Archives: whistleblower

You may have heard some years ago that the Affordable Care Act established a “60-day overpayment rule” that requires a provider to report and return any overpayment from a federal health care program (such as Medicare or Medicaid) within 60 days of “the date on which the overpayment was identified” by the provider (for certain institutional providers, the overpayment must be returned by the later of 60 days or the date on which a corresponding cost report is due to the applicable federal health care program).   Failure to return the overpayment within the required time period (60 days for physician practices) subjects the provider to liability under the False Claims Act and a fine of up to $11,000 per claim plus treble damages.

In an effort to clarify the rule, in 2012, CMS proposed that a provider has “identified” an overpayment when the provider has either “actual knowledge of the existence of the overpayment” or acted in “reckless disregard or deliberate ignorance of the overpayment”.  77 Fed. Reg. 9179, 9182-83.  However, CMS received so much negative feedback regarding its proposed interpretation of the rule that it decided to delay final guidance until 2016.  In the interim, the first court to review the 60-day overpayment rule has had an opportunity to give its opinion.

 

The Court’s Decision

In U.S. ex rel. Kane v. Continuum Health Partners, Inc., the U.S. Department of Justice, along with an ex-employee whistleblower, brought suit against Continuum Health Partners, Inc. on the grounds that Continuum failed to report and return over 900 Medicaid overpayments within 60 days of identification.   The government argued that Continuum “identified” the overpayments when the ex-employee (who was charged with investigating a software glitch in the billing system) emailed a spreadsheet of over 900 potential Medicaid overpayments to upper management of Continuum.   Continuum argued that it should not have been responsible to report or return the overpayments until it determined the precise amounts of the overpayments.

The Court sided with the federal government, denying Continuum’s motion to dismiss the case.  The Court held that Continuum “identified” the overpayments for purposes of the 60-day overpayment rule when Continuum was put on notice that the overpayments were likely to exist.  The Court explained that the spreadsheet provided by the whistleblower did not need to “conclusively establish each erroneous claim” and it did not need to “provide the specific amount owed” in order to put Continuum on notice of each overpayment, and thereby start the 60-day reporting clock.

 

What The Case Means for Providers

The Court’s decision in Continuum is not the last word on this issue.  The Court left open what it means to be “put on notice” that an overpayment is likely to exist.  Also, as noted, CMS may issue new guidance on the rule next year.  Nonetheless, the decision can provide useful guidance for providers who have discovered a potential overpayment and want to know how to comply with the rule.

The Court explained that a provider has a duty to investigate and report an overpayment within 60 days after the provider has been put on notice that the overpayment is likely to exist.  The Court also noted that a provider should not be liable under the False Claims Act for failing to return an overpayment within 60 days, if the provider (i) has reported the overpayment, (ii) is diligently investigating it, and (iii) does not intend to withhold repayment once the proper amount has been established.

In sum, the main message of the Court’s opinion is to Take Action and Report the Overpayment.  If you discover a potential overpayment, begin investigation in a reasonable timeframe.  If you are unable to determine whether the claim actually resulted in an overpayment within the 60-day time period, err on the side of caution by reporting and returning the potential overpayment.  If the overpayment(s) are substantial in amount, you may consider withholding repayment; however, be sure to report to CMS (or the applicable federal health program administrator) as much information regarding the claim as possible, including your intention to return each overpayment once the amount to be repaid is established.

Finally, before taking any action, be sure to consult your legal counsel regarding the best options for you and your practice.

The 7th Circuit Court of Appeals recently issued a decision of interest to physicians and teaching hospitals. It concerns the method of rotating teaching physicians between multiple surgeries and billing Medicare for those services.  

The case involves so-called "qui tam" claims (essentially, a whistleblower case) against a teaching hospital, by which a successful claimant gets to keep a portion of the penalties recovered.  Basically, the Medicare program pays teaching hospitals for work by residents that is supervised by teaching physicians.  Here, however, a hospital was alleged to have made its teaching physicians simultaneously supervise multiple surgeries — and then submit fee-for-service bills to the Medicare program for certain unsupervised work.  

 

After addressing legal issues concerning claimants’ right to sue when the facts were generally in the public domain by way of government reports (those reports were not specific to this hospital), the suit was allowed to continue for now.  

Note to physicians: The Court emphasized that a teaching hospital does nothing wrong if the teaching physicians are "immediately available" during all parts of the surgeries even if making a circuit between multiple operating theaters.  The breadth of that holding, and whether it would apply to other circumstances, is not clear.  Nevertheless, hospitals who bill Medicare for activities supervised by teaching physicians, and the physicians themselves, must pay special attention to these activities to stay within the law.

A recent whistleblower case out of the federal 3rd Circuit in Pennsylvania highlights some of the dangers in not properly documenting financial relationships between physicians and hospitals. Specifically, in US ex. rel. Kosenske v. Carlisle HMA, Inc., a Qui Tam lawsuit brought by the former member of an anesthesia group, the 3rd Circuit Court of Appeals reversed a US District Court’s summary judgment in favor of the defendant hospital and anesthesia group.

The anesthesia group in question had a written exclusive contract with the hospital for anesthesia services but, subsequent to entering into the exclusive agreement, began providing pain management services at the hospital’s freestanding pain center. The hospital did not charge the anesthesia group rent for use of the space in the pain center and the qui tam relator claimed that the arrangements failed to meet the Stark exception for personal service arrangements (and therefore that claims for services referred by the anesthesia group’s physicians to the hospital were in violation of the federal False Claim Act).

 

Continue Reading Pennsylvania Qui Tam Case Highlights Dangers in Physician/Hospital Arrangements

The federal government was apparently not kidding when it said it planned to take a closer look at physician/hospital arrangements.  According to a recent Department of Justice Press Release, the DOJ has elected to intervene in a whistle-blower lawsuit against Christ Hospital and the Ohio Heart Health Center, a large cardiology group in Ohio. The lawsuit alleges that the hospital and the cardiology group entered into an arrangement that provided the cardiologists improper financial incentives in exchange for generating revenue for the hospital through the hospital’s outpatient cardiology testing center. This suit was originally filed by a cardiologist who had provided services to Christ Hospital and Ohio Heart. The lawsuit alleges that cardiologists were allocated time at the Hospital’s heart station based on the number of cardiac services they generated for the Hospital in the prior year.

This is only one of what can expected to be a slew of these types of cases as enforcement authorities tune in to the creative ways in which hospitals and physicians have been teaming up over the last few years.  Physicians who have financial arrangements with their hospitals should take a close look at those arrangements for compliance with current regulatory requirements.