DOJ focus is on ‘egregious’ and ‘despicable’ health care fraud

In a speech on May 18, 2017, at the American Bar Association’s 27th Annual Institute on Health Care Fraud, Acting Assistant Attorney General Kenneth A. Blanco stressed that the Department of Justice (DOJ) would continue with keeping health care fraud a priority. The amount of loss to the American tax payer per year due to healthcare fraud is in the billions, with some estimates putting the number close to $100 billion per year.

Blanco stressed the importance of cooperation between the Medicare Strike Force, the U.S. Attorney’s Offices, and federal and state investigative agencies. He noted that the DOJ was employing an in-house data analytics team to review CMS billing data in order to focus on the most aggravated cases quickly. In turn this data is pushed to other federal and state investigative agencies.

Detailing examples of recent work by the Health Care Fraud Unit, Blanco highlighted that October 2016, Tenet Healthcare Corporation, a publicly-traded company and the third largest hospital chain in the United States, entered into a global resolution with the government, agreeing to resolve an investigation of a corporate bribery and fraud scheme at four Tenet-owned hospitals in Georgia and South Carolina. As part of that scheme, the hospitals paid over $12 million in bribes to a chain of prenatal care clinics in exchange for the referral of Medicaid patients.

Under the global resolution: (1) two Tenet subsidiaries pleaded guilty to conspiracy to defraud the United States and pay kickbacks and bribes in violation of the Anti-Kickback Statute, and forfeited over $146 million in Medicare and Medicaid funds; (2) Tenet entered into a non-prosecution agreement requiring, among other things, an independent compliance monitor for a period of three years over all entities owned, in whole or in part by Tenet; and (3) Tenet and its subsidiaries entered into a civil settlement agreement and paid $368 million to the United States, the State of Georgia and the State of South Carolina (see Corporations, beware: Tenet Healthcare to pay $513M to settle kickback charges, Health Law Daily, October 4, 2016). Subsequently two individuals have pleaded guilty and a former senior executive of Tenet was indicted for the scheme (see DOJ comes for executive in Tenet fraud case, Health Law Daily, February 2, 2017).

CMS has estimated that the total health care spending in the United States in 2015 reached $3.2 trillion, or 17.8 percent of the gross domestic product. As such, the DOJ considered health care fraud as “egregious,” and from Blanco’s viewpoint, “despicable,” because it resulted in depriving medical care for those in actual need. Blanco noted that health care fraud impacts the public’s access to medical care, even the most basic forms, because fraud increases the costs for all.

Florida hospital improperly billed Medicare almost $300,000 over two years

For over two years, University of Florida Health Jacksonville did not comply with Medicare billing requirements, due to inadequate billing controls. The noncompliance resulted in overpayments of at least $273,000, according to an audit by the HHS Office of the Inspector General (OIG).

Claims

The 695-bed not-for-profit hospital submitted 11,134 inpatient claims during the audit period (January 2013 through September 2014). Medicare paid the hospital $167 million on those claims. The OIG audit evaluated 1,305 inpatient claims that were potentially at risk for billing errors. From those claims, the OIG selected a random sample of 154 paid claims, totaling $1,964,826. Although the OIG determined that the hospital complied with billing requirements for the majority of the claims (133), the audit revealed that the hospital failed to comply with Medicare billing requirements for 21 claims, resulting in a net overpayment of $63,881 for the audit period. Based upon the sample, the OIG extrapolated that the hospital improperly received overpayments of at least $273,346 between January 2013 and September 2014.

Errors

For 19 of the 154 claims, the hospital billed incorrect diagnosis-related group (DRG) codes. For example, in one case, the hospital submitted a claim with a secondary diagnosis code 599.0 (urinary tract infection), despite the fact that the patient’s medical record indicated the patient had no signs or symptoms of a urinary tract infection. In other words, the hospital had no basis to assign code 599.0. The hospital attributed the billing mistakes to human error. The noncompliance related to the DRG codes accounted for the vast majority of the errors and led to net overpayments of $47,165.

When a patient is discharged from an acute care hospital and readmitted to the same hospital on the same day for symptoms related to the prior stay, the hospital is required to combine the original and subsequent stay into a single claim. The OIG determined that for 2 of the 154 audited claims, the hospital incorrectly billed Medicare for related discharges and readmissions that occurred on the same day. The hospital attributed the improper billing to human error.

Recommendations

The OIG recommended that the hospital:

  • refund the estimated $273,346 in overpayments to the Medicare program;
  • identify and return similar overpayments; and
  • strengthen billing and coding controls to ensure future compliance.

 

Objections

The hospital objected to the findings regarding 11 of 21 inpatient claims. Additionally, although the hospital acknowledged that human error contributed to the 10 other errors, there was “no evidence to support systemic coding or billing concerns.” The hospital also challenged the OIG’s authority to extrapolate a payment error rate.

 

 

Don’t get caught in coding, the clinical matters too

Compliance officers should be careful to remember the clinical side of compliance, as well as the legal components, according to a webinar titled, “The Medical in Medical Necessity,” presented by CJ Wolf, Senior Compliance Executive at Healthicity, and sponsored by the Health Care Compliance Association (HCCA) Wolf reminded compliance officers that just because you have proper medical documentation for a service does not mean the service was provided with medical necessity.

Medically unnecessary

Wolf walked through examples of instances where Medicare or Medicaid fraud cases resulted from allegations that providers billed for medically unnecessary procedures. He used specific clinical information to describe how allegations led to fraud settlements or convictions. He pointed to examples from cardiology where physicians allegedly billed for unnecessary stress tests, ultrasounds, tests without prior examinations, peripheral interventions, and groin artery tests. More generally, Wolf noted, medical necessity may turn on specific local coverage determinations (LCDs) or requirements from a Medicare administrative contractor (MAC). As an example of this, he described a scenario where a MAC required that a provider try a conservative treatment option before a more costly treatment method could become medically necessary.

Resources

In the event that a physician is allegedly providing unnecessary medical services, compliance officers can rely on information from organizations like the Society for Vascular Surgery, the American College of Cardiology, and the American Society of Echocardiography to determine the appropriateness of services. Such organizations, in the case of cardiac services, can provide an overview of which interventions are necessary for particular situations, including those that are permissible first line treatments. Additionally, Wolf noted that the medical necessity of services is something which reaches beyond compliance and the anecdotes of providers. For example, he pointed to clinical studies published in the Journal of the American Medical Association (JAMA) regarding the frequency of appropriate or inappropriate medical interventions.

DOJ comes for executive in Tenet fraud case

A former senior executive of Tenet Healthcare Corporation is facing charges for his alleged role in a fraud scheme that resulted in Tenet and its subsidiaries billing Medicaid programs more than $400 million over a thirteen-year period. The Department of Justice (DOJ) charged the former senior vice president of operations for Tenet’s Southern States Region and former CEO of North Fulton Medical Center with mail, health care, and major fraud. The executive pleaded not guilty to his alleged role in the scheme, which involved the payment of bribes to prenatal clinics in exchange for referrals of undocumented, pregnant Medicaid patients to Tenet Health System Medical, Inc. (THSM) hospitals, including North Fulton Medical, Atlanta Medical Center, Inc., Spalding Regional Medical Center, Inc., and Hilton Head Hospital.

Tenet, Atlanta Medical, and North Fulton Medical entered into a $513 million settlement in October 2016 to resolve criminal and civil charges; the settlement included the hospitals’ agreement to forfeit more than $145 million in Medicaid payments for unlawful referrals. Atlanta Medical and North Fulton Medical allegedly participated in the scheme while subject to a 2006 corporate integrity agreement (CIA) with the HHS Office of Inspector General (OIG). THSM and its subsidiaries entered into a three-year non-prosecution agreement, as well (see Corporations, beware: Tenet Healthcare to pay $513M to settle kickback charges, October 4, 2016).

In addition to the general scheme involving the payment of bribes and kickbacks from 2000 through 2013, Tenet operated an affiliated billing center than allegedly assisted in processing Medicaid billings for payment from 2007 through 2013. The DOJ alleges that the executive “took affirmative steps to conceal the scheme,” by working around internal accounting controls; falsifying books, records, and reports; and falsely certifying to the OIG that Tenet was complying with the terms of the CIA and Medicare and Medicaid requirements while knowing that Tenet was paying for illegal referrals.