Atlanta pain clinic feels financial hurt after allegedly bending Medicare rules

Atlanta Medical Clinic (AMC) and its owner agreed to pay $250,000 to settle False Claims Act (FCA) (31 U.S.C. §3729 et seq.) allegations that the clinic billed Medicare for services performed by a suspended physician and for administering drugs that were not approved by the FDA.

Suspended physician

An AMC physician was suspended from the Medicare program in June 2013 for making false statements regarding his criminal history. Despite the suspension, AMC allegedly continued to claim and receive payment for medical services rendered by the physician. Because of the suspension, none of those services were eligible for Medicare reimbursement and, therefore, reimbursement claims related to those services constituted false claims. AMC allegedly circumvented the suspension by submitting claims for services performed by the physician as though they were performed by another physician.

Unapproved drugs

AMC also, allegedly, violated the FCA by seeking and obtaining reimbursement for a Canadian, non-FDA approved knee treatment drug—Orthovisc®. The alleged claims are false because Medicare does not cover the cost of foreign, non-FDA approved treatments.

CMS moves ahead with new Medicare cards

CMS is moving forward with its fraud prevention initiative to remove Social Security numbers from Medicare cards. New cards issued under the program will omit the Social Security numbers of Medicare beneficiaries and, instead, use a unique, randomly-assigned number called a Medicare Beneficiary Identifier (MBI). The new cards will be shipped by CMS beginning April 2018.

Transition

The MBI will be based upon the Health Insurance Claim Number (HICN) currently used on Medicare cards. The use of an MBI in place of a Social Security number is designed to reduce both identity theft and the illegal use of Medicare benefits. The MBI will allow providers to identify beneficiaries using secure access tools. To ensure a smooth transition, there will be a 21-month overlap period where either the MBI or the HICN will be effective for looking up a beneficiary. As part of the transition, beneficiaries will be instructed how to safely and securely destroy their existing Medicare and keep their MBI confidential. The new cards will have no impact on the benefits beneficiaries receive.

Identify theft

The new Medicare card initiative was brought upon by requirements contained in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (P.L. 114-10). The initiative is important in light of the increase in the occurrence of identity theft. Between 2012 and 2014, identify thefts among individuals 65 and older increased from 2.1 million to 2.6 million. According to CMS, two-thirds of identity theft victims report a direct financial loss.

Adoption of annual wellness visits increasing at a moderate rate

Trends in annual wellness visits (AMV) indicate a modest increase in the percentage of Medicare beneficiaries receiving an AWV from 7.5 percent in 2011 to 15.6 percent in 2014, according to a study of the trends related to annual wellness visits (AWV) published in the Journal of the American Medical Association (JAMA) on April 19, 2017. The study found that “adoption of AWV was concentrated in ACOs [accountable care organizations] and among certain PCPs [primary care physicians] and regions of the country.”

Addition of the AMV to Medicare benefits

The AMV was added to Medicare benefits by section 4103 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) as part of its preventive care measures for Medicare beneficiaries. Medicare pays for 100 percent of the visit. The AWV became effective in January 1, 2011. According to the study, the AWV “has been promoted as a way for physicians and other clinicians to encourage evidence-based preventive care and mitigate health risks in aging patients.”

Study findings

Among the results of the study are the following findings: (1) white individuals, urban residents, and those from higher income areas and with one or two comorbidities were more likely to obtain an AWV; (2) beneficiaries that received an AWV in previous years were more likely to receive an AWV; (3) 44.4 percent of all AMVs had a concurrent problem-based visit; (4) most AMVs were performed by primary care physicians; and (5) physician practice groups or regions using more AWVs did not deliver more health care overall. The researchers also noted that beneficiaries reported unexpected out-of-pocket costs when AWVs are billed concurrently billed with problem-based visits.

The study conclusions

The study concluded that the decision to perform an AWV was primarily driven by practice factors and noted that this conclusion aligned with reports of physicians and health systems having incorporated templates, workflows, or dedicated nonphysician health care professionals to complete, document, and bill for AWVs. According to the researchers, the study had limitations, including: (1) whether AWVs increase the use of preventive care or mitigate health risks, (2) claims data could not show how often AWVs were performed by nonphysicians under physician supervision, and (3) the extent to which AWVs represent delivery of additional visits versus substitution for other visits..

KFF offers facts about Medicare spending

As the new Administration and Congress consider changes to federal health care programs, including Medicare, a Kaiser Family Foundation (KFF) issue brief offers spending facts about the program, which currently accounts for roughly $1 of every $7 in federal spending. The brief indicated that repealing the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) would increase spending and worsen the program’s long-term financial outlook, but noted that Medicare faces challenges apart from ACA repeal, including higher health costs and an aging population.

Although the program faces financial challenges, KFF noted that Medicare “isn’t going broke.” The Hospital Insurance Trust Fund, which pays for Part A benefits, primarily through payroll taxes, is expected to pay for full insurance benefits until 2028, at which point it will be able to pay for 87 percent of hospital benefits. Part B physician services and Part D drug benefits, however, are paid for through a combination of general revenues and beneficiary premiums and are set only a year in advance. As a result, they are not subject to a funding shortfall, but higher projected spending would increase the amount of general revenue funding and beneficiary premiums required to cover costs. Spending on Part benefits is expected to rise faster than spending on benefits paid for under Parts A and B, with per-capita spending expected to rise 5.8 percent for Part D between 2015 and 2025, compared to 3.2 percent for Part A and 4.6 percent for Part B.

The aging U.S. population is resulting in higher Medicare spending. For example, the number of people over age 65 is expected to double from 2010 to 2050 from 40 million to 84 million, while the number of people over 80—who account for a disproportionate share of Medicare spending—is expected to nearly triple, from 11 million to 31 million. Medicare spending accounted for 15 percent of the federal budget in 2016, and is expected to increase to 18 percent of the federal budget, accounting for $1 in every $6 spent, by 2027. Average annual growth in spending is expected to increase more quickly between 2015 and 2025—at a rate of 7.1 percent—than it did immediately after the ACA was enacted between 2010 and 2015, when it increased at a rate of only 4.4 percent.

ACA provisions reducing payments to providers and Medicare Advantage (Part C) plans reduced overall spending growth from 9 percent between 2000 and 2010 to 4.4 percent between 2010 and 2015. KFF cited a Congressional Budget Office (CBO) report and stated that ACA repeal would add $802 billion to Medicare spending through 2025; KFF opined that repeal would lead to higher deductibles, premiums, and cost sharing for beneficiaries and would hasten the insolvency of the Hospital Insurance Trust Fund (see Repealing the Affordable Care Act—an unaffordable idea?, Health Law Daily, June 24, 2015). With the ACA in place, KFF reports that net Medicare spending is projected to grow from 3.2 percent of the gross domestic product (GDP) in 2016 to 5.7 percent of the GDP in 2046; prior to the ACA, net Medicare spending was projected to account for 8.5 percent of the GDP in 2046.