Physician Law : Pennsylvania Health Law Lawyer & Attorney : Fox Rothschild LLP : serving Philadelphia, Pittsburgh, Allentown, Erie, Upper Darby Twp

Now that the new year is upon us, today’s post will look at the Department of Health and Human Services’ Office of Inspector General (OIG), in particular, OIG’s priorities for 2013.   According to OIG’s Fiscal Year 2013 Work Plan, it will be focusing upon a number of topics of interest – including some items not addressed last year.

OIG’s planned reviews of Medicare Part A and Part B will include:

● Billing patterns for nursing home stays.

● Accreditation of medical equipment suppliers, with a particular focus on quality standards.

● Claims submitted by medical equipment suppliers for lower limb prosthetics, power mobility devices and vacuum erection systems.

● Replacement of medical equipment, especially the frequency and necessity of that replacement.

● Independent physical therapists’ claims and whether the claims are reasonable, medically necessary and properly documented.

● Billing for electrodiagnostic testing.

● Ensuring that payments are not made for alien beneficiaries who were unlawfully present in the United States.

● Reviewing payments for Part A and Part B services to avoid claims starting after a beneficiary has died. 

Special attention should be paid to these areas in the coming year given OIG's additional scrutiny.

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Recent press releases provide notice of activities that draw the government's ire -- and result in serious criminal consequences.  Focusing on these issues is a helpful exercise for any physician trying to stay within the law.  The cases include:

*    An Illinois physician ordered medically unnecessary tests for patients, used false diagnosis codes to justify the tests, and then submitted claims for government reimbursement.  The government's evidence included testimony that the defendant administered EEGs, EKGs and other tests for an unusually high number of patients, which was perhaps the trigger to a more detailed government review of his practice.  For his efforts, the defendant was given a 2-½ year prison sentence. 

*    Two Mississippi residents plead guilty to charges of billing Medicare for chemotherapy services that were never performed.  The defendants were caught when the services billed exceeded the volume of chemotherapy drugs actually purchased from suppliers, and the activities were made worse by efforts to cover up the fraud in advance of a scheduled audit.  The defendants will be sentenced in October, and face up to 20 years in prison. 

*    A 31-year old physician assistant in Texas plead guilty to his part in a scheme involving pre-signed prescriptions that the assistant then issued to patients -- without the physician having participated in the consultation or the decision to prescribe medicines.  The fraud took the form of false representations that the physician was involved because the services would have been ineligible for government reimbursement absent the doctor's involvement. The defendant faces a maximum sentence of five years in prison. 

*    A Rhode Island physician's assistant was convicted of taking kickbacks in a scheme involving payments from a medical device company in exchange for prescriptions that ordered the use of that company’s devices. This violated the Anti-Kickback Law.  He was sentenced to one year in prison, and ordered to pay a fine -- with his sentence having been upgraded because he lied to a grand jury and a government investigator.  The investigation with respect to others is ongoing.

*    A New Jersey doctor was convicted of accepting cash kickbacks in exchange for referring patients to a medical diagnostic facility, and was caught when he accepted payments from a cooperating government witness. 

*    Finally, this month's special award goes to a California physician who was sentenced to six years in prison for medical services provided by a health clinic.  Unfortunately, the clinic provided no services.   Instead, the mostly non-English speaking visitors to the clinic were paid $100 per visit for their Medicare eligibility, which the clinic then used to create false charts for tests that were never conducted -- and submitted these as claims to Medicare.  Compounding the problem, the defendant tried to flee to Canada with cash, a fake passport and a bottle of hair dye.  Needless to say, the sentencing judge did not find her sympathetic.  In fact, the judge made a point of emphasizing the defendant's exemplary education, finding a lack-of-knowledge defense ridiculous.  (Other participants in the conspiracy received extended prison time or still await sentencing). 

These cases provide lessons for practicing physicians.  First, assume the government will be reviewing records of the tests administered to patients, and ensure that all tests are medically necessary.  Next, it also may be advisable to periodically compare the quantity of drugs utilized to the services rendered to ensure that there is a reasonably relationship between the two.  Third, any offer to provide remuneration in exchange for services or referrals should be a "red flag" for fraud.  Finally, and perhaps most importantly, any activities that are handled by others should be periodically examined -- preferably without advance notice lest a criminal actor hide his/her tracks -- to make sure that others are not submitting false claims without approval.  Otherwise, you might be the next physician whose education renders a lack-of-knowledge claim incredible.

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Physicians who reassign their right to bill the Medicare program can still be liable for false claims submitted by the entities who obtained that reassignment, as discussed in a recent "Alert" issued by the Office of Inspector General (OIG). [PDF].

OIG also referenced settlements it reached with eight physicians who had reassigned their payments to physical medicine companies in exchange for Medical Directorship positions -- when those companies subsequently billed Medicare for services that the physicians had not actually performed.

This OIG Alert highlights the ability of physicians to monitor all services billed using their reassigned provider numbers, and strongly urges physicians to do so. If not, physicians face liability for false claims asserted under their provider numbers.

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We’ve known for a while now that the Medicare Recovery Audit Contractors ("RAC") program would eventually start impacting physicians and other Part B providers. That time has now come as medical practices and physicians are beginning to receive both audit and repayment letters from RACs. So, if you’re still not familiar with this aggressive audit and recovery program, you are well-advised to begin preparing for the possibility that some of your claims may be reviewed by a RAC.

The RAC program is a national effort by the Centers for Medicare & Medicaid Services ("CMS") identify and correct improper Medicare payments. The RACs (private entities under contract with CMS) cover four national regions and are paid a percentage of the amounts they recover. The RACs and their regions are:

• Diversified Collection Services, Inc. of Livermore , California , in Region A, initially working in Maine , New Hampshire , Vermont , Massachusetts , Rhode Island and New York .
• CGI Technologies and Solutions, Inc. of Fairfax, Virginia, in Region B, initially working in Michigan , Indiana and Minnesota .
• Connolly Consulting Associates, Inc. of Wilton , Connecticut , in Region C, initially working in South Carolina , Florida , Colorado and New Mexico .
• HealthDataInsights, Inc. of Las Vegas, Nevada, in Region D, initially working in Montana , Wyoming , North Dakota , South Dakota , Utah and Arizona .

RACs may identify improper payments in one of two ways: (1) automated reviews of paid claims – the RAC makes an overpayment (or underpayment) determination without requesting or review medical records; and (2) complex reviews which involve a manual review of medical records.

So what should you do if you receive a RAC repayment request or records request? First, make sure that the services in question are actually within the period subject to RAC review. Under the RAC enabling legislation, RACs may only go back three years and cannot review claims from prior to October 1, 2007.

Next, consider having your own coding expert review the services (under attorney-client privilege) to see if there’s a basis to mount an appeal. Under the RAC program, providers have a limited period of time to open an informal discussion with the RAC to raise issues with or provide additional information impacting upon the RAC determination. Providers may also appeal RAC determinations through the CMS claims appeal process. But, pay close attention to the deadlines outlined in the RAC determination letter because failing to meet the applicable appeal deadlines can cause you to lose your appeal rights.

More information about the RAC program can be found here: http://www.cms.gov/RAC/
 

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It is apparent that preventive care will take on greater importance in the "reformed " health care system and while Medicare historically did not cover routine or preventive screening services, the list of preventive services now covered by Medicare has grown in recent years.  Physicians should familiarize themselves with the applicable coverage and billing rules so as not to miss an opportunity to capture revenue for these services where appropriate.  To help physicians in this regard, CMS has published a guide to preventive and screening services for physicians and other providers.  Also, for a good overview on the OIG's current thinking on offering free screening services, physicians and other providers should have a look at the recent OIG Advisory Opinion 09-11 addressing free blood pressure screenings to walk-in visitors at a hospital.

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Does your practice bill Medicare for diagnostic tests?

If so, you have until January 1, 2009 to make sure your arrangements comply with the now very complicated anti-markup rule. The Centers for Medicare and Medicaid Services (CMS) published the Final Medicare Physician Fee Schedule for 2009 in the Federal register on November 19, 2009. Among other things addressed in the Fee Schedule regulations are clarifications of the diagnostic testing anti-markup rule.

Prior to the 2009 Fee Schedule changes, the anti-markup rule provided that if a physician or other supplier bills for the technical component (TC) or professional component (PC) of a diagnostic test that was ordered by the physician or other supplier and the diagnostic test was either purchased from an outside supplier or performed at a site other than the office of the billing physician or other supplier, the payment to the billing physician or other supplier (less the applicable deductibles and coinsurance paid by the beneficiary or on behalf of the beneficiary) for the TC or PC of the diagnostic test may not exceed the lowest of the following amounts:

• The performing supplier's net charge to the billing physician or other supplier;

• The billing physician or other supplier's actual charge; or

• The fee schedule amount for the test that would be allowed if the performing supplier billed directly.

In the 2009 Fee Schedule, CMS has now clarified that the anti-markup provisions will not apply to the TC or PC of a diagnostic test where the performing physician shares a practice with the billing physician or other supplier. With respect to a TC or PC of a diagnostic testing service, the performing physician is considered to share a practice with the billing physician or other supplier if either of the following is met:

(Alternative 1) He or she furnishes substantially all (at least 75 percent) of his or her professional services through the billing physician or other supplier; or

(Alternative 2) The TC is conducted and supervised, or the PC is performed, in the office of the billing physician or other supplier. For purposes of Alternative 2, the “office of the billing physician or other supplier” is defined as the same building where the ordering physician performs substantially the full range of patient care services that the ordering physician generally provides.
 

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