Tag: Fraud & Abuse

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Stark + AKS Final Rules

The final rules for changes to the Stark Law and Anti-Kickback Statute (healthcare fraud & abuse laws) have been published and go into effect on January 19, 2020. Of course, health lawyers love this stuff, but it could impact other practice areas too.

Transaction attorneys, you already know to be very careful if your transaction or arrangement, in any way, involves a hospital, doctor, or any other healthcare provider or entity. Even if your deal does not involve a healthcare provider, but could impact reimbursement by any federal program, these statutes may be implicated.

Litigators, these statutes can apply to your cases too. If your case involves one of these improper payments or an improper business structures, you might have a contractual avoidance theory available to you, if you’re the defendant, or an additional claim of fraud, if you are the plaintiff.

The key point is that these statutes can apply in ways that don’t seem immediately obvious.

Source: Stark + AKS Final Rules

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OIG Fraud Concerns Over Physician Speaker Programs

In a Special Fraud Alert issued on November 16, 2020, the Department of Health and Human Services Office of Inspector General (HHS-OIG) raised significant fraud and abuse concerns with companies offering or providing remuneration in connection with physician speaker programs. Speaker programs typically involve one health care professional presenting to others on a company’s drug or device, or a disease state relevant to the company’s products, in exchange for a speaker honorarium. While speaker programs may have some legitimate purposes, HHS-OIG warned of risk the programs create for drug or medical device companies and health care professional participants, if one purpose of the program is to induce or reward federal health care program referrals.

This has been a long time coming. There have been various prosecutions and settlements involving speaker programs over the years. I’m surprised it has taken this long for OIG to issue a Special Fraud Alert.

Source: OIG Fraud Concerns Over Physician Speaker Programs

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Houston physician sentenced to prison for $17M billing fraud

Yolanda Hamilton, MD, was found guilty by a federal jury of participating in a Medicare scheme that involved signing false “plans of care” and other medical documents for home health services that were used to submit fraudulent claims to Medicare. She allegedly received $30,000 in kickbacks during the four-year scheme. Prosecutors alleged that Dr. Hamilton and her co-conspirators submitted more than 2,500 fraudulent claims to Medicare, according to the Houston Chronicle.

Source: Houston physician sentenced to prison for $17M billing fraud

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California Doctor Pleads Guilty to EKRA Violations

On September 15, 2020, Doctor Akikur R. Mohammad, a California resident and drug treatment facility owner, pled guilty before the U.S. District Court of New Jersey for violating the Eliminating Kickbacks in Recovery Act (“EKRA”), one of the country’s first convictions under this statute targeting opioid kickbacks. Enforcement under EKRA can help shed light on questions remaining concerning the statute’s broad definitions, particularly around laboratory services, and its application in light of other federal laws such as the federal anti-kickback statute (“AKS”). Thus far, known enforcement cases under EKRA have focused on opioid and drug treatment cases.

EKRA was designed to combat the opioid crisis, but in its haste to passage, the definition of “laboratory” was not sufficiently limited to those involved in substance abuse testing. The omission has cased a great amount of speculation about the DOJ’s enforcement intentions.

The full extent of EKRA’s implications still remain uncertain. Most open questions circulate around its application to clinical laboratories, but Dr. Mohammed’s guilty plea, as well as earlier enforcement in other jurisdictions have focused on opioid and drug treatment. Such experiences suggest DOJ is focused on EKRA’s intent and inclusion in the SUPPORT Act, despite potentially broader statutory language. That said, such focus does not ensure that it will not be used more broadly in the future. This plea does signal an increased focus on EKRA enforcement by DOJ moving forward. Future enforcement may provide further certainty around EKRA’s applicability to non-opioid-related lab and other services, as well as answer other questions about how the AKS safe harbors and EKRA interact.

You can read the DOJ Press Release here.

Source: California Doctor Pleads Guilty to EKRA Violations

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San Antonio ER hospital sued for alleged overbilling

A former patient has sued Baptist Emergency Hospital in San Antonio and its owner alleging they fraudulently overcharged for lab work to generate higher reimbursements.

This is not a qui tam case, but rather a state court private action. The Plaintiff accuses Baptist Emergency Hospital at Shavano Park of carrying out a scheme known as “unbundling,” which is when a facility bills separately for some or all tests analyzed as part of a panel rather than billing for the panel.

The Plaintiff visited the hospital in December 2018. Although the hospital accepted his insurance, he received a “laboratory” bill for $4,500 nine months later. Most of the charge was related to a metabolic panel and a liver function test, together consisting of multiple components. The suit alleges that the components were billed individually rather than as a complete panel, resulting in a higher bill.

A “Pricing Transparency Document” posted on the hospital’s website in 2018 showed the cost of a basic metabolic panel as almost $754. Only seven of the eight tests in the panel were performed, the suit says, but Keslar was billed nearly $1,221, according to the suit.

The petition alleges that this same unbundling practice is occurring across all Baptist Emergency Hospital facilities. Plaintiff is seeking certification of a class-action.

Source: San Antonio emergency hospital sued for alleged overbilling

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OIG Semiannual Report to Congress

OIG issued its Semiannual Report to Congress summarizing the activities of the Department of Health and Human Services (HHS), Office of Inspector General (OIG), for the 6-month period ending on March 31, 2020.

The OIG noted that during this reporting period, there were 443 criminal actions, 370 civil actions, 903 exclusions, and an expected $1.51 billion in investigative recoveries and $605.2 million in expected audit recoveries.

Of particular import to the COVID-19 pandemic, the Principal Deputy Inspector General noted that OIG will diligently investigate fraud related to the public health emergency:

OIG is investigating and holding accountable those who would exploit the emergency to defraud the public and HHS programs, including through fraudulent marketing schemes for COVID-19 tests, identity theft, and submission of false claims for payment. Building on longstanding work focused on emergency preparedness and response, OIG is undertaking and planning oversight of HHS’s COVID-19-related programs to ensure that program requirements are met to protect patient health and safety, that taxpayer funds invested to provide relief to providers and care to patients are not misspent, and that critical infrastructure supporting an effective emergency response is secure. OIG is working to provide the public and policymakers in HHS and Congress with sophisticated analyses and relevant, reliable, and actionable data and information.

Source: OIG Semiannual Report to Congress – Oct 2019–March 2020

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Justice Department accuses Anthem of Medicare fraud

Yet another allegation of Medicare Advantange risk adjustment fraud, this time by Anthem. I wrote about the government’s case against Cigna here.

The case alleges that Anthem falsely certified the accuracy of the diagnostic data it sent to the Centers for Medicare and Medicaid Services, causing CMS to calculate risk-adjustment payments to the insurer based on inflated diagnosis information. For example, Anthem submitted an ICD-9 diagnosis code for active lung cancer for one patient, but its chart review program did not substantiate the diagnosis, according to court documents.

Source: Justice Department accuses Anthem of Medicare fraud

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DOJ sues Cigna, alleging $1.4B in Medicare Advantage fraud

Cigna falsified the health conditions of its Medicare Advantage plan members to coax CMS into making larger payments to the insurer on behalf of beneficiaries, a U.S. Justice Department lawsuit alleges.

Medicare Advantage organizations get reimbursed by Medicare based on a formula that takes into account the patient population’s acuity levels. Risk adjustment scores adjust for health conditions so that more reimbursement levels are higher for more costly or chronically ill populations.

The risk adjustment scores have become a source of potential fraud. If the scores are not accurately calculated, MA organizations can receive more reimbursement than their populations warrant. The scores are calculated by CMS based on information provided by the MA organization about the patients health conditions. If the health information provided by the MA organization is inaccurate, so too will be the risk adjustment scores derived by CMS.

Cigna uses a medical assessment system called “360” to assess the health condition of its patients, but this system did not require the providers to state whether the patient’s condition was derived from a clinical assessment or the patient’s subjective description.

CMS alleges that Cigna received an estimated $1.4 billion from 2012 to 2017 and DOJ is seeking equal to three times that amount in damages, along with a civil penalty of $11,000 for each violation.

Source: DOJ sues Cigna, alleging $1.4B in Medicare Advantage fraud

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Two charged in prescription and kickback scheme

An 11-count indictment unsealed on Friday charges former Kindred Home Health employee Amber Price, 37, and Christopher Cruz, 46, owner of a medical marketing business, CP Cruz Management Group, LLC (Cruz), with one count of conspiracy to violate the federal anti-kickback law.

Under the alleged scheme, Price and Cruz would create fraudulent prescriptions using actual hospital patient data. They would either forge the physicians’ signatures on the prescription forms or use pre-signed or photocopied forms. Price and Cruz would then provide fraudulent prescriptions to pharmacies or labs for submission to Medicare and private payors for reimbursement. When the pharmacies and labs got reimbursed, they would pay a percentage of the reimbursement to Price and Cruz.

The submission of false prescriptions is a violation of the civil False Claims Act. No doubt, Price and Cruz were charged with conspiracy to violate the Anti-Kickback Statute in order to impose criminal liabilities on top of the civil penalties under the FCA.

Source: Two people charged in connection with health care fraud scheme, officials say

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Medical Device Maker to Pay $18 Million to Settle Allegations of Improper Payments to Physicians

This is not a Texas company, but it is a good example of how some manufacturers try to cloak improper payments under the veil of legitimate compensation.

The device manufacturer paid millions of dollars in “advertising assistance, practice development, practice support, and purported unrestricted educational grants” directly to local healthcare providers to induce sales of their products. Moreover, these inducements were only paid to select providers to reward them for past sales. The press release highlights the fact that the manufacturer’s compliance officer warned them of the practice, but those warnings went unheeded.

This matter started as a qui tam (Whistleblower) action under the False Claims Act by the former chief compliance officer of the company.

Source: Medical Device Maker to Pay $18 Million to Settle Allegations of Improper Payments to Physicians