Archives for March 2014

Kusserow’s Corner: Recent Enforcement Actions Against Physicians

A lot of enforcement actions against institutional providers and managed care organizations gain wide press, but actions taken against physicians appear to be less-often noted. In fact, many are prosecuted, not only at the federal level but by state authorities as well. The following illustrate this by highlighting some recent cases involving individual physicians found to being engaged in wrongful activities.

Physicians Mansour Sanjar and Cyrus Sajadi, owners of Spectrum, were convicted of conspiracy to commit health care fraud and conspiracy to pay kickbacks as well as related counts of health care fraud and paying illegal kickbacks for approximately $97 million. They signed admission documents and progress notes certifying that patients qualified for partial hospitalization program (PHP) services, when in fact, the patients did not qualify for or it, as well as billing Medicare for those services when the beneficiaries were actually watching movies, coloring and playing games–activities. Patient recruiters received kickbacks for referrals and in some cases, the patients received a portion of those kickbacks.

Dr. Yash Khanna in Livingston, N.J., pleaded guilty to receiving over $10,000 worth of illegal cash kickbacks in exchange for referring patients to a diagnostic testing center and faces up to five years of imprisonment per anti-kickback charge. Khanna also admitted to not filing tax returns for three years. This was the 15th doctor to be convicted in connection with the fraud investigation.

Jose Mercado-Francis, a former Detroit-area physician, pleaded guilty for his role in an $11.5 million health care fraud scheme. He held himself out as a licensed physician and purported to provide physician home services to Medicare beneficiaries, when actually his medical license had been revoked. He operated out of a medical practice owned by a co-conspirator. He prepared medical documentation and signed them as if they had provided services to Medicare beneficiaries, when, in fact, they had not. The scheme involved than $11.5 million for the cost of physician home services.

Dr. Chang Ho Lee, Palisades Park, N.J., pleaded guilty to health care fraud and agreed to forfeit more than $3.4 million in fraud proceeds. He and two others recruited patients by offering free lunches and recreational classes and provided them with spa services, such as massages and facials, then falsely billed Medicare for more than $13 million using those patients’ Medicare numbers. They then billed Medicare for physical therapy, lesion removals and other services that were neither medically necessary nor provided.

Dr. Eguert Nagaj and chiropractor Igor Sher were indicted on 16 counts each of mail fraud in connection with a decade long health care fraud of nearly $3 million. They were in charge of three medical practices in Buffalo Grove, Ill., where they allegedly were involved in a scheme to fraudulently bill insurers for health care services that were not provided.

Dr. Mikhail L. Presman, a Brooklyn, N.Y. psychiatrist, was sentenced to three years of supervised release following his prison term and ordered to forfeit $1.2 million and pay restitution for falsely claiming to provide at-home services to Medicare beneficiaries in the amount of $4 million in Medicare claims for home treatment of Medicare beneficiaries notwithstanding his full-time salaried position as a psychiatrist at the VA hospital in Brooklyn. He did not provide any treatment to a substantial number of the beneficiaries he claimed to have treated and submitted claims to Medicare for 55 home medical visits to beneficiaries who were hospitalized on the date of the purported visits.

Dr. Lafayette Twyner, who practiced in Newton, pleaded guilty to health care fraud for billing private insurers for unnecessary prescriptions and medical services and for illegally prescribing drugs, which resulted in one death. He will serve five years in prison and three years in home confinement or in community corrections.

Dr. Roque Joel Ramirez, of Corpus Christi, Texas, pleaded guilty to mail fraud related to a $1.4 million health care fraud case. He owned Health Resolutions that submitted almost 5,000 false claims, including treatment claims for deceased patients.

Dr. Viwathna Bhuthimethee, in Alton, Ill., pleaded guilty to health care fraud and 14 counts of illegal distribution of controlled substances and improperly prescribing 1,585 pain pills with hydrocodone and 562 Xanax pills.

Christopher Gregory Wayne, dubbed the “Rock Doc” of Miami Beach, Fla., pleaded guilty to defrauding the Medicare program and illegally prescribing painkillers and fraudulently billing for more than $5 million worth of un-provided or unnecessary physical therapy services. He is required to pay more than $2 million and surrender his home and car to the government and, in exchange, 14 previous health care fraud charges will be dismissed

Dr. Spyros Panos, an orthopedic surgeon, of Dutchess County, N.Y., pleaded guilty to defrauding private health insurers, and was sentenced to four and a half years in prison and two years of post-release supervision. Panos’ plea agreement also requires him to pay restitution of as much as $5 million to the insurers and pay $5 million to the government

Dr. Donald Prohovich, a dentist practicing in Easton, Mass., and a dental provider for MassHealth, the state’s Medicaid program, settled allegations of fraudulent billings for $400,000 for house calls made to beneficiaries residing in nursing homes.

Dr. David Lewis, a dentist in Sacramento was charged with health care fraud in an alleged $1 million fraud case by targeting insurance beneficiaries, fraudulently billing the company for un-provided and medically unnecessary dental services, and offering cash incentives in exchange for treatment at his clinic and recruiting other patients.

Dr. Spencer Wilking, former medical director for MJG Management Company in Waltham, Mass., pleaded guilty to participating in a health care fraud scheme where he authorized hundreds of ineligible Medicare beneficiaries to receive home health services, costing Medicare more than $27 million.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Copyright © 2014 Strategic Management Services, LLC. Published with permission.

Efforts to Reduce HAIs Meeting with Success

Progress is being made in reducing the number of health care-associated infections (HAIs) according to two reports released by the Center for Disease Control (CDC). An HAI is an infection a person receives while they are in the hospital, in another facility, or under the care of a provider while they are being treated for another condition. Reducing HAIs is a top priority for HHS. In 2009, HHS adopted the National Action Plan to Prevent Health Care-Associated Infections: Road Map to Elimination and since that time CDC has been reporting on the progress towards meeting those goals.

Progress in General

Based on the most recent data, the CDC reports that one in 25 patients have contracted at least one infection during the course of their hospital stay. In 2011, there were approximately 722,000 according to a report in the New England Journal of Medicine. That number is extrapolated from reported HAIs in 183 hospitals. This number is down from the estimated 1.7 million HAIs estimated in a 2007 report. The report also estimated that about 75,000 people died as a result of their health care-associated infection during 2011. “Although there has been some progress, today and every day, more than 200 Americans with health care-associated infections will die during their hospital stay,” said CDC Director Tom Frieden, M.D., MPH in a statement on the two reports.

The most common HAIs were pneumonia and surgical site infections which each accounted for 22 percent of all HAIs. Urinary tract infections accounted for 13 percent of the HAIs and blood infections accounted for 10 percent of HAIs. The most common germs causing HAIs were C.difficile responsible for 12 percent of HAI infections, Staphylococcus aureus, including MRSA which accounted for 11 percent of HAI infections. Klebsiella and E. coli accounted for 10 and 9 percent respectively of HAI infections.

Patients most likely to acquire an HAI were older, had been in the hospital longer at the time of surgery, were in a larger hospital, had a central line catheter in place, were on a ventilator, or were in critical care, according to the report. Device–associated infections, which have been a major focus of infection prevention in recent decades, accounted for only 25.6 percent of all HAIs. Infections not associated with devices or operations accounted for approximately half of all HAIs.

“Our nation is making progress in preventing healthcare-associated infections through three main mechanisms: financial incentives to improve quality, performance measures and public reporting to improve transparency, and the spreading and scaling of effective interventions,” said Patrick Conway M.D. who is CMS’ Deputy Administrator and CMS’ chief medical officer.  A provision so of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) will impose a 1 percent reduction in payment for the hospitals that are in the top 35 percent of HAIs beginning on October 1, 2015.

Specific Co3nditions

In a second report the CDC said that significant progress has been made in the reduction in a number of HAIs associated with specific procedures. Central line-associated bloodstream infections saw a 44 percent reduction from 2008. Surgical site infections dropped by 20 percent during the same time period for 10 procedures tracked during that time with the most significant reductions in HAIs being associated with cardiac surgeries. There were only small drops of four percent and two percent for hospital-onset MRSA and hospital-onset C. difficle infections respectively. “The most advanced medical care won’t work if clinicians don’t prevent infection through basic things such as regular hand hygiene,” said Frieden.

MainStory: TopStory GeneralNews QualityNews IPPSNews

Senators Urge FDA Not to Stifle Mobile Medical Apps Through Over-Regulation

On March 18, 2014, a bipartisan group of U.S. Senators, including Michael Bennet (D-Colo.), Orrin Hatch (R-Utah), Tom Harkin (D-Iowa), Lamar Alexander (R-Tenn.), Mark Warner (D-Va.), and Richard Burr (R-N.C.) sent a letter to FDA Commissioner Dr. Margaret Hamburg, urging the FDA to provide further clarity in its policies regarding medical mobile applications (MMAs).

In their joint letter, the senators stated their position on MMAs, “It is important for the FDA to be well-equipped with the proper tools to be able to advance public health while taking care that innovation is not stifled through uncertainty or over-regulation. While the FDA’s final guidance has provided clarity on the agency’s approach to regulation of mobile medical applications, we believe more transparency is needed to avoid stakeholder confusion over how a wider range of medical software might be appropriately regulated. … We urge the FDA to work with Congress to identify policies that will serve the best interests of patients and innovators alike.”

In 2013, the FDA issued final guidance for oversight of MMAs. The final guidance, entitled “Mobile Medical Applications: Guidance for Industry and FDA Staff,” uses a risk-based approach to define what the FDA considers to be a MMA, with the agency’s efforts concentrated on high-risk medical software.  The FDA has also provided the  MMA industry with the following examples: (1) MMAs the FDA regulates; (2) MMAs that are not medical devices; (3) MMAs the FDA has approved; and (4) MMAs for which the FDA will exercise enforcement discretion.

While the Senators appreciate the FDA’s decision to use a risk-based approach to regulation, they are still concerned about possible over-regulation. And they are not the only members of Congress to indicate their concern.

In fact, the Sensible Oversight for Technology which Advances Regulatory Efficiency (SOFTWARE) Act of 2013, H.R. 3303, proposed October 22, 2013 in the House of Representatives by U.S. Rep. Marsha Blackburn (R-Tenn.), seeks to curb the FDA’s regulatory powers by deregulating less risky medical software.

Then on February 10, 2014, Sens. Deb Fischer (R-Neb.) and Angus King (I-Maine) introduced the Preventing Regulatory Overreach to Enhance Care Technology (PROTECT) Act of 2014, S. 2007, which seeks to clarify the extent to which the FDA can regulate clinical and health software.

In their letter, the senators also asked Dr. Hamburg to provide responses to the following questions about current policies and oversight of MMAs and other medical software within three weeks:

  • Compared to current FDA guidance, what impact would Congress establishing categories of medical software in legislation have on the FDA’s oversight of medical mobile applications?
  • We understand you have set up an e-mail address to answer questions about FDA’s regulation of specific mobile medical applications. How many e-mails have you received to date and what is FDA’s average response time in calendar days?
  • In addition to the dedicated e-mail address, what policies and practices has FDA established to further assist innovator companies that are not familiar with FDA’s regulations and requirements applicable to medical device manufacturers?
  • What role, if any, can statutory definitions play to clarify any uncertainty with respect to assigning risk level to medical software?
  • How is the FDA determining what types of medical software updates, even minor updates, change the function of or add a function to the medical software and would require FDA review?
  • When a medical mobile application presents a novel function that has never been classified by the FDA, what procedures are used to determine if and how that application should be regulated by the FDA?
  • How has the FDA been coordinating with the Office of the National Coordinator and Federal Communications Commission to address the recent FDA Safety and Innovation Act working group’s concerns over interoperability?
  • Are there additional legislative tools that the FDA needs to better oversee the regulation of medical mobile applications?
  • What approach does the FDA use to regulate complex medical software with multiple and separate functions?

Transparency May Not Help Control Costs, But Multi-Payer Alignment Might

The pressure on both federal and state governments to control health care spending may not be sufficient to counter the upward pressures from powerful providers, consumer demand, and increasing use of technologies, says Alan R. Weil, Executive Director of the National Academy for State Health Policy. In a keynote address March 26, 2014, to the American Health Lawyers Association annual conference on Medicare and Medicaid Reimbursement Issues, Weil said that the alignment of the payment policies of private insurers with federal and state health care programs would be crucial to controlling costs, but the alignment itself would be difficult to achieve.

The conventional wisdom is that Medicare and Medicaid pay less than providers’ costs to furnish services, while private payers pay a significant percentage above those costs, in effect, subsidizing the public programs. However, the relationship between the stated costs and payment is actually not clear because there is no agreed-upon definition of providers’ actual costs.

Factors Tending to Increase Prices

The limited revenue available to government payers exerts downward pressure on expenditures, but other forces operate to push payments up. In order to meet consumer demand for open access to providers, private payers have not succeeded in limiting payment through the use of networks. There is wide variation in payments to providers both geographically and within any given local area. Weil noted that transparency in payments sometimes serves to drive prices up because the lower-paid providers want increases to match what others are paid. To the extent that providers have merged or consolidated, their increased market power also may help to push payments higher.

Obstacles to Alignment

The trend away from regulation has likely contributed to the decline of multi-payer cooperation. In 1980, 30 states imposed some regulation on payment, but today, only two do. Private payers may not want to give up any competitive be advantage they have over their competitors; therefore, they often treat the details of their payment arrangements with providers as proprietary. Direct agreement among payers on the rates to be paid for services also raises antitrust concerns, although agreement on quality measures should not. It also would be very difficult for Medicare to align nationally with the Medicaid programs in every state because of the differences among state Medicaid programs.

The development of a consistent alignment among state, federal and private payers would take many years. Still, agreement on the use of pay-for-performance or value-based purchasing criteria as a factor in reimbursement could be an important first step.