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Originally posted on: DOJ


Federal Law Enforcement Action Involving Fraudulent Genetic Testing Results in Charges Against 35 Individuals Responsible for Over $2.1 Billion in Losses in One of the Largest Health Care Fraud Schemes Ever Charged


Elderly Patients Nationwide Lured into Criminal Scheme; Centers for Program Integrity & Medicare Services Takes Administrative Action against Providers that Submitted Over $1.7 Billion in Claims


A federal law enforcement action involving fraudulent genetic cancer testing has resulted  in charges in five federal districts against 35 defendants associated with dozens of telemedicine companies and cancer genetic testing laboratories (CGx) for their alleged participation in one of the largest health care fraud schemes ever charged. According to the charges, these defendants fraudulently billed Medicare more than $2.1 billion for these CGx tests.  Among those charged today are 10 medical professionals, including nine doctors.


The Department of Justice, Criminal Division, together with the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) and FBI spearheaded today’s landmark investigation  and prosecution that resulted in charges against CEOs, CFOs and others.

In addition, the Centers for Medicare & Medicaid Services, Center for Program Integrity (CMS/CPI), announced today that it took adverse administrative action against cancer genetic  testing companies and medical professionals who submitted more than $1.7 billion in claims to the Medicare program.


Today’s announcement is a culmination of coordinated law enforcement activities over the past month that were led by the Criminal Division’s Health Care Fraud Unit, resulting in charges against over 380 individuals who allegedly billed federal health care programs for more than $3 billion and allegedly prescribed/dispensed approximately 50 million controlled substance pills in Houston, across Texas, the West Coast, the Gulf Coast, the Northeast, Florida and Georgia, and the Midwest.  These include charges against 105 defendants for opioid-related offenses, and charges against 178 medical professionals. 


Today’s enforcement actions were led and coordinated by the Health Care Fraud Unit of the Criminal Division’s Fraud Section in conjunction with its Medicare Fraud Strike Force (MFSF), as well as the U.S. Attorney’s Offices for the Southern District of Florida, Middle District of Florida, Southern District of Georgia, Eastern District of Louisiana, and Middle District of Louisiana.  The MFSF is a partnership among the Criminal Division, U.S. Attorney’s Offices, the FBI, DEA and HHS-OIG.  In addition, the operation included the participation of various other federal, state and local law enforcement agencies, including the Louisiana Medicaid Fraud Control Unit.


The coordinated federal investigation targeted an alleged scheme involving the payment of illegal kickbacks and bribes by CGx laboratories in exchange for the referral of Medicare beneficiaries by medical professionals working with fraudulent telemedicine companies for expensive cancer genetic tests that were medically unnecessary.


Often, the test results were not provided to the beneficiaries or were worthless to their actual doctors.  Some of the defendants allegedly controlled a telemarketing network that lured hundreds of thousands of elderly and/or disabled patients into a criminal scheme that affected victims nationwide.  The defendants allegedly paid doctors to prescribe CGx testing, either without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen. 


“These defendants allegedly duped Medicare beneficiaries into signing up for unnecessary genetic tests, costing Medicare billions of dollars,” Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “Together with our law enforcement partners, the Department will continue to protect the public fisc and prosecute those who steal our taxpayer dollars.”


“The scope and sophistication of the health care fraud detected in Operation Double Helix and the related Operation Brace Yourself is nearly unprecedented.  But the citizens of the Southern District of Georgia should know that we put together an unprecedented response,” said U.S. Attorney Bobby L. Christine of the Southern District of Georgia.  “Our office charged more defendants, responsible for more health care fraud losses, than ever before in this office’s history. While these charges might be some of the first, they won’t be the last.” 


“The defendants allegedly targeted elderly, disabled and other vulnerable consumers, luring them into this fraudulent scheme that affected victims nationwide and generated losses in excess of one billion dollars which spanned multiple jurisdictions,”  said U.S. Attorney Peter G. Strasser for the Eastern District of Louisiana.  “Schemes such as these have a profound effect on our nation, not only by the monies lost in the scheme, but also by stoking public distrust in some medical institutions.  It is imperative to preserve taxpayer confidence whenever and wherever possible.  Our office, along with our investigative partners, reminds seniors and their caregivers to be vigilant for fraudulent schemes.  If you are aware of or believe you are the victim of a health care fraud scheme, please contact law enforcement.”


“The defendants are alleged to have capitalized on the fears of elderly Americans in order to induce them to sign up for unnecessary or non-existent cancer screening tests,” said U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida.   “The genetic testing fraud schemes put personal greed above the preservation of the American health care system.  The U.S. Attorney’s Office in South Florida, alongside our law enforcement and USAO partners, remains committed to protecting taxpayer dollars and the Medicare program from abuse.”

“We are honored to work every day alongside our law enforcement partners to stop the exploitation of vulnerable patients and misuse of taxpayer dollars,” said CMS Administrator Seema Verma. “In order to prevent additional financial losses, CMS has taken swift action to protect the Medicare Trust Funds from the providers who allegedly have fraudulently billed over $1.7 billion. CMS continues to use a comprehensive and aggressive program integrity approach that includes fraud prevention, claims review, beneficiary education, and targeting high-risk areas of the federal healthcare programs with new tools and innovative demonstrations.”   

“Healthcare fraud and related illegal kickbacks and bribes impact the entire nation," said Assistant Director Terry Wade of the FBI’s Criminal Investigative Division.  “Fraudulently using genetic testing laboratories for unnecessary tests erodes the confidence of patients and costs taxpayers millions of dollars.  These investigations revealed some medical professionals placing their greed before the needs of the patients and communities they serve.  Today's law enforcement actions reinforce that the FBI, along with its partners, will continue to pursue and stop this type of illegal activity.”


“Unfortunately, audacious schemes such as those alleged in the indictments are pervasive and exploit the promise of new medical technologies such as genetic testing and telemedicine for financial gain, not patient care,” said Deputy Inspector General for Investigations Gary L. Cantrell of HHS-OIG.  “Instead of receiving quality care, Medicare beneficiaries may be victimized in the form of scare tactics, identity theft, and in some cases, left to pay out of pocket.  We will continue working with our law enforcement partners to investigate those who steal from federal healthcare programs and protect the millions of Americans who rely on them.”


In the Southern District of Florida, the following defendants were charged: 

Richard Garipoli, 42, of Loxahatchee, Florida, the owner of a telemedicine company Lotus Health LLC (Lotus Health), located in Loxahatchee, is charged with conspiracy to commit health care fraud, conspiracy to pay and receive kickbacks, and substantive counts of health care fraud and receiving kickbacks.  The indictment charges that from January 2017 through September 2019, Garipoli, and unnamed co-conspirators, billed Medicare and Medicare Advantage plans over $326 million, for which Medicare paid over $84 million, for false and fraudulent Cancer Genomic tests (CGx Tests) that were not medically necessary, and not eligible for Medicare reimbursement.  Doctors contracted with Lotus Health allegedly authorized bogus doctors’ orders that the CGx Tests were medically necessary when the doctors did not engage in treatment of the beneficiaries, had no physician-patient relationship with them, and often did not even speak with the beneficiaries for whom they ordered tests.  The Indictment alleges that various companies paid kickbacks to Lotus Health in exchange for ordering and arranging for the ordering of CGx tests for Medicare beneficiaries, without regard to whether the CGx tests were medically necessary or eligible for Medicare reimbursement, and without regard for the fact that the tests were prescribed without any physician-patient relationship.  Various laboratories including Clio Laboratories in Lawrenceville, Georgia and LabSolutions in Atlanta, Georgia and Easton, Pennsylvania then allegedly submitted false and fraudulent claims to Medicare and Medicare Advantage plans for the false and fraudulent CGx tests that were not medically necessary and not eligible for Medicare reimbursement.  Garipoli and others allegedly concealed the submission of these false and fraudulent claims to Medicare and Medicare Advantage plans; and diverted fraud proceeds for their personal use and benefit, the use and benefit of others and to further the fraud.  The case is being prosecuted by Trial Attorneys James Hayes and Tim Loper of the Criminal Division’s Fraud Section


Jamie Simmons, 62, a resident of South Carolina, and the owner of telemedicine companies MedSymphony LLC (MedSymphony) and Meetmydocc LLC (Meetmydoc) in Ft. Lauderdale Florida, is charged with conspiracy to commit health care fraud, conspiracy to pay and receive kickbacks, and substantive counts of health care fraud and receiving kickbacks.  The indictment alleges that from January 2018 through September 2019, Simmons, and unnamed co-conspirators, billed Medicare and Medicare Advantage plans over $56 million, for which Medicare paid over $17 million, for false and fraudulent Cancer Genomic tests (CGx Tests) that were not medically necessary, and not eligible for Medicare reimbursement.  Doctors contracted with MedSymphony authorized bogus doctors’ orders that the CGx Tests were medically necessary when the doctors did not engage in treatment of the beneficiaries, had no physician-patient relationship with them, and often did not even speak with the beneficiaries for whom they ordered tests.  The Indictment alleges that various companies paid kickbacks to MedSymphony through Meetmydoc in exchange for ordering and arranging for the ordering of CGx tests for Medicare beneficiaries, without regard to whether the CGx tests were medically necessary or eligible for Medicare reimbursement, and without regard for the fact that the tests were prescribed without any physician-patient relationship.  Various laboratories then submitted false and fraudulent claims to Medicare and Medicare Advantage plans for the false and fraudulent CGx tests that were not medically necessary and not eligible for Medicare reimbursement.  Simmons and others allegedly concealed the submission of these false and fraudulent claims to Medicare and Medicare Advantage plans; and diverted fraud proceeds for their personal use and benefit, the use and benefit of others and to further the fraud.  The case is being prosecuted by Trial Attorneys James Hayes and Tim Loper.


Minal Patel, 40, of Atlanta, Georgia was charged based on his role in an alleged scheme to solicit medically unnecessary CGx tests from Medicare beneficiaries through telemarketing and “health fairs.”  The tests were then approved by telemedicine doctors who allegedly did not engage in treatment of the beneficiaries, and often did not even speak with the beneficiaries for whom they ordered tests.  Patel, the owner of LabSolutions in Georgia and Pennsylvania, then paid the telemarketers illegal kickbacks and bribes in exchange for the doctor’s orders and medically unnecessary tests.  LabSolutions billed Medicare for more than $494 million.  In addition, the government seized approximately $30 million in bank accounts from Patel, as well as luxury vehicles, including a Ferrari and a Range Rover.  The case is being prosecuted by Trial Attorneys Tim Loper and James Hayes.


In the Eastern District of Louisiana, the following defendant was charged:

Khalid Satary, 47, of Suwanee, Georgia was charged based on his role in an alleged scheme to solicit medically unnecessary cancer genetic (CGx) tests from Medicare beneficiaries through telemarketing and “health fairs.”  The tests were then approved by telemedicine doctors who did not engage in treatment of the beneficiaries, and often did not even speak with the beneficiaries for whom they ordered tests.  Satary, the owner of several labs in Georgia, Oklahoma and Louisiana, and his co-conspirators, through companies they controlled, then paid the telemarketers illegal kickbacks and bribes in exchange for the doctor’s orders and medically unnecessary tests.  The labs included Performance Laboratories in Oklahoma, Lazarus Services in Louisiana, and Clio Labs in Georgia.  Performance Labs, Clio Labs and Lazarus Services collectively billed Medicare for more than $547 million.  In addition, the government  seized 16 bank accounts and restrained real estate from Satary.  The case is being prosecuted by Trial Attorneys Timothy Loper and Jared Hasten.


In the Southern District of Georgia, 19 defendants were charged:

Anthony T. Securo, 56, of Columbus, Georgia, was indicted by a federal grand jury in Savannah, Georgia, for his role in a scheme to bill Medicare and other health benefit programs for medically unnecessary durable medical equipment. According to the indictment, Securo, a medical doctor, signed thousands of orders for durable medical equipment for Medicare beneficiaries he claimed to be “treating,” but in fact never even met. These thousands of items were billed to Medicare for more than $23 million. According to the indictment, Securo ordered these medically unnecessary items after having short telephone conversations with the patients, but then signed medical records stating that Securo had performed examinations or physical tests of the patients that were never actually performed.


In addition, 18 other defendants were charged in the Southern District of Georgia by way of criminal information.  The 18 other defendants include two “telemedicine” physician recruiters, seven physicians, two nurse practitioners, two individuals who brokered the sale of physician orders, one company that brokered the sale of physician orders, and four durable medical equipment companies.  In total, the 19 defendants charged in the Southern District of Georgia were responsible for over $400 million in genetic testing, durable medical equipment, and pain cream billing to Medicare, according to court documents. The cases are being prosecuted by Assistant U.S. Attorneys J. Thomas Clarkson Jonathan A. Porter of the Southern District of Georgia


In the Northern District of Texas, the following defendant was charged:  

Daniel R. Canchola, M.D., 49, Flower Mound Texas, a physician, was charged for his alleged referral of Medicare beneficiaries for medically unnecessary “cancer screening,” or “CGx,” genetic tests.  Canchola received illegal kickbacks and bribes for the CGx orders he signed, and he did so without examining or speaking to patients and in the absence of any physician-patient relationship.  Oftentimes the beneficiaries for whom Canchola ordered CGx tests never received their test results.  From in or about January 2018 through in or about March 2019, Canchola caused the submission of over $69 million in false and fraudulent claims to Medicare.  The case is being prosecuted by Trial Attorney Brynn Schiess of the Fraud Section.


Sekhar Rao, M.D., 48 of Austin, Texas, and Vinay Parameswara, M.D., 46, of Austin, Texas, were charged for their role in alleged referrals of TRICARE beneficiaries for medically unnecessary “cancer screening” genetic tests and toxicology tests.  Rao and Parameswara did not examine or speak with the beneficiaries they signed testing orders for and there was no physician-patient relationship between the physicians and these beneficiaries.  Tests were repeated many times and beneficiaries often did not receive the results of their tests. From in or about May 2014 and until in or about June 2016, Rao, Parameswara and others caused the submission of over $36 million in false and fraudulent claims to TRICARE. The case is being prosecuted by Assistant Chief Adrienne Frazior of the Fraud Section.


In the Middle District of Florida, the following defendant was charged:

Ivan Andre Scott, 34, Kissimmee, Florida, a marketer, was charged for his role in an alleged $2.8 million scheme to provide Medicare beneficiary information to doctors and telemedicine companies, that could then be billed for medically unnecessary genetic testing.  The case is being prosecuted by Trial Attorney Alejandro J. Salicrup of the Fraud Section.

In the Middle District of Louisiana, the following defendants were charged:

Mark Allen, 51, of Greer, South Carolina, and Kevin Hanley, 42, of Prairieville, Louisiana, were charged for their roles in an alleged scheme to solicit medically unnecessary cancer genetic (CGx) tests from Medicare beneficiaries, have the tests approved by telemedicine doctors who did not engage in treatment of the beneficiaries, and submit claims through clinical testing laboratories that paid kickbacks in exchange for the referrals.  Allen and his co-conspirators, through companies they controlled, solicited the tests and arranged for approvals by telemedicine providers.  They then transmitted the test samples and orders to labs in Louisiana, including Acadian Diagnostic Laboratories LLC, where Hanley was the CFO, and elsewhere.  Acadian, through Hanley and others, paid kickbacks to companies controlled by Allen and others to obtain the referrals, and submitted claims to Medicare for the tests.  Acadian and other labs billed Medicare for more than $240 million.  The case is being prosecuted by Trial Attorneys Tim Loper, Justin Woodard and Gary Winters of the Fraud Section and Assistant U.S. Attorney Kristen Craig of the Middle District of Louisiana.


In addition, as part of the Northeast Regional Takedown announced on Sept. 26, the District of New Jersey announced charges against the following:

Matthew S. Ellis, MD, 53, of Gainesville, Florida; Edward B. Kostishion, 59, of Lakeland, Florida; Kyle D. Mclean, 36, of Arlington Heights, Illinois; Kacey C. Plaisance, 38, of Altamonte Springs, Florida; Jeremy Richey, 39, of Mars, Pennsylvania; and Jeffrey Tamulski, 46, of Tampa, Florida. Kostishion, Plaisance, and Richey operated Ark Laboratory Network LLC (Ark), a company that purported to operate a network of laboratories that facilitated genetic testing.  Ark partnered with Privy Health, Inc., a company that McLean operated, and another company to acquire DNA samples and Medicare information from hundreds of patients through various methods, including offering $75 gift cards to patients, all without the involvement of a treating health care professional.  Ellis, a physician based in Gainesville, served as the ordering physician who authorized genetic testing for hundreds of patients across the country that he never saw, examined, or treated.  These included patients from New Jersey and various other states where Ellis was not licensed to practice medicine.  Through this process, Ellis, Kostishion, Plaisance, and McLean submitted and caused to be submitted fraudulent orders for genetic tests to numerous clinical laboratories.  These orders falsely certified that Ellis was the patients’ treating physician and, in many cases, contained false information indicating that a patient had a personal or family history of cancer, when, in fact, the patient had no cancer history whatsoever.  In 2018 alone, Medicare paid clinical laboratories at least approximately $4.6 million for genetic tests that Ellis ordered in this manner.  In addition, Kostishion, Plaisance, Richey, and Tamulski entered into kickback agreements with certain clinical laboratories under which the laboratories would pay Ark a bribe in exchange for delivering DNA samples and orders for genetic tests.  The bribe payments were based on the percentage of Medicare revenue that the laboratories received in connection with the tests.  Among other things, Kostishion, Plaisance, Richey, and Tamulski concealed these kickback arrangements through issuing sham invoices to laboratories that purportedly reflected services provided at an hourly rate even though the parties had already agreed upon the bribe amount, which was based on the revenue the laboratories received.  In 2018, the clinical laboratories paid Ark at least approximately $1.8 million in bribes.  The case is being prosecuted by Assistant U.S. Attorney Bernard Cooney of the District of New Jersey.

A complaint, information or indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.


The Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $16 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

#Walmart #Healthcare #GameChanger #MedicalCoding #MedicalBilling #Revenue #Compliance


Analysis: Why Walmart should be on your list of disrupters

Sep 13, 2019

By Chad Mulvany, FHFMA


Walmart next month will open a Walmart Health center in its Dallas, Georgia store, a company spokesperson said in a Retail Dive article. If Walmart isn’t on your list of disrupters with Optum/United Healthcare, CVS/Aetna and Humana/Kindred, it should be. Walmart, with more than 5,000 stores in the U.S., has explored purchasing a major health plan which suggests it sees opportunity in managing the total cost of care.


Retail Dive on Aug. 30 reported, Walmart next month will open a Walmart Health center in its store in Dallas, Georgia, a company spokesperson confirmed in an e-mail to Retail Dive.

"Walmart is committed to making healthcare more affordable and accessible for customers in the communities we serve," the spokesperson said in the Retail Dive article.


"The new Walmart Health center in our Dallas, Georgia, store will provide low, transparent pricing for key health services for local customers,” continues the article. “We look forward to sharing more details when the facility opens next month."


Retail Dive went on to say: “Walmart already runs healthcare clinics in several stores in some Southern states. But the new Georgia location, which is taking appointments starting Sept. 13, will add services like dental, mental health counseling, X-rays and audiology, according to a report from CNBC.”


Takeaway

If Walmart isn’t on your list of disrupters with Optum/United Healthcare, CVS/Aetna and Humana/Kindred, it should be. They are one of the more aggressive employers in terms of adopting value-based payment strategies. (Read my May 15 blog  “Walmart’s provider partnerships address cost reduction, patient experience and outcomes.”)  


So, if they expand to the store-clinic concept, it could further their efforts to reduce the total cost of care for their 1.5 million employees by reducing unnecessary referrals and helping manage chronic diseases.


But the real play here is Medicare Advantage (MA). MA penetration is less than 20% in 60% of rural counties versus. 32% of metropolitan counties. Approximately a year ago, there were rumors that Walmart and Humana were in merger discussions.


Walmart’s rural presence has advantages

Walmart has a strong presence in rural areas which would allow any com

bined organization to grow market share. And their more than 5,000 U.S. stores could become a hub to effectively manage chronic disease, which is more prevalent in rural areas, generating profitable membership growth.

Beyond the opportunity to profit if they can effectively manage MA lives, creating telehealth and in-store offerings will help make the Walmart brand stickier, reducing the risk that Amazon will take market share from their consumer goods and consumables lines of business.  


Chad Mulvany, FHFMA

is director, healthcare finance policy, strategy and development, HFMA’s Washington, D.C., office.


Updated: Sep 30, 2019

#MedicalCoding #MedicalBilling #Compliance #FCA #MedicalNecessity


Originally posted on https://www.doctors-management.com/medical-necessity-fca/


Medical Necessity and The False Claims Act


“How Having an Effective Policy May Mitigate Damages”


by Sean Weiss, Partner & VP of Compliance


Since we are now approaching the end of September and only have 3 months left in 2019, I thought this would be a great time for those groups beginning their 2020 planning during Q4 to address the importance of making compliance the center of all things in your organization in the coming year. To do this, we have to define what health care compliance is, which is to say it’s the process of following rules, regulations, and laws that relate to health care practices/organizations. When I hear others speak about compliance programs and how important they are, I can’t help but to agree. However, the lines often get blurred when folks try to blend the plan and policies together. In my opinion, the actual plan is what it is and for the most part, remains stagnant unless things change significantly (you still need to review it annually at a minimum). The fluid and, in my opinion, the most critical part of the compliance program are the policies and how they are implemented, followed and remedial steps taken when a policy is violated or not followed to the degree it is supposed to be. As I wrote last week in my blog about non-retaliation and provided you with a sample policy, this week I am writing about Medical Necessity and the importance of this policy and how failure to establish medical necessity potentially impacts The False Claims Act.


With so many things to consider regarding why compliance needs to be established as a culture within an organization, and before I get to The False Claims Act and Medical Necessity portion of this post, I’ll begin my discussion surrounding the critical nature of compliance programs and demonstration of an actual culture within the organization of compliance. I’ll do this by addressing the original Filip Memo which was part of the United States Attorney’s Manual (USAM), that became the Justice Manual on September 25, 2018, which focuses on specifically whether to criminally charge a corporation: “Generally, prosecutors apply the same factors in determining whether to charge a corporation as they do with respect to individuals. See JM 9-27.220 et seq. Thus, the prosecutor must weigh all of the factors normally considered in the sound exercise of prosecutorial judgment: the sufficiency of the evidence; the likelihood of success at trial; the probable deterrent, rehabilitative, and other consequences of conviction; and the adequacy of noncriminal approaches. See id. However, due to the nature of the corporate “person,” some additional factors are present. In conducting an investigation, determining whether to bring charges, and negotiating plea or other agreements, prosecutors should consider the following factors in reaching a decision as to the proper treatment of a corporate target:

the nature and seriousness of the offense, including the risk of harm to the public, and applicable policies and priorities, if any, governing the prosecution of corporations for particular categories of crime (see JM 9-28.400);the pervasiveness of wrongdoing within the corporation, including the complicity in, or the condoning of, the wrongdoing by corporate management (see JM 9-28.500);the corporation’s history of similar misconduct, including prior criminal, civil, and regulatory enforcement actions against it (see JM 9-28.600);the corporation’s willingness to cooperate, including as to potential wrongdoing by its agents (see JM 9-28.700);the adequacy and effectiveness of the corporation’s compliance program at the time of the offense, as well as at the time of a charging decision (see JM 9-28.800);the corporation’s timely and voluntary disclosure of wrongdoing (see JM 9-28.900);the corporation’s remedial actions, including, but not limited to, any efforts to implement an adequate and effective corporate compliance program or to improve an existing one, to replace responsible management, to discipline or terminate wrongdoers, or to pay restitution (see JM 9-28.1000);collateral consequences, including whether there is disproportionate harm to shareholders, pension holders, employees, and others not proven personally culpable, as well as impact on the public arising from the prosecution (see JM 9-28.1100);the adequacy of remedies such as civil or regulatory enforcement actions, including remedies resulting from the corporation’s cooperation with relevant government agencies (see JM 9-28.1200); andthe adequacy of the prosecution of individuals responsible for the corporation’s malfeasance (see JM 9-28.1300).”


* “The factors listed in this section are intended to be illustrative of those that should be evaluated and are not an exhaustive list of potentially relevant considerations. Some of these factors may not apply to specific cases, and in some cases one factor may override all others. For example, the nature and seriousness of the offense may be such as to warrant prosecution regardless of the other factors. In most cases, however, no single factor will be dispositive. In addition, national law enforcement policies in various enforcement areas may require that more or less weight be given to certain of these factors than to others. Of course, prosecutors must exercise their thoughtful and pragmatic judgment in applying and balancing these factors, so as to achieve a fair and just outcome and promote respect for the law.” [updated November 2018]

In the above factors, I specifically point to numbers 5 and 7 given their focus on existing compliance programs and remedial actions taken by responsible individuals. These 2-factors demonstrate the significant impact in a positive way that having a compliance plan that is a living, breathing document can have on dissuading the government seeking criminal charges.

The biggest focus right now in compliance as far as I am concerned and what I am seeing is with the billing of services (E/M and Procedures) that fail to meet the definition of “Medical Necessity” which can be alleviated by having a solid policy in place to define medical necessity as understood in the industry, as defined by Medicare and other payers, and your practice’s position on it. For the purpose of this discussion, “generally accepted standards of medical practice” means standards that are based on credible scientific evidence published in peer‐reviewed medical literature generally recognized by the relevant medical community or otherwise consistent with the standards set forth in policy issues involving clinical judgment. “Medically Necessary” or “Medical Necessity” shall mean health care services that a physician, exercising prudent clinical judgment, would provide to a patient for the purpose of preventing, evaluating, diagnosing or treating an illness, injury, disease or its symptoms, and that are: a) in accordance with generally accepted standards of medical practice; b) clinically appropriate, in terms of type, frequency, extent, site and duration, and considered effective for the patient’s illness, injury or disease; and c) not primarily for the convenience of the patient, physician or other health care provider, and not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that patient’s illness, injury or disease.”


Then there is a legal doctrine by which evidence-based clinical standards are used to determine whether a treatment or procedure is reasonable, necessary and/or appropriate and we evaluate that by looking at the Medicare program. “Medical Necessity” is defined under Title XVIII of the Social Security Act, Section 1862 (a) (1) (a): “Notwithstanding any other provision of this title, no payment may be made under part A or part B for any expenses incurred for items or services which, except for items and services described in a succeeding subparagraph, are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”


When drafting your medical necessity policy, I would make sure to address the impact it has on The False Claims Act. The False Claims Act (FCA) looks at terms such as “Knowingly”, which is the submission of false claims for the purpose of receiving an entitlement for non-covered services. Then there is the Reverse False Claims, which addresses knowing and improper avoidance of an obligation to pay monies to the U.S. Government under the Affordable Care Act which created statutory obligations to report and refund overpayments – 60-day rule/self-disclosure protocol. It is critical to understand the FCA covers potential false claims based on the conduct at the time the claims were submitted (affirmative false claims) as well as potential false claims based on later discovery and mishandling of overpayment refund obligations.


A few final points regarding The False Claims Act:


Under the FCA, a person is deemed to have acted “knowingly” when the person “acts in deliberate ignorance of the truth or falsity of the information; or acts in reckless disregard of the truth or falsity of the information.” 31 U.S.C. § 3729(b).As the Ninth Circuit has pointed out, the FCA knowledge standard does not extend to honest mistakes, but only to “lies.” “Claims are not ‘false’ under the FCA unless they are furnished in violation of some controlling rule, regulation or standard”. See, e.g., United States ex rel. Local 342 v. Caputo Co., 321 F.3d 926, 933 (9th Cir.2003); United States v. Southland Mgmt. Corp., 326 F.3d 669, 674-75 (5th Cir.2003) (“[W]hether a claim is valid depends on the contract, regulation, or statute that supposedly warrants it.It is only those claims for money or property to which a Defendant is not entitled that are ‘false’ for purposes of the False Claims Act”) (citation omitted) (en banc); United States ex rel. Hochman v. Nackman, 145 F.3d 1069, 1073-74 (9th Cir.1998) (no falsity when Defendants’ acts conformed with Veteran Administration payment guidelines); United States ex rel. Lindenthal v. Gen. Dynamics Corp., 61 F.3d 1402, 1412 (9th Cir.1995) (whistleblower’s FCA claims for payment based on work that satisfied contractual obligations “could not have been ‘false or fraudulent’ within the meaning of the [False Claims Act]”); United States ex rel. Glass v. Medtronic, Inc., 957 F.2d 605, 608 (8th Cir.1992) (a statement cannot be “false” or “fraudulent” under FCA when the statement is consistent with regulations governing program).Additionally, a Defendant does not knowingly submit false claims when he follows Government instructions regarding the claims. See United States ex rel. Butler v. Hughes Helicopters, Inc., 71 F.3d 321 (9th Cir.1995); Wang v. FMC Corp., 975 F.2d 1412, 1421 (9th Cir.1992).The last point I will emphasize regarding The False Claims Act is this; Additionally, claims are not “false” under the FCA when reasonable persons can disagree regarding whether the service was properly billed to the Government. See United States ex rel. Lamers v. City of Green Bay, 168 F.3d 1013, 1018 (7th Cir.1999) (holding that “errors based simply on faulty calculations or flawed reasoning are not false under the FCA . . . [a]nd imprecise statements or differences in interpretation growing out of a disputed legal question are similarly not false under the FCA”) (citations omitted); Hagood v. Sonoma County Water Agency, 81 F.3d 1465, 1477 (9th Cir.1996) (“How precise and how current the cost allocation needed to be in light of the [Water Supply Act’s] imprecise and discretionary language was a disputed question within the [Government]. Even viewing [plaintiff’s] evidence in the most favorable light, that evidence shows only a disputed legal issue; that is not enough to support a reasonable inference that the allocation was ‘false’ within the meaning of the False Claims Act”).


Remember that when you are drafting your policy regarding medical necessity, that it is determined based on Clinical Review Judgment, which involves two steps:

The synthesis of all submitted medical record information (e.g. progress notes, diagnostic findings, medications, nursing notes, etc.) to create a longitudinal clinical picture of the patient and,The application of this clinical picture to the review criteria is to make a reviewer determination on whether the clinical requirements in the relevant policy have been met. MAC, CERT, RAC, and ZPIC/UPIC clinical review staff shall use clinical review judgment when making medical record review determinations about a claim.


The last thing to keep in mind regarding medical necessity is that there is a clear and binding standard: The Medicare statute requires that any “rule” requirement, or other statement of policy (other than a material coverage decision) that establishes or changes a substantive legal standard” must be promulgated by regulation. 42 U.S.C § 1395hh.


One of the questions to ask regarding Medicare and medical necessity is has CMS promulgated a standard for determining whether a service is reasonable and necessary?Although the “Treating Physician Rule” has been removed from the Social Security Act, I am still hearing attorneys make arguments using it in Medicare and commercial payer cases. (United States v. Prabhu, 442 F. Supp 2d 1008 (D. Nev 2006))Keep in mind that clarity of Medical Necessity issues affect whether a claim is “False” and whether the requisite “knowledge” exists.“Claims are not ‘false’ under the FCA when reasonable persons can disagree regarding whether the service was properly billed to the Government.” Prabhu“a Defendant does not ‘knowingly’ submit a ‘false’ claim when his conduct is consistent with a reasonable interpretation of ambiguous regulatory guidance.” Prabhu

Taking the time to construct an effective and reasonable policy related to Medical Necessity will go a long way to demonstrating a culture of compliance and potentially mitigate damages during an investigation. Given the current state of affairs in D.C. and the focus shift I expect to take place based on rumblings I have heard from folks in the know, 2020 will be another year of intense focus on provider coding and documentation. And I expect nothing less from the commercial payers.


Disclaimer: This blog post is not intended to provide any legal advice, guidance or opinion. The information contained in this blog post is a non-legal interpretation of statutes, acts, laws and should not and does not substitute for the advice, guidance or opinion of legal counsel. The author bares no liability and make no warranties for the information provided if implemented as is without confirmation of its applicability by the end user.

 

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