. These entities employ experts in database management and use  sophisticated techniques to “slice and dice” the Medicare and Medicaid billing and coding data.  In doing so, they are able to compare providers by practice area, geography, time, and a practically endless number of other factors. They can then effectively identify any “outliers” which may be present when their billing patterns are compared to those of their peers.

For instance, in the case described above, healthcare data mining has become quite common.  It was clearly used to review the psychologist’s claims history and determine that what he was billing was likely both impossible and fraudulent.  Nevertheless, it is important to always keep in mind that although data mining may strongly suggest that a provider is engaging in improper conduct, at the end of the day, an outlier is merely a provider whose billing patterns differ from those of his / her peers.  A review of the documentation must still be conducted to ascertain whether, in fact, fraudulent conduct has occurred.  While ZPICs and MICs handle the majority of the data mining work being conducted, when the data appears to suggest that fraudulent conduct is taking place, providers should expect HHS-OIG and possibly the Department of Justice or the Federal Bureau of Investigations to step into investigation.  Unfortunately, while data mining can detect aberrant patterns in billing data, it can’t explain them, and often times, this leaves well-intentioned providers facing scrutiny if their billing history appears aberrant for an otherwise innocent reason.  For instance, a specialist who is renowned in his area of practice may be referred serious, highly complex patients by his peers. This could result in his billing patterns appearing to be different from those of similarly-situated physicians.  Despite the fact that there is an innocent explanation for the specialist’s billing patterns, the data alone may appear to suggest that fraud is taking place.  Health care providers should take affirmative steps to determine whether their coding and billing patterns are “normal” or whether their practices are irregular when compared to other providers.

To be clear, just because your coding and billing practices differ from those of your peers does not necessarily mean that you are engaging in improper conduct.  Nevertheless, if you are an outlier, we strongly recommend that you carefully analyze your internal practices in an effort to identify why your utilization history differs from those of your peers.  Perhaps you are, in fact, improperly coding or billing for services rendered.  If so, you will need to determine the scope of any overpayment and work with your legal counsel to promptly reimburse the government.  As we have repeatedly advised our clients, “If it isn’t yours, give it back.” Upon review, if your coding and billing practices appear skewed, you need to be ready to explain why your utilization rate is different if audited by a CMS contractor or investigated by law enforcement.

II.    Helpful Tools When Conducted an Internal Assessment:

If you are a Compliance Officer, part of your responsibilities includes the identification and repayment of any improper billings. While you can’t completely eliminate the risk of an audit, there are several tools that can help your organization determine how your utilization rates compare to those of your peers.  Among these tools is one of our personal favorites – DecisionHealth’s “E/M Bell Curve Data Book,” which gives a visual overview of the Center for Medicare and Medicaid Services’ (CMS’) Evaluation and Management (E/M) data rates for 59 different specialties. For instance, a general practitioner can look at his established patient office visits (CPT© codes 99211 – 99215) and compare his utilization rates to the national average for the same CPT© codes. This data can be extremely useful in assessing an office’s billing practices and patterns and give confidence to a provider whose rates are similar to the national average.

Another effective tool, especially for non-E/M practices, such as home health agencies and hospices, is the “The Dartmouth Atlas of Health Care,” which provides a variety of data tools to evaluate Medicare spending by county. Not only does this interactive website have average-spending-per-Medicare-beneficiary maps, it also has a tool which allows providers to examine national and state benchmarks for a variety of statistics. These include Medicare reimbursements, hospice, skilled nursing facility, and home health agency utilization rates, surgical procedures and more. Applied correctly, this data can be instrumental in a practice’s self-evaluation and gives providers significant insight into their own billing patterns.

III.     How Should You Respond to Healthcare Data Mining Audits?

Staying fully compliant with all of Medicare’s and / or Medicaid’s rules and regulations can be a quite a challenge.  Nevertheless, as a participating provider, you have affirmatively agreed to meet that obligation.  As providers are constantly reminded, serving as a participating provider is a privilege, not a right.  Unfortunately, even with the best tools, physicians, group practices, clinics, home health agencies and other providers may still find themselves subject to Medicare post-payment and / or prepayment audits by a ZPIC (and now by a RAC). Reviewers and auditors employed by Medicare contractors are highly experienced, knowledgeable and skilled in assessing the propriety of a claim.  They have years of experience handling audits and are quite good at identifying deficiencies in your documentation, regardless of how minor you may believe those  deficiencies might be.  While it is essential to understand your obligations as a Medicare participant, it is equally important to understand how and why practices get audited.  As discussed in earlier articles, while you may not be able to avoid an audit, you can do your very best to help ensure that upon review, a CMS contractor will find that your practices fully meet Medicare rules and regulations.  The development, implementation and adherence to an effective Compliance Plan is the single best step you can take to avoid regulatory problems.

Healthcare LawyerRobert Liles is the managing member of Liles Parker PLLC. Robert represents providers in Medicare providers around the country in postpayment audits and appeals, and similar appeals under Medicaid. In addition, Robert counsels clients on regulatory compliance issues, performs gap analyses and internal reviews, and trains healthcare professionals on various legal issues. For a free consultation, call Robert today at: 1 (800) 475-1906.

100 Involved in Health Care Fraud Arrests

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Update (May 3): In total, 107 individuals were charged yesterday in connection with a health care fraud scheme comprising $452 million in false billing. 91 of the accused have been arrested and are in custody.

Health Care Fraud Arrests

(May 2, 2012): News outlets are reporting that approximately 100 people have been arrested and charged with one or more health care fraud schemes involving false billings to Medicare, Medicaid, and other federal health care programs. These health care fraud schemes allegedly resulted in approximately $450 million in fraudulent billings, one of, if not the largest, such busts in the history of federal health care programs. The report goes on to state that arrests were made in seven major metropolitan areas as a  result of an investigation over several months into these issues. CBS is reporting that over 50 of the individuals arrested were in Miami, Florida. Other arrests were made in Los Angeles, Houston, Detroit, Chicago, Tampa Bay, and Baton Rouge. In Baton Rouge, authorities are saying that these arrests were not just the result of several months of investigation, but a capped a six year long process to uncover fraudulent activities. Many of those arrested were allegedly involved in schemes related to the provision of mental health services or home health services.

I. Law Abiding Providers Should Take Note:

Health care providers in the cities where these health care fraud busts occurred should be wary. While HHS-OIG and DOJ have allegedly rooted out criminals from the Medicare program, these events cast a bad light on all providers in these regions. It has been our observation that after a large health care fraud bust such as this, the Zone Program Integrity Contractor (ZPIC) or Recovery Audit Contractor (RAC) for each region enhances their auditing efforts of similar providers. The ZPICs in these regions include SafeGuard Services (Los Angeles, Miami and Tampa), AdvanceMed Corporation (Baton Rouge) and Health Integrity (Houston). All of the ZPICs are capable, aggressive, and will critically audit a provider’s claims for both technical deficiencies and lack of medical necessity issues.

II.  It is Essential That You Develop and Implement an Effective Compliance Program:

Despite the federal government taking health care fraud wrongdoers off of the streets, ZPICs and RACs will likely step up enforcement efforts for other providers. It is therefore imperative that you establish and follow an effective compliance plan in your practice or facility as soon as possible. You should conduct a gap analysis to review your documentation practices, business operations, and relationships with referral sources, suppliers, and other providers. These issues are too important at this point to ignore. Moreover, if you have received a letter from a ZPIC or RAC, it is not something to fool around with or ignore. These entities will often review a sample of claims, deny many or all of those claims, and then extrapolate those findings onto a one or two year universe. This results in alleged overpayments to providers, sometimes in the millions of dollars. If you have received one of these letters, call us today to learn more about the process and your rights and responsibilities.

Liles Parker is a full-service law firm with offices in Washington, DC, Baton Rouge, Houston, and San Antonio. We provide nationwide representation of health care providers in a variety of administrative and other matters, including administrative appeals of ZPIC, RAC, MAC, MIC and Medicaid RAC overpayment determinations. In addition, we provide compliance plan drafting and implementation, compliance training for office staff, and mock audits. For more information, call us today at 1 (800) 475-1906 for a free consultation.

The Senior Medicare Patrol is Here!

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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

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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.

DOJ is Using Medicare Billing Data to Target Health Care Providers

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DOJ and HHS are Using Medicare Billing Data to Target Providers(August 31, 2010):  Last week, department heads of the U.S. Department of Justice (DOJ) and the Department of Health and Human Services (HHS), met in Los Angeles, CA and conducted the second of a planned series of “Regional Health Care Fraud Prevention Summits.”  Following-up on a similar conference held in Miami, DOJ Attorney General Eric Holder and HHS Secretary Kathleen Sebelius discussed a number of ongoing concerns and remedial steps (such as data mining) that are being taken to identify, investigate and prosecute instances of Medicare fraud.  In addition to these agency heads, participants learned of current and additional planned fraud enforcement initiatives from Federal and State law enforcement officials. A recurring theme duting the summits has been the fact that Medicare Billing Data is being used as an essential targeting tool by program integrity contractors and civil / criminal prosecutors.  As outlinrd below, it is essential that Medicare providers performing Evaluation and Management services take the time to review their billing practices.  If your utilization ratios are significant different from those of your peers, you need to determine why that is the case.  Ultimately, regardless of whether you appear to be an outlier, you need to regularly review your documentation, medical necessity, coverage, coding and billing practices and ensure that your services qualify for coverage and payment.

I.  Medicare Billing Data Issues Discussed at the Summit: 

As Attorney General Holder discussed, the administration’s current enforcement actions were having a significant impact on health care fraud.  In fact, additional funding has been allocated to expand the HEAT program to additional cities:

 “. . . Last year brought a historic step forward in this fight.   In May 2009, the Departments of Justice and Health and Human Services launched the Health Care Fraud Prevention and Enforcement Action Team, or “HEAT.”   Through HEAT, we’ve fostered unprecedented collaboration between our agencies and our law enforcement partners.   We’ve ensured that the fight against criminal and civil health care fraud is a Cabinet-level priority.   And we’ve strengthened our capacity to fight health care fraud through the enhanced use of our joint Medicare Strike Forces.    

 This approach is working.   In fact, 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.

 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.  

 We can all be encouraged, in particular, by what’s been accomplished in L.A.   Criminals we’ve brought to justice here – in the last year alone – include the owners of the City of Angels Hospital, who   pleaded guilty to paying illegal kickbacks to homeless shelters as part of a scheme to defraud Medicare and Medi-Cal; a physician in Torrance who defrauded insurance companies by misrepresenting cosmetic procedures as “medically necessary”; an Orange County oncologist who pleaded guilty to fraudulently billing Medicare and other health insurance companies up to $1 million for cancer medications that weren’t provided; a Santa Ana doctor who pleaded guilty to health care fraud for giving AIDS and HIV patients diluted medications; and a ring of criminals who defrauded Medi-Cal out of more than $4.5 million by using unlicensed individuals to provide in-home care to scores of disabled patients, many of them children.“ (emphasis added).

 As HHS Secretary Sebelius further noted:

“In March, we gave him some help when Congress passed and the president signed the Affordable Care Act — one of the strongest health care anti-fraud bills in American history. Under the new law we’ve begun to strengthen the screenings for health care providers who want to participate in Medicaid or Medicare.  And I am proud to announce that CMS is issuing a final rule strengthening enrollment standards for suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).

This rule and others coming soon mean that only appropriately qualified suppliers will be enrolled in the program. The days when you could just hang a shingle over a desk and start submitting claims are over. No more power-driven wheelchairs for marathon runners.  Under the new law, we’re also making it easier for law enforcement officials to see health care claims data from around the country in one place, combining all Medicare-paid claims into a single, searchable database. And we’re getting smarter about analyzing those claims in real time to flag potential scams.  It is what credit card companies have been doing for decades:  If 10 flat screen TV’s are suddenly charged to my card in one day, they know something’s not quite right. So they put a hold on payment and call me right away. 

We should be able to take the same approach when one provider submits ten times as many claims for oxygen equipment as a similar operation just down the road.  It’s about spotting fraud early before it escalates and the cost grows.  As we step up our efforts to stamp out fraud, we’re holding ourselves accountable. The President has made a commitment to cut improper Medicare payments in half by 2012.”(emphasis added).

II.  DOJ’s Use of Medicare Billing Data to Target Providers:

While DOJ Attorney General Holder’s and HHS Secretary Sebelius’ presentations provided an overview of law enforcement’s current and future efforts, the comments of DOJ Assistant Attorney General for the Criminal Division, Lanny A. Breuer, were especially enlightening in terms of how providers are being identified and targeted for investigation.   As Mr. Breuer discussed: 

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

 As Mr. Breuer’s comments further confirm, health care providers are being identified based on their billing patterns.  Through the use of data-mining, providers who coding and billing practices identify them as outliers, are finding themselves subjected to  administrative, civil and even criminal investigation.

III.  Problems with Using Data Mining for Targeting:

As counsel for a wide variety of health care providers around the country, we are especially concerned that honest, hard-working health care providers are finding themselves and their practices / clinics under investigation merely because:  (1) their productivity is higher than that of their peers, or (2) their focus is specialized and often treats a higher percentage of seriously sick patients which ultimately requires a more detailed or comprehensive examination than one might normally find.  Ultimately, through our representation of health care providers who have been targeted through data-mining, we believe that it is fundamentally unfair to investigate a provider merely on the basis of statistical data which can be manipulated in a thousand different ways in order to justify going after a specific provider or a type of practice.

 On the administrative side, when data-mining is used as a targeting tool, providers are being audited and pursued by ZPICs, PSCs and RACs – each of is incentivized (either because they receive a percentage of any overpayment OR they are under contract with CMS to find overpayments and wrongful billings) to find fault with the provider.

IV. Continuing Concerns:  

Under the current system, providers targeted through data-mining are likely to be saddled with extrapolated damages which can easily run into the millions of dollars, regardless of the fact that a large percentage of these providers are eventually exonerated (either fully or partially) when the case is heard by an Administrative Law Judge.

Health care providers subjected to an administrative audit (by a ZPIC, PSC or RAC), civil investigation (such as a review by the DOJ for possible False Claims Act liability), or criminal investigation (by DOJ or a State Medicaid Fraud Control Unit) should immediately contact your counsel.  Extreme care should be taken when making statements to Federal or State investigators.  Should the provider make a statement that is false or misleading, such comments could be used as the basis for bringing a separate cause of action.  Your legal counsel may choose to handle all contacts with the government.

Robert W. Liles HealthCare AttorneyRobert W. Liles, J.D., M.B.A., M.S., represents health care providers and suppliers around the country in connection with Medicare, Medicaid and private payor audits.  Robert serves as Managing Partner at the health law firm, Liles Parker, Attorneys & Counselors at Law.  Should you have questions regarding these issues, give Robert a call.  You may call 1 (800) 475-1906 for a free consultation.

Will Another Bounty Hunter Be Conducting Medicare Audits?

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Bounty Hunter

(March 25, 2010): Yesterday, the White House announced that President Obama intends to back additional bipartisan plans to stamp out waste in government-run medical programs for the elderly and needy.  The White House said this new effort, which is being called nothing more than another bounty hunter program by its critics, is intended to root out improper payments in the Medicare and Medicaid programs could double taxpayer savings over the next three years to at least $2 billion.

“We cannot afford nor should we tolerate this waste of taxpayer dollars,” the White House said. The government believes that approximately $54 billion was lost through improper Medicare and Medicaid payments in 2009. Medicare is the government-run program covering elderly Americans and Medicaid is for the country’s poorest.  President Obama is seeking to crack down on waste and fraud as his administration strives to secure an overhaul of the $2.5 trillion healthcare system to contain costs and expand coverage to tens of millions of more Americans.  The action endorses Republican-backed proposals on alleged health care wrongdoers.

I.  How Does the New Bounty Hunter Proposal Work?

Similar to the current RAC reimbursement scheme, the proposed new bounty hunter type plan will offer private Medicare audit companies a share of the money that they recoup in order to encourage them to work harder to uncover improper payments under Medicare and Medicaid.   President Obama is also expected to back bipartisan legislation to expand the ability of government agencies to undertake these so-called payment recapture audits by providing more funds.  No additional information on how this will impact CMS was given.

II.  What Steps Can Providers Take When Faced with Medicare Audits?

As many health care providers will readily attest, over the past year, it appears that there has been a marked increase in PSC and ZPIC Medicare audits, almost all of which are accompanied by demands for extrapolated damages.  Once again, this points to the importance of self-assessment and an effective compliance strategy.

This new Medicare audit risk will increase the likelihood that providers who have not been subjected to RAC or other Medicare audits in the past may now find themselves being examined by RAC-like auditors in the future.  Coupled with existing PSC and ZPIC Medicare audits, sole practitioners, small practice groups and clinics will find their coding and billing practices under the spotlight.  Unfortunately, based on recent cases we have handled, it appears that ZPICs are increasingly imposing their own views regarding what is required, well beyond the four corners of CMS-authorized provisions set out under LCDs and LMRPs covering the services at issue.  Fortunately, when faced with the facts, ALJs have applied a reasonable approach and most of the claims at issue have been found to be payable.  We recommend that health care providers carefully review their documentation practices to lessen the likelihood that a Medicare bounty hunter contractor and these new third-party reviewers can successfully argue that the claims don’t qualify for coverage during a Medicare audit.

Health Care AttorneyLiles Parker Health Care attorneys have extensive experience representing providers in the appeal of post-payment Medicare audits by ZPICs and other Medicare contractors.  Should you have any questions regarding these issues, don’t hesitate to contact us.  For a complimentary consultation, you may call Robert W. Liles or one of our other attorneys at 1 (800) 475-1906.