Category Archives: False Claims Act
Auditing Medicare Advantage Organizations – About Time!
The American Hospital Association (“AHA”) is asking the Department of Justice (DOJ) to look into health insurance companies that routinely deny patients access to care and payments to providers. I’d like a task force as well. This is exactly the problem I have witnessed with managed care organizations or MCOs. In traditional Medicare and Medicaid, MCOs are prepaid and make profit by denying consumers medical care, terminating provider contracts, and not paying providers for care rendered. Congress created the same scenario with Medicare Advantage. Individuals can elect coverage through private insurance plans. While MA has been wildly successful and popular, the AHA is complaining that too many people are getting denied services.
An OIG report that was published in April cites MAOs as denying services for beneficiaries. We are always talking about providers getting audited, it is about time that the companies that are gateways for providers getting reimbursed and beneficiaries getting medically necessary services are likewise audited for denying services. It seems ironic that providers are audited for potentially billing for too many services and these gateway, third party reimbursement companies are audited for providing too few services – or denying too many prior authorizations. But if the MCO or MAO deny medical services, then the money that would have been paid to the provider stays in their pocket.
The OIG report found that many MAOs delay or deny services despite those services meeting Medicare prior authorization criteria, approximately 13-18%. Almost a 20% wrongful denial rate. When these MAOs get tax payer money for a Medicare beneficiary and deny services those tax dollars stay in the MAO’s pockets.
Supposedly MAOs approve the vast majority of requests for services and payment, they issue millions of denials each year, and OIG’s audit of MAOs has highlighted widespread and persistent problems related to inappropriate denials of services and payment. As enrollment in Medicare Advantage continues to grow, MAOs play an increasingly critical role in ensuring that Medicare beneficiaries have access to medically necessary covered services and that providers are reimbursed appropriately.
According to the OIG report, MAOs denied prior authorization and payment requests that met Medicare coverage rules by: (1) using MAO clinical criteria that are not contained in Medicare coverage rules; (2) requesting unnecessary documentation; and (3) making manual review errors and system errors.
Personally, I am fed up with these private, insurance companies denying services and keeping our tax dollars. It is about time the insurance companies are audited.
Medicare Investigations for False Claims Act Violations
Whenever you receive correspondence with letterhead from the Department of Justice, Attorney General’s office, you know it’s important and you better take note.
A Civil or Criminal Investigative Demand is serious. Getting any communication from the U.S. Department of Justice can be a bit unnerving. That’s particularly true for Medicare and Medicaid providers receiving a Civil Investigative Demand (“CID”) for documents and testimony.
A CID is a tool used by the Justice Department (“DOJ”) to investigate potential violations of the False Claims Act (“FCA”). See blog. The DOJ can issue a CID whenever the DOJ has “reason to believe that any person may be in possession, custody, or control of any documentary material or information relevant to a false claims law investigation.” The bottom line is that the DOJ uses CIDs to obtain documents and identify potential witnesses so they can bring FCA suits against the recipient or others.
What is the False Claims Act anyway?
It’s a broad statute that punishes many things, one of which is making false statements to the government in connection with a claim for payment from the government. The DOJ often uses CIDs to investigate medical providers who seek payment from Medicare and Medicaid.
Just because the Investigative Demand is labeled “civil” does not mean that the investigation is only civil; it could take a turn towards criminal. In other words, something sparked the DOJ’s attention, but, perhaps there were no allegations of criminal action, the investigation could start and the investigator could uncover something they consider criminal. An investigation earmarked as civil can turn criminal with the uncovering of one document.
On the other hand, the investigator could review all the documents and conclude that there is not even a civil violation. Very rarely, do the investigators contact you to tell you that the investigation is over and no violation was found. Most of the time, you are put on notice that you are being investigated, then hear nothing from the investigator in perpetuity.
Recently, I had an investigator inform me that the review of. my client was complete, and the file was being closed. But that’s the only time in 22 years that I was informed that nothing noncompliant was found. Usually, time just passes.
If you are found to have violated the FCA, the government can triple the amount of penalties, so the numbers get very high very quickly.
The Justice Department obtained more than $5.6 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year ending Sept. 30, 2021. This is the second largest annual total in False Claims Act history, and the largest since 2014. Settlement and judgments since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $70 billion.
A much lesser known provision of the FCA is the reverse one. Not to blow everyones’ minds, but there is also a “reverse false claims” provision of the False Claims Act. The reverse false claims provision permits the government or relators to pursue defendants who are alleged to have hidden or reduced an obligation to pay the government through false statements, or who have violated the 60-day payment rule’s obligation to return “identified overpayments.” These claims typically have been raised in the context of cost reporting, Medicare Part C, or related to alleged failures to fulfill obligations under the 60-day payment rule. The government and relators have increasingly relied on the reverse false claims provision to support stand-alone claims or have used it in conjunction with affirmative false claims. However, because the reverse false claims provision is very lightly used compared to affirmative false claims provisions, there is a dearth of case law defining it or exploring its parameters. The case law that does exist is primarily from district courts and, as the survey of case law contained herein illustrates, there is little guidance from the Circuit Courts or the U.S. Supreme Court.
Intent or deliberate disregard is required to prove the false claims act – reverse and regular.
Failure to respond to a CID completely could warrant criminal contempt. This is especially important to note, as civil investigate demand sounds much less important than a subpoena. But a CID is, in essence, a subpoena. Immediately, implement a “legal hold” upon receipt of the CID, and don’t forget to avoid producing privileged documents.
After the investigation is complete, if there are violations of the FCA uncovered, you will receive correspondence that states in “all-caps” and bold font:
Rule 408 FOR SETTLEMENT PURPOSES ONLY
FRE 408 prohibits the use of settlement negotiations as evidence. After reviewing the offer, get with your legal counsel to discuss next steps.
Audits Surge with Medicare Advantage and TPE Audits Increased!
Everyone knows about audits of health care providers. But what about the billing companies? Or a data-analytics company? In a complaint filed last week, a New York data-mining company DxID is accused of allegedly helping a Medicare Advantage program game federal billing regulations in a way that enabled the plan to overcharge for patient treatment. As you know, Medicare Advantage plans are paid more for sicker patients. Supposedly, DxID combed medical records for “missed” diagnoses. For example, adding major depression to an otherwise happy consumer. A few years ago, I won an injunction for a provider who 100% relied on the billing company to bill. Because this company aggressively upcoded, we used the victims’ rights statutes in the SSA to defend the provider. And it worked. Providers often forget about the safety net found in the victims’ rights statutes if they wholly rely on a billing company.
This DXID complaint cites medical conditions that it says either were exaggerated or weren’t supported by the medical records, such as billing for treating allegedly unsupported claims for renal failure, the most severe form of chronic kidney disease. The Justice Department is seeking treble damages in the False Claims Act suit, plus an unspecified civil penalty for each violation of the law.
Medicare Advantage has been the target of multiple government investigations, Justice Department and whistleblower lawsuits and Medicare audits. One 2020 report estimated improper payments to the plans topped $16 billion the previous year. In July, the Justice Department consolidated six such cases against Kaiser Permanente health plans. In August, California-based Sutter Health agreed to pay $90 million to settle a similar fraud case. Previous settlements have totaled more than $300 million.
Breaking news: Targeted Probe and Educate audits (TPE) resumed September 1, 2021. Due to COVID, TPE audits had been suspended. Unlike recovery audits, the stated goal of TPE audits is to help providers reduce claim denials and appeals with one-on-one education focused on the documentation and coding of the services they provide. TPE audits are conducted by MACs. While originally limited in scope to hospital inpatient admissions and home health claims, CMS expanded the program to allow MACs to perform TPE audits of all Medicare providers for all items and services billed to Medicare. Beware the TPE audits; they are not as friendly as they purport. A TPE audit can result in a 100 percent prepay review, extrapolation, referral to a Recovery Auditor, or other action, so a carefully crafted response to a TPE audit is critical.
The TPE audit process begins when a provider receives a “Notice of Review” letter from the MAC which states the reasons the provider has been selected for review and requests 20-40 records be produced. Once the records are produced, the MAC will review the 20-40 claims against the supporting medical records and send the provider a letter detailing the results of their review. If the claims are found to be compliant, the TPE audit ends and the provider cannot be selected for review again for a year unless the MAC detects significant changes in provider billing. However, if the claims are found not to be compliant, the MAC will invite the provider to a one-on-one education session specific to the provider’s documentation and coding practices. The provider is then given 45 days to make changes and a second round of 20-40 records will be requested with dates of service no earlier than 45 days after the one-on-one education.
The provider will be given three rounds of TPE to pass. Do not use all three rounds; get it right the first time. If the provider fails pass after three rounds, they will be referred to CMS for further action. With MA, TPE, and audits of data-analytics companies ramping up, 2022 is going to be an audit frenzy.
RAC Report: PET Scans, Helicopter Transportation, and Hospice, Oh My!
The RACs are on attack! The “COVID Pause Button” on RAC audits has been lifted. The COVID Pause Button has been lifted since August 2020. But never have I ever seen CMS spew out so many new RAC topics in one month of a new year. Happy 2021.
Recovery audit contractors (“RACs”) will soon be auditing positron emission tomography (PET) scans for initial treatment strategy in oncologic conditions for compliance with medical necessity and documentation requirements.
Positron emission tomography (“PET”) scans detect early signs of cancer, heart disease and brain disorders. An injectable radioactive tracer detects diseased cells. A combination PET-CT scan produces 3D images for a more accurate diagnosis.
According to CMS’ RAC audit topics, “(PET) for Initial Treatment Strategy in Oncologic Conditions: Medical Necessity and Documentation Requirements,” will be reviewed as of January 5, 2021. The PET scan audits will be for outpatient hospital and professional service reviews. CMS added additional 2021 audit targets to the approved list:
- Air Ambulance: Medical Necessity and Documentation Requirements,[1]. This complex review will be examining rotatory wing (helicopter) aircraft claims to determine if air ambulance transport was reasonable and medically necessary as well as whether or not documentation requirements have been met.
- Hospice Continuous Home Care: Medical Necessity and Documentation Requirements,[2] and
- Ambulance Transport Subject to SNF Consolidated Billing.[3]
Upcoming HHS secretary Xavier Becerra plans to get his new tenure underway quickly.
In False Claims Act (“FCA”) news, Medicare audits of P-Stim have ramped up across the country. A Spinal Clinic in Texas agreed to pay $330,898 to settle FCA allegations for allegedly billing Medicare improperly for electro-acupuncture device neurostimulators. CMS claims that “Medicare does not reimburse for acupuncture or for acupuncture devices such as P-Stim, nor does Medicare reimburse for P-Stim as a neurostimulator or as implantation of neurostimulator electrodes.”
Finally, is your staff getting medical records to consumers requesting their records quickly enough? Right to access to health records is yet another potential risk for all providers, especially hospitals due to their size. A hospital system agreed to pay $200,000 to settle potential violations of the HIPAA Privacy Rule’s right of access standard. This is HHS Office for Civil Rights’ 14th settlement under its Right of Access Initiative. The first person alleged that she requested medical records in December 2017 and did not receive them until May 2018. In the second complaint, the person asked for an electronic copy of his records in September 2019, and they were not sent until February 2020.
Beware of slow document production as slow document production can lead to penalties. And be on the lookout for the next RAC Report.
Remember, never accept the results of a Medicare or Medicaid audit. It is always too high. Believe me, after 21 years of my legal practice, I have yet to agree with the findings if a Tentative notice of Overpayment by any governmental contracted auditor, whether it is PCG, NGS, the MACs, MCOs, or Program Integrity – in any of our 50 States. That is quite a statement about the general, quality of work of auditors. Remember Teambuilders? How did $12 million become $896.35? See blog.
1 CMS, “0200-Air Ambulance: Medical Necessity and Documentation Requirements,” proposed RAC topic, January 5, 2021, http://go.cms.gov/35Jx1co.
2 CMS, “0201-Hospice Continuous Home Care: Medical Necessity and Documentation Requirements,” proposed RAC topic, January 5, 2021, http://go.cms.gov/3oRUyiY.
3 CMS, “0202- Ambulance Transport Subject to SNF Consolidated Billing,” proposed RAC topic, January 5, 2021, http://go.cms.gov/2LOMEbw.
New Revisions to the Justice Manual -The New World of Health Care Fraud and Abuse in 2019
So many memos, so little time. Federal prosecutors receive guidance on how to prosecute. Maybe “guidance” is too loose a term. There is a manual to follow, and memos are just guidance until the memos are incorporated into what is known as the Justice Manual. Memos are not as binding as the Justice Manual, but memos are persuasive. For the last 22 years, the Justice Manual has not been revised to reflect the many, many memos that have been drafted to direct prosecutors on how to proceed. Until recently…
Justice Manual Revised
The Justice Manual, which is the manual that instructs federal prosecutors how to proceed in cases of Medicare and Medicaid fraud, has been revised for the first time since 1997. The Justice Manual provides internal Department of Justice (DOJ) rules.
The DOJ has new policies for detecting Medicare and Medicaid fraud and abuse. Some of these policies are just addendums to old policies. Or formal acceptance to old memos. Remember the Yates Memo? The Yates Memo directed prosecutors to indict executives, individually, of fraudulent companies instead of just going after the company.
The Yates Memo has now been codified into the Justice Manual.
Then came the Granston Memo – In a January 10, 2018, memo (the “Granston Memo”), the DOJ directed its prosecutors to more seriously consider dismissing meritless False Claims Act (“FCA”) cases brought by whistleblowers. It lists 7 (non-exhaustive) criteria for determining whether the DOJ should dismiss a qui tam lawsuit. The reasoning behind the Granston Memo is that whistleblower lawsuits have risen over 600 cases per year, but the government’s involvement has not mirrored the raise. This may indicate that many of the whistleblower lawsuits are frivolous and filed for the purpose of financial gain, even if the money is not warranted. Remember qui tam relators (people who bring lawsuits against those who mishandle tax dollars, are rewarded monetarily for their efforts…and, usually, the reward is not a de minimus amount. In turn, people are incentivized to identify fraud and abuse against the government. At least, according to the Granston Memo, the financial incentive works too well and frivolous lawsuits are too prevalent.
The Granston Memo has also been codified into the Justice Manual.
Talk about an oxymoron…the Yates Memo instructs prosecutors to pursue claims against more people, especially those in the executive positions for acts of the company. The Granston Memo instructs prosecutors to more readily dismiss frivolous FCA allegations. “You’re a wigwam. You’re a teepee. Calm down, you’re just two tents (too tense).” – a horrible joke that my husband often quips. But this horrible quote is apropos to describe the mixed messages from DOJ regarding Medicare and Medicaid fraud and abuse.
The Brand Memo, yet another memo that we saw come out of CMS, instructs prosecutors not to use noncompliance as subject to future DOJ enforcement actions. In other words, agency guidance does not cannot create binding legal requirements. Going forward, the DOJ will not enforce recommendations found in agency guidance documents in civil actions. Relatedly, DOJ will not use noncompliance with agency guidance to “presumptively or conclusively” establish violations of applicable law or regulations in affirmative civil enforcement cases.
The Brand Memo was not incorporated into the Justice Manual. It also was not repudiated.
Medicare/caid Audit Targets Broadened
Going forward, traditional health care providers will not be the only targets – Medicare Advantage plan, EHR companies, and private equity owners – will all be audited and reviewed for fraud and abuse. Expect more audits with wider nets to catch non-provider targets to increase now that the Yates Memo was codified into the Justice Manual.
Anti-Kickback Statute, Stark Law, and HIPAA Narrowed
The Stark Law (42 U.S.C. 1395nn) and the Anti-Kickback Statute (42 U.S.C. §1320a‑7b(b)) exist to minimize unneeded or over-utilization of health-care services payable by the federal government. Stark Law and the Anti-Kickback regulations criminalize, impose civil monetary penalties, or impose other legal sanctions (such as termination from Medicare) against health care providers and other individuals who violate these laws. These laws are esoteric (which is one reason that I have a job) and require careful navigation by specialized legal counsel. Accidental missteps, even minute documentation errors, can lead to harsh and expensive results.
In a health care world in which collaboration among providers is being pushed and recommended, the Anti-Kickback, Stark, and HIPAA laws are antiquated and fail to recognize the current world. Existing federal health-care fraud and abuse laws create a “silo effect” that requires mapping and separating financial interests of health-care providers in order to ensure that patient referrals cannot be tainted by self-interest. Under Stark, a strict liability law, physicians cannot make a referral for the provision of “designated health services” to an entity with which they have a financial relationship (unless one of approximately 30 exceptions applies). In other words, for example, a hospital cannot refer patients to the home health care company that the hospital owns.
Going forward – and this has not happened yet – regulators and the Department will begin to claw back some of the more strict requirements of the Stark, Anti-Kickback, and HIPAA regulations to decrease the “silo effect” and allow providers to collaborate more on an individual’s whole health method. I had an example of this changing of the tide recently with my broken leg debacle. See blog. After an emergency surgery on my leg by an orthopedic surgeon because of a contracted infection in my wound, my primary care physician (PCP) called to check on me. My PCP had nothing to do with my leg surgery, or, to my knowledge, was never informed of it. But because of new technology that allows patient’s records to be accessed by multiple providers in various health care systems or practices, my PCP was informed of my surgery and added it to my chart. This never could have happened 20 years ago. But this sharing of medical records with other providers could have serious HIPAA implications if some restrictions of HIPAA are not removed.
In sum, if you haven’t had the pleasure of reading the Justice Manual in a while, now would be an appropriate time to do so since it has been revised for the first time in 22 years. This blog does not enumerate all the revisions to the Justice Manual. So it is important that you are familiar with the changes…or know someone who is.
Once You STOP Accepting Medicaid/Care, How Much Time Has to Pass to Know You Will Not Be Audited? (For Past Nitpicking Documentation Errors)
I had a client, a dentist, ask me today how long does he have to wait until he need not worry about government, regulatory audits after he decides to not accept Medicare or Medicaid any more. It made me sad. It made me remember the blog that I wrote back in 2013 about the shortage of dentists that accept Medicaid. But who can blame him? With all the regulatory, red tape, low reimbursement rates, and constant headache of audits, who would want to accept Medicare or Medicaid, unless you are Mother Teresa…who – fun fact – vowed to live in poverty, but raised more money than any Catholic in the history of the recorded world.
What use is a Medicaid card if no one accepts Medicaid? It’s as useful as our appendix, which I lost in 1990 and have never missed it since, except for the scar when I wear a bikini. A Medicaid card may be as useful as me with a power drill. Or exercising lately since my leg has been broken…
The answer to the question of how long has to pass before breathing easily once you make the decision to refuse Medicaid or Medicare? – It depends. Isn’t that the answer whenever it comes to the law?
By Whom and Why You Are Being Investigated Matters
If you are being investigated for fraud, then 6 years.
If you are being investigated by a RAC audit, 3 years.
If you are being investigated by some “non-RAC entity,” then it however many years they want unless you have a lawyer.
If being investigated under the False Claims Act, you have 6 – 10 years, depending on the circumstances.
If investigated by MICs, generally, there is a 5-year, look-back period.
ZPICS have no particular look-back period, but with a good attorney, reasonableness can be argued. How can you be audited once you are no longer liable to maintain the records?
The CERT program is limited by the same fiscal year.
The Alternative: Self-Disclosure (Hint – This Is In Your Favor)
If you realized that you made an oops on your own, you have 60-days. The 60-day repayment rule was implemented by the Centers for Medicare and Medicaid Services (“CMS”), effective March 14, 2016, to clarify health care providers’ obligations to investigate, report, and refund identified overpayments under the Affordable Care Act (“ACA”).
Notably, CMS specifically stated in the final rule that it only applies to traditional Medicare overpayments for Medicare Part A and B services, and does not apply to Medicaid overpayments. However, most States have since legislated similar statutes to mimic Medicare rules (but there are arguments to be made in courts of law to distinguish between Medicare and Medicaid).
Silence Can Be Deadly: Can You Be Held Responsible for Medicare/caid Billings Errors That You Never Knew Existed?
You submit a claim for medically necessary services for a Medicaid recipient. Let’s say you provide behavioral health care services and prescribe medication for people who suffer from schizophrenia or bipolar. One member of your staff (a PA) prescribes Abilify to a child – perfectly acceptable treatment for schizophrenia. The child suffers a seizure and dies. It is discovered, unbeknownst to you, as the owner of the agency, that the staff member prescribing the medication was not appropriately supervised. You are shocked. You are dismayed. You are terrified.
Sure enough, someone tattles on you and a qui tam lawsuit is filed against your agency.
A qui tam (kwee tam) lawsuit is Latin for “who as well,” a lawsuit brought by a private citizen (popularly called a “whistleblower”) against a person or company who is believed to have violated the law in the performance of a contract with the government or in violation of a government regulation, when there is a statute which provides for a penalty for such violations. The whistleblower in qui tam lawsuits can be awarded a lot of money, which is why whistleblowers bring the lawsuits.
In other words, a qui tam lawsuit filed against you is bad…very bad.
You are looking at six figures, easily, in attorneys’ fees, years of litigation, endless sleepless nights, and a high dose of Prozac. All because one of your staff was not properly licensed and could not prescribe medication without supervision. And you had no idea…
Wait…what? Isn’t “intent” or, legally, “scienter” a requirement to prove fraud?? You mean that I could be prosecuted for fraud when I had zero intent to commit fraud, plus, I didn’t even know it was occurring?
This is what happened to Universal Health Services, Inc.’s subsidiary that provided behavioral health care services in Massachusetts. Universal Health Serv. v. United States ex rel. Escobar, 136 S.Ct. 1989 (2016).
The Court of Appeals for the First Circuit held that each time a billing party submits a claim, it implicitly communicates that it conformed to the relevant program requirements, such that it was entitled to receive payment. Every claim implicitly promised compliance of every law!
Imagine the slippery slope with this decision – a multi-state company with offices across the nation bills millions to Medicare and Medicaid monthly. Executive management is in Rhode Island. An office in Tampa fails to check the criminal background of its employees for a period of a year, but in all other ways complies with the regulations and renders medically necessary services that entire year. According to the 1st Circuit opinion, the company could be liable for fraud and the false claims act, resulting in millions of dollars of penalties.
Did it matter to the judge in this case that the company was large? What if it were a small company with one office and four staff?
Juxtapose the 7th Circuit which held only express (or affirmative) falsehoods can render a claim “false” or “fraudulent.” In other words, you can only be held liable for fraud if you purposely or affirmatively acted.
The Supreme Court (last year) held that the implied false certification theory can, at least in some circumstances, provide a basis for liability.
The thinking is that a half truth is a lie. Which is correct…but is it fraud? A classic example of an actionable half-truth in contract law is the seller who reveals that there may be two new roads near a property he is selling, but fails to disclose that a third potential road might bisect the property.
The False Claims Act imposes civil liability on “any person who . . . knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval.” §3729(a)(1)(A). Here’s the prob-lem-o: Congress never defined what is “false.”
Here is what the Supreme Court had to say about the unlicensed social worker:
“So too here, by submitting claims for payment using payment codes that corresponded to specific counseling services, Universal Health represented that it had provided individual therapy, family therapy, preventive medication counseling, and other types of treatment. Moreover, Arbour staff members allegedly made further representations in submitting Medicaid reimbursement claims by using National Provider Identification numbers corresponding to specific job titles. And these representations were clearly misleading in context. Anyone informed that a social worker at a Massachusetts mental health clinic provided a teenage patient with individual counseling services would probably—but wrongly—conclude that the clinic had complied with core Massachusetts Medicaid requirements (1) that a counselor “treating children [is] required to have specialized training and experience in children’s services,” 130 Code Mass. Regs. §429.422, and also (2) that, at a minimum, the social worker possesses the prescribed qualifications for the job, §429.424(C). By using payment and other codes that conveyed this information without disclosing Arbour’s many violations of basic staff and licensing requirements for mental health facilities, Universal Health’s claims constituted misrepresentations.””
In English, this means that: With the act of submitting a Medicaid claim, you are promising that you have followed all rules, including the licensure status required for rendering that service.
The Court held that:
The issue is whether a defendant should face False Claims Act liability only if it fails to disclose the violation of a contractual, statutory, or regulatory provision that the Government expressly designated a condition of payment. The Court concluded that the FCA does not impose this limit on liability. But it also held that not every undisclosed violation of an express condition of payment automatically triggers liability. It matters whether the omission was material.
The Supreme Court determined that not all statutory or regulatory violations are material, disagreeing with the government and the 1st Circuit.
But the Court never made a decision regarding Universal Health Services, Inc. Instead, it vacated the 1st Circuit and remanded the case for reconsideration of whether respondents have sufficiently pleaded a False Claims Act violation. But in doing so, the Court gave guidance as to its opinion. It wrote: “This case centers on allegations of fraud, not medical malpractice.”
What that one sentence tells me is that the Supreme Court does not want to create liability for any and every regulatory omission/mistake on a Medicaid claim. Mistakes happen. People are human. Apparently, even the Supreme Court knows that…
Health Care Fraud Liability: With Yates Fired – What Happens to the Memo?
“You’re fired!” President Trump has quite a bit of practice saying this line from The Apprentice. Recently, former AG Sally Yates was on the receiving end of the line. “It’s not personal. It’s just business.”
The Yates Memo created quite a ruckus when it was first disseminated. All of a sudden, executives of health care agencies were warned that they could be held individually accountable for actions of the agency.
What is the Yates Memo?
The Yates Memo is a memorandum written by Sally Quillian Yates, former Deputy Attorney General for the U.S. Dept. of Justice, dated September 9, 2015.
It basically outlines how federal investigations for corporate fraud or misconduct should be conducted and what will be expected from the corporation getting investigated. It was not written specifically about health care providers; it is a general memo outlining the investigations of corporate wrongdoing across the board. But it is germane to health care providers.
See blog.
January 31, 2017, Sally Yates was fired by Trump. So what happens to her memo?
With Yates terminated, will the memo that has shaken corporate America that bears her name go as well? Newly appointed Attorney General Jeff Sessions wrote his own memo on March 8, 2017, entitled “Memorandum for all Federal Prosecutors.” it directs prosecutors to focus not on corporate crime, but on violent crime. However, investigations into potential fraud cases and scrutiny on providers appear to remain a top priority under the new administration, as President Donald Trump’s proposed budget plan for fiscal year 2018 included a $70 million boost in funding for the Health Care Fraud and Abuse Control program.
Despite Sessions vow to focus on violent crimes, he has been clear that health care fraud remains a high priority. At his confirmation, Sessions said: “Sometimes, it seems to me, Sen. Hirono, that the corporate officers who caused the problem should be subjected to more severe punishment than the stockholders of the company who didn’t know anything about it.” – a quote which definitely demonstrates Sessions aligns with the Yates Memo.
By law, companies, like individuals, are not required to cooperate with the Justice Department during an investigation. The Yates Memo incentivizes executives to cooperate. However, the concept was not novel. Section 9-28.700 of the U.S. Attorneys’ Manual, states: “Cooperation is a potential mitigating factor, by which a corporation – just like any other subject of a criminal investigation – can gain credit in a case that otherwise is appropriate for indictment and prosecution.”
Even though Trump’s proposed budget decreases the Department of Justice’s budget, generally, the increase in the budget for the Health Care Fraud and Abuse Control program is indicative of this administration’s focus on fraud, waste, and abuse.
Providers accused of fraud, waste, or abuse suffer extreme consequences. 42 CFR 455.23 requires states to suspend Medicaid reimbursements upon credible allegations of fraud. The suspension, in many instances, lead to the death of the agency – prior to any allegations being substantiated. Just look at what happened in New Mexico. See blog. And the timeline created by The Santa Fe New Mexican.
When providers are accused of Medicare/caid fraud, they need serious legal representation, but with the suspension in place, many cannot afford to defend themselves.
I am “all for” increasing scrutiny on Medicare/caid fraud, waste, and abuse, but, I believe that due process protection should also be equally ramped up. Even criminals get due process.
The upshot regarding the Yates Memo? Firing Yates did not erase the Yates Memo. Expect Sessions and Trump to continue supporting the Yates Memo and holding executives personally accountable for health care fraud – no more hiding behind the Inc. or LLC. Because firing former AG Yates, did nothing to the Yates Memo…at least not yet.
Self Disclosure Protocol: What Is It? And Do I Have To?
You are a provider, and you accept Medicare and Medicaid. You find out that the person with whom you contracted to provide extraction services for your dental patients has been upcoding for the last few months. -or- You discover that the supervisory visits over the past year have been less than…well, nonexistent. -or- Or your licensed therapist forgot to mention that her license was revoked. What do you do?
What do you do when you unearth a potential, past overpayment to you from Medicare or Medicaid?
Number One: You do NOT hide your head!
Do not be an ostrich. First, being an ostrich will have a direct correlation with harsher penalties. Second, you may miss mandatory disclosure deadlines, which will lead to a more in-depth, concentrated, and targeted audits by the government, which will lead to harsher penalties.
As for the first (harsher penalties), not only will your potential, monetary penalties leap skyward, but knowledge (actual or should have had) could put you at risk for criminal liability or false claims liability. As for increased, monetary penalties, recent Office of Inspector General (OIG) information regarding the self disclosure protocol indicates that self disclosure could reduce the minimum multiplier to only 1.5 times the single damages versus 2-10 times the damages without self disclosure.
As for the second (missing deadlines), your penalties will be exorbitantly higher if you had or should have had actual knowledge of the overpayments and failed to act timely. Should the government, despite your lack of self disclosure, decide to audit your billings, you can count on increased scrutiny and a much more concentrated, in-depth audit. Much of the target of the audit will be what you knew (or should have) and when you knew (or should have). Do not ever think: “I will not ever get audited. I am a small fish. There are so many other providers, who are really de-frauding the system. They won’t come after me.” If you do, you will not be prepared when the audit comes a’knocking on your door – and that is just foolish. In addition, never underestimate the breadth and scope of government audits. Remember, our tax dollars provide almost unlimited resources to fund thousands of audits at a time. Being audited is not like winning the lottery, Your chances are not one in two hundred million. If you accept Medicare and/or Medicaid, your chances of an audit are almost 100%. Some providers undergo audits multiple times a year.
Knowing that the definition of “knowing” may not be Merriam Webster’s definition is also key. The legal definition of “knowing” is more broad that you would think. Section 1128J(d)(4)(A) of the Act defines “knowing” and “knowingly” as those terms are defined in 31 U.S.C. 3729(b). In that statute the terms “knowing” and “knowingly” mean that a person with respect to information—(i) has actual knowledge of the information; (ii) acts in deliberate ignorance of the truth or falsity of the information; or (iii) acts in reckless disregard of the truth or falsity of the information. 31 U.S.C. 3729(b) also states that knowing and knowingly do not require proof of specific intent to defraud.
Number Two: Contact your attorney.
It is essential that you have legal counsel throughout the self disclosure process. There are simply too many ways to botch a well-intended, self disclosure into a casus belli for the government. For example, OIG allows three options for self disclosure; however, one option requires prior approval from OIG. Your counsel needs to maintain your self disclosure between the allowable, navigational beacons.
Number Three: Act timely.
You have 60-days to report and pay. Section 1128J(d)(2) of the Social Security Act requires that a Medicare or Medicaid overpayment be reported and returned by the later of (1) the date that is 60 days after the date on which the overpayment was identified or (2) the date any corresponding cost report is due, if applicable. See blog.
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If you have a Medicare issue, please continue to Number Four. If your issue is Medicaid only, please skip Number Four and go to Number Five. If your issue concerns both Medicare and Medicaid, continue with Number Four and Five (skip nothing).
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Number Four: Review the OIG Self Disclosure Protocol (for Medicare).
OIG publishes a Self Disclosure Protocol. Read it. Print it. Frame it. Wear it. Memorize it.
Since 2008, OIG has resolved 235 self disclosure provider cases through settlements. In all but one of these cases, OIG released the disclosing parties from permissive exclusion without requiring any integrity measures. What that means is that, even if you self disclose, OIG has the authority to exclude you from the Medicare system. However, if you self disclose, may the odds be ever in your favor!
Number Five: Review your state’s self disclosure protocol.
While every state differs slightly in self disclosure protocol, it is surprising how similar the protocol is state-to-state. In order to find your state’s self disclosure protocol, simply Google: “[insert your state] Medicaid provider self disclosure protocol.” In most cases, you will find that your state’s protocol is less burdensome than OIG’s.
On the state-side, you will also find that the benefits of self disclosure, generally, are even better than the benefits from the federal government. In most states, self disclosure results in no penalties (as long as you follow the correct protocol and do not hide anything).
Number Six: Draft your self disclosure report.
Your self disclosure report must contain certain criteria. Review the Federal Registrar for everything that needs to be included.
It is important to remember that you are only responsible for self disclosures going back six years (on the federal side).
Mail the report to:
DHHS/OIG/OCIG
Grantee Self-Disclosures
330 Independence Avenue, Room 5527
Washington, DC 20201
Or you can self disclose online at this link.
Warning: Medicare/caid Billing Confusion May Lead to Jail Time
All health care providers are under serious scrutiny, that is, if they take Medicaid. In Atlanta, GA, a dentist, Dr. Oluwatoyin Solarin was sentenced to a year and six months for filing false claims worth nearly $1 million. She pled guilty, and, I would assume, she had an attorney who recommended that she plead guilty. But were her claims actually false? Did she hire a criminal attorney or a Medicaid attorney? Because the answers could be the difference between being behind bars and freedom.
Dr. Solarin was accused of billing for and receiving payments for dental claims while she was not at the office. U.S. Attorney John Horn stated that “Solarin cheated the Medicaid program by submitting fraudulent claims, even billing the government for procedures she allegedly performed at the same time she was out of the country.”
I receive phone calls all the time from people who are under investigation for Medicare/caid fraud. What spurred on this particular blog was a phone call from (let’s call him) Dr. Jake, a dentist. He, similar to Dr. Solarin, was under investigation for Medicaid fraud by the federal government. By the time Dr. Jake called me, his investigation was well on its way, and his Medicaid reimbursements had been suspended due to credible allegations of fraud for almost a year. He was accused of billing for and receiving payments for dental services while he was on vacation…or sick…or otherwise indisposed. He hired one of the top criminal attorneys, who advised him to take a plea deal for a suspended jail sentence and monetary recompense.
But, wait, he says to me. I didn’t do anything wrong. Why should I have to admit to a felony charge and be punished for doing nothing wrong?
I said, let me guess, Jake. You were the rendering dentist – as in, your NPI number was on the billed claim – but you hired a temporary dentist to stand in your place while you were on vacation, sick, or otherwise indisposed?
How did you know? Jake asks.
Because I understand Medicaid billing.
When my car breaks down, I go to a mechanic, not a podiatrist. The same is true for health care providers undergoing investigation for Medicare/caid fraud – you need a Medicare/caid expert. A criminal attorney,most likely, will not understand the Medicare/caid policy on locum tenens. Or the legal limitations of Medicaid suspensions and the administrative route to get the suspension lifted. Or the good cause exception to suspensions.
Don’t get me wrong, I am not advocating that, when under criminal, health care fraud investigation, you should not hire a criminal attorney. Absolutely, you will want a criminal attorney. But you will also want a Medicare/caid attorney.
What is Locum tenens? It is a Latin phrase that means temporary substitute. Physicians and dentists hire locum tenens when they go on vacation or if they fall ill. It is similar to a substitute teacher. Some days I would love to hire a locum tenens for me. When a doctor or dentist hires a temporary substitute, usually that substitute is paid by the hour or by the services rendered. If the payor is Medicare or Medicaid, the substitute is not expected to submit the billing and wait to be reimbursed. The substitute is paid for the day(s) work, and the practice/physician/dentist bills Medicare/caid, which is reimbursed. For billing purposes, this could create a claim with the rendering NPI number as Dr. Jake, while Dr. Sub Sally actually rendered the service, because Dr. Jake was in the Bahamas. It would almost look like Dr. Jake were billing for services billing the government for procedures he allegedly performed at the same time he was out of the country.
Going back to Dr. Jake…had Dr. Jake hired a Medicare/caid attorney a year ago, when his suspension was first implemented, he may have be getting reimbursed by Medicaid this whole past year – just by asking for a good cause exception or by filing an injunction lifting the suspension. His Medicaid/care attorney could have enlightened the investigators on locum tenens, and, perhaps, the charges would have been dropped, once the billing was understood.
Going back to Dr. Solarin who pled guilty to accusations of billing for services while out of the country…what if it were just a locum tenens problem?
