Medicare fraud/abuse: Focus shifts to providers


Not-so-obvious coding errors and self-referral practices are a growing target for the government and contractors, health care attorneys say.

National Report-In the eyes of Medicare, there’s obvious health care fraud and abuse-cases where physicians claim they provided services that never happen or purposely up-code, reaping millions in government reimbursement. But that is only part of health care fraud and abuse. Not-so-obvious coding errors and self-referral practices are a growing target for the government and contractors, health care attorneys say.

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Ms. Laemmle-Weidenfeld“There has been an increase in at least the last 10 years in health care fraud enforcement, and I don’t see that reversing anytime soon. What we’re seeing a lot of right now is not just a focus on the really big hitters, like the pharma companies, device companies, and hospital systems. We’re seeing more focus on physician practice groups. We’re seeing a lot more focus on individual accountability, versus just corporate accountability,” said Laura F. Laemmle-Weidenfeld, Esq, partner at the Jones Day law firm in Washington.

In fact, recent legislation is helping to fuel the focus on fraud and abuse. H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015, which most notably repealed the dreaded sustainable growth rate formula, became law on April 16, 2015. In addition, the House version of the bill carries language aimed at ramping up Medicare’s ability to fight fraud. According to section 7 of the bill, for example, the Secretary of Health and Human Services will develop a plan to revise the incentive program that encourages increased participation by individuals to report Medicare fraud and abuse. Among the recommendations in the new plan will be ways to enhance rewards for those reporting fraud and abuse, as well as extending incentives to Medicaid.

A public awareness and education campaign will include recommendations for the use of the Senior Medicare Patrols, which are part of the Older Americans Act of 1965, to further encourage participation in the revised incentive program.

NEXT: "Serious legal and financial repercussions"

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Mr. ThomasUrologists and other physicians often think what they’re doing is perfectly legitimate when the law suggests otherwise, said J.D. Thomas, Esq, a partner at the Waller Lansden law firm in Nashville, TN, and former assistant U.S. attorney.

“[That’s] where aggressive treatment of a patient becomes abusive treatment of that patient, from a paying standpoint,” Thomas said. “The Department of Justice and the U.S. Department of Health and Human Services are increasingly looking at that.”

‘Serious legal and financial repercussions’

Because they are not generally attorneys, physicians spend a lot of money and energy seeking legal opinions about what’s legitimate or unlawful, according to Jeffrey Kaufman, MD, a urologist in Orange County, CA, and president of the AUA’s Western Section.

“Nobody wants to be accused of fraud and abuse. There are serious legal and financial repercussions. You can be excluded from the Medicare and Medicaid program. You can lose your medical license,” Dr. Kaufman said.

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The financial consequences for crossing into fraud and abuse are substantial. For example, the False Claims Act, the government’s primary tool to go after health care fraud and abuse, allows the U.S. to seek three times the damages in addition to penalties of between $5,500 and $11,000 for each false claim submitted, according to Thomas.

It’s not only the government that’s watching, but also individuals and other physicians who see fraud occurring in their communities. The False Claims Act has a unique qui tam provision that allows a private citizen, called a relator, to file a lawsuit in the name of the United States.

“If the lawsuit is successful, the individual can take between 15% and 30% of the amount awarded, as well as their attorneys’ fees and costs for filing the lawsuit. There’s essentially a bounty provision to incentivize people who alert the U.S. about fraud,” Thomas said.

NEXT: Three problem areas for urologists


Three problem areas for urologists

There are three areas where urologists need to be particularly cautious about potential fraud and abuse practices, according to Laemmle-Weidenfeld, who is chair of the American Health Lawyers Association (AHLA) fraud and abuse practice group. Earlier in her career, she was a trial attorney in the Fraud Section of the Department of Justice’s Civil Division, where she conducted health care fraud investigations and litigation matters brought under the False Claims Act.

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Those areas are: financial relationships with hospitals, such as contracts to provide such services as lithotripsy or radiation; the provision of lithotripsy or other ancillary services in their practices but outside the hospital; and general billing and coding.

Financial relationships with hospitals/other entities. Urologists or urology groups often enter into financial relationships with hospitals and other entities to provide services. Physicians find themselves wondering if these relationships might implicate the Stark Law, which governs financial relationships between designated health service providers, as well as the Anti-kickback Statute.

“It’s ridiculously complicated for a layperson. So, generally, if a physician group is thinking about entering into a relationship like that… they need to get counsel,” Laemmle-Weidenfeld said. “Otherwise, the risks are really high.”

Under the Stark Law, if there is an improper referral, the entity that submitted the bill is on the hook to repay, according to Laemmle-Weidenfeld. And often Stark investigations spur kickback investigations.

“A lot of what we’re seeing is the Department of Justice going after a hospital and maybe not going after the physician, but then HHS OIG [Office of Inspector General] coming in behind and going after a physician in a potential kickback situation,” she said.

An example of a physician agreement that is not subject to the Stark Law would be a contract between a physician and an ambulatory surgery center, according to Thomas. That’s because ambulatory surgery centers are generally not subject to the prohibitions of the Stark Law since they typically do not provide any designated health services, as defined by the statute.

NEXT: Self-referral a murky area according to the law


Self-referral is a murky area according to the law, Dr. Kaufman said.

Dr. KaufmanFor example, a urologist might self-refer, maintaining it’s a medical necessity to do so, but regulators don’t see it that way. Dr. Kaufman, who reviews cases for the Medical Board of California, cannot talk about specific cases.

“I can say that within the general community, there are known to be individuals who are self-referring for stone treatment, radiation treatment, and imaging who are so over-utilizing resources that there is no question about an abuse situation and even a fraudulent situation,” Dr. Kaufman said. “Most doctors are doing a good job. Most doctors are altruistic and are providing the best care they can. They may be involved in self-referral because they can increase quality and cut costs; it’s more efficient.”

Providing ancillary services in places other than a hospital. Urologists providing in-office ancillary services need to make sure they’re billing correctly for those services, according to Laemmle-Weidenfeld. That’s especially important for large groups, which might have different locations for providing those services. If a practice is billing incorrectly but consistently for just one thing, that can become a big problem.

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Practices can avoid the situation by hiring a professional coder to do a practice-wide audit.

“Even for a small practice, just once or twice a year have somebody who is not involved (an outside coder) to take a look at 20 charts to make sure that they’re being coded correctly and billed correctly,” she said.

General billing and coding. Billing and coding risks are twofold, according to Laemmle-Weidenfeld. The first issue is correct billing and coding. The second is, if a practice bills incorrectly and is paid incorrectly as a result, or even if the practice billed correctly and Medicare or Medicaid paid too much, the responsibility to repay the overpayment falls on the practice.

Practices that receive Medicare or Medicaid money they’re not entitled to-whether an honest mistake or not-should have a process in place for repayment of those funds. The process of repayment should start as soon as the mistake is realized.

“There is that 60-day rule that once you identify an overpayment to Medicare and Medicaid, you must report it and pay it,” Laemmle-Weidenfeld said. “Failure to repay triggers false claims allegations.”

NEXT: "Up-coding can be a big problem"


Up-coding can be a big problem.

“If Medicare audits a provider and finds a handful of office visits that were billed at a Level 4 and should have been billed at a Level 3, that may be a difference of opinion with respect to how those office visits should have been billed. If Medicare audits a provider and finds out of 2,000 office visits in a 6-month period, 1,800 were billed at a Level 4 instead of a Level 3, then, that may be something more systemic and the government may think that fraud is occurring,” Thomas said.

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But some situations aren’t so clear cut. One case before the AUA’s attorney and awaiting a final statement from Medicare in Baltimore has to do with varying levels of drug reimbursement. Here’s the situation: If a physician who is losing 2% after being reimbursed from Medicare for radiopharmaceuticals receives the 2% to make up for the loss from the drug’s manufacturer, is it considered fraud if he bills Medicare based on the original invoice (not the invoice plus 2%)? After all, the doctor isn’t making money; he’s just not losing money.

This and other questions remain.

Unintended consequences

While experts agree that government efforts to recover waste from health care fraud and abuse aren’t going away anytime soon, many agree these laws, violations, and consequences have unintended consequences on the practice of medicine. Providers might be nervous about being innovative or interacting with one another, according to Thomas.

“When providers do [contract or innovate], they need very good legal counsel to assist them in doing it,” Thomas said.

That sentiment is felt even among those in government. Thomas attended a March Leadership Health Care delegation in Washington, where speakers ranging from senators to representatives from HHS tackled topics like fraud and abuse laws.

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“The speakers acknowledged that the fraud and abuse laws, as currently drafted and enforced, create unintended impediments to effective cooperation among providers in delivering quality care. Health care providers are spending increasing amounts of resources, particularly in legal costs, to comply with the ever-growing regulatory restrictions and requirements governing reimbursement. Certain members of Congress are actively seeking to reform fraud and abuse laws to allow providers to engage in various initiatives and explore responsible delivery options without the overarching fear of prosecution by regulatory authorities. Nonetheless, there was clear agreement that the ongoing push to investigate and prosecute fraud and abuse throughout the healthcare system is here to stay,” Thomas wrote in Waller Lansden’s Healthcare Blog.

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