By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law
More than 100 doctors, nurses and other licensed health professionals were arrested for alleged involvement in Medicare fraud on May 2, 2012. The arrests were made by federal agents in seven cities nationwide, but more than half took place in South Florida.
This multi-agency attack on medical professionals involved law enforcement agents from the Federal Bureau of Investigation (FBI), Department of Health and Human Services-Office of Inspector General (HHS-OIG), Medicaid Fraud Control Units (MFCU) and other state and local law enforcement agencies. In addition to arresting over 100 health professionals, these agents also executed 20 search warrants in connection with ongoing Medicare fraud investigations.
Some of the charges against the medical professionals include conspiracy to commit health care fraud, health care fraud, violations of the anti-kickback statutes and money laundering. The charges are based on a variety of alleged Medicare fraud schemes involving medical treatments and services such as home health care, mental health services, physical and occupational therapy, durable medical equipment (DME), mental health counseling and ambulance services. These alleged Medicare fraud schemes resulted in a combined $452 million in false billings.
HHS also took other administrative action against 52 other health providers. These providers were tracked down through data analysis and are also accused of Medicare fraud. Because of the Affordable Care Act, HHS will be able to suspend payments to these providers the entire time until the investigations are completed.
Because of the severe state budget shortfalls and the federal deficit, we are seeing a tremendous increase in both Medicare and Medicaid fraud initiatives. If you are being accused of Medicare or Medicaid fraud, it is extremely important to retain an experienced health attorney immediately.
Don't Wait; Consult with a Health Law Attorney Experienced in Medicare and Medicaid Issues Now
The Health Law Firm's attorneys routinely represent physicians and other healthcare professionals in Medicare and Medicaid investigations, audits and recovery actions. They also represent physicians and health professionals in actions initiated by the Medicaid Fraud Control Units (MFCUs), in False Claims Act cases, in actions initiated by the state to exclude or terminate from the Medicaid Program or by the HHS OIG to exclude from the Medicare Program.
Call now at (407) 331-6620 or (850) 439-1001 or visit our website http://www.thehealthlawfirm.com/.
Sources Include:
Weaver, Jay. "Feds Arrest More Than 100 Medicare Fraud Suspects in South Florida, Nationwide." Miami Herald. (May 02, 2012). From
http://www.miamiherald.com/2012/05/02/2779369/feds-arrest-about-100-medicare.html
U.S. Department of Justice, Office of Public Affairs. "Medicare Fraud Strike Force Charges 107 Individuals for Approximately $452 Million in False Billing." U.S. Department of Justice. Press Release. (May 02, 2012). From http://www.justice.gov/opa/pr/2012/May/12-ag-568.html
About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. http://www.thehealthlawfirm.com/ The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.
Showing posts with label anti-kickback. Show all posts
Showing posts with label anti-kickback. Show all posts
Monday, May 7, 2012
Friday, April 13, 2012
Medicare Prohibits Waiver of Co-pays and Deductibles; Professional Courtesy Deemed 'Unlawful'
The heavily regulated health care environment of today makes it difficult to practice the time-honored tradition of professional courtesy. Professional courtesy originally referred to the provision of health care to physician colleagues or their families free of charge or at a reduced rate. Many argue, rightfully so, that the Hippocratic Oath even requires this for the patient who is a physician and his or her family. More recently the scope of professional courtesy has been extended to include patients who may face financial hardship, and physicians commonly forgive or waive co-payments to facilitate patient access to necessary medical care.
Because of the government's aggressive approach to ensure that all claims are billed correctly, the once common practice of professional courtesy is now considered illegal. According to the Department of Health and Human Services (HHS), Office of Inspector General (OIG), "It is unlawful to routinely waive co-payments, deductibles, coinsurances or other patient responsibility payments." (67 Fed. Reg. 72,896 (Dec. 9, 2002)). This applies to health care and services paid by Medicare, TRICARE/CHAMPUS, and any other program paid partially or in full with federal funds. It also includes professional courtesy, as well as "take what insurance pays" (TWIP) policies.
Although we know of no prior instance of the OIG or Department of Justice prosecuting a physician’s extension of professional courtesy, arrangements for free or discounted care implicate fraud and abuse laws, including the Federal False Claims Act, and the Federal Anti-Kickback Statute. There have also been private insurance fraud actions based on illegally waiving co-pays and providing discounts that were not extended to the insurer, as well as Federal actions for these violations and using waivers and discounts to induce Medicare patients to use other health care services.
Physicians must be extra cautious in bestowing professional courtesy, including discounts and waivers, so that they are not punished for genuinely good deeds. While there may be situations where it is defensible to not charge for services to health care professionals, the physician should assure that this professional courtesy is not linked to referrals, either in reality or in appearance.
Waiving Co-Pays
Some physicians commonly reduce the cost of care for patients by waiving the co-pay. However, waiving a co-payment has been interpreted as a fraudulent misrepresentation of physician charges against all types of payers. For example, under traditional Medicare, physicians are paid eighty percent (80%) of the "allowable amount" or the "actual charge," whichever is less. In the instance where Medicare allows $100, the program pays $80 and the co-payment amount is $20. By the physician accepting "what insurance pays" as the only payment, this is viewed as the physician's having an actual charge of $80, so the resulting payment from Medicare should be only $64. Therefore, by Medicare's rules. the physician has overcharged Medicare.
Discounts
In the health care industry, a discount is a reduction in the normal charge based on a specific amount of money or a percentage of the charge. To comply with government and insurance policies, the discount must apply to the total bill, not just the part that is paid by the patient. For example, if a patient owes a 20% co-pay on a $25 charge ($5) and the physician applies a discount of $5, then the patient must pay $4 and the insurance company will pay $16.
In addition, private insurance plans and some federal programs have a "most favored nation" clause in their contracts with physicians. This entitles the plan to pay the lowest charge the physician bills to anyone. Any pattern of discounts could result in a reduction in the physician’s allowable reimbursement schedule to the discounted amount.
"Kickbacks" and Inducements to Refer Patients
The federal government and some states have specific laws governing financial transactions between health care providers, including the Medicare Fraud and Abuse laws and the Stark I and Stark II. These laws prohibit any incentives that influence physicians to refer patients. For example, a physician who only extended professional courtesy to other health care providers who referred him or her patients would violate the law.
These laws have been interpreted very broadly by the courts. Any payment or inducement that might have a tendency to affect referral decisions is prohibited, even if it has other valid purposes. Professional courtesy based on being on the same hospital staff would raise the same issues, although the link to referrals is more tenuous. Giving professional courtesy to all physicians without conditions would be more defensible, but if the government could show that a disproportionate number of physicians receiving the courtesy were also referring physicians, the court would probably rule that this was a prohibited inducement.
Penalties
In the past, if physicians violated the terms of their contracts with private insurers, the insurer could refuse to pay the claim and/or deselect the physician from the plan. The insurer could also sue the physician for fraud. However, under the Health Insurance Portability and Accountability Act of 1996 (HIPAA)\ it is now a federal crime to defraud private insurance companies. Violations can result in fines and criminal prosecution.
The federal government can also refuse to pay the claim and can ban the physician from participation in Medicare and Medicaid. In addition, when the physician files a claim for services that were provided in ways that violate the federal regulations, that claim violates the False Claims Act (FCA). Violations of the FCA are punishable by a $5000 per claim fine and imprisonment.
For more information on waiving co-pays and deductibles, health care discounts, professional courtesy and other billing issues, please visit our website at www.TheHealthLawFirm.com.
Because of the government's aggressive approach to ensure that all claims are billed correctly, the once common practice of professional courtesy is now considered illegal. According to the Department of Health and Human Services (HHS), Office of Inspector General (OIG), "It is unlawful to routinely waive co-payments, deductibles, coinsurances or other patient responsibility payments." (67 Fed. Reg. 72,896 (Dec. 9, 2002)). This applies to health care and services paid by Medicare, TRICARE/CHAMPUS, and any other program paid partially or in full with federal funds. It also includes professional courtesy, as well as "take what insurance pays" (TWIP) policies.
Although we know of no prior instance of the OIG or Department of Justice prosecuting a physician’s extension of professional courtesy, arrangements for free or discounted care implicate fraud and abuse laws, including the Federal False Claims Act, and the Federal Anti-Kickback Statute. There have also been private insurance fraud actions based on illegally waiving co-pays and providing discounts that were not extended to the insurer, as well as Federal actions for these violations and using waivers and discounts to induce Medicare patients to use other health care services.
Physicians must be extra cautious in bestowing professional courtesy, including discounts and waivers, so that they are not punished for genuinely good deeds. While there may be situations where it is defensible to not charge for services to health care professionals, the physician should assure that this professional courtesy is not linked to referrals, either in reality or in appearance.
Waiving Co-Pays
Some physicians commonly reduce the cost of care for patients by waiving the co-pay. However, waiving a co-payment has been interpreted as a fraudulent misrepresentation of physician charges against all types of payers. For example, under traditional Medicare, physicians are paid eighty percent (80%) of the "allowable amount" or the "actual charge," whichever is less. In the instance where Medicare allows $100, the program pays $80 and the co-payment amount is $20. By the physician accepting "what insurance pays" as the only payment, this is viewed as the physician's having an actual charge of $80, so the resulting payment from Medicare should be only $64. Therefore, by Medicare's rules. the physician has overcharged Medicare.
Discounts
In the health care industry, a discount is a reduction in the normal charge based on a specific amount of money or a percentage of the charge. To comply with government and insurance policies, the discount must apply to the total bill, not just the part that is paid by the patient. For example, if a patient owes a 20% co-pay on a $25 charge ($5) and the physician applies a discount of $5, then the patient must pay $4 and the insurance company will pay $16.
In addition, private insurance plans and some federal programs have a "most favored nation" clause in their contracts with physicians. This entitles the plan to pay the lowest charge the physician bills to anyone. Any pattern of discounts could result in a reduction in the physician’s allowable reimbursement schedule to the discounted amount.
"Kickbacks" and Inducements to Refer Patients
The federal government and some states have specific laws governing financial transactions between health care providers, including the Medicare Fraud and Abuse laws and the Stark I and Stark II. These laws prohibit any incentives that influence physicians to refer patients. For example, a physician who only extended professional courtesy to other health care providers who referred him or her patients would violate the law.
These laws have been interpreted very broadly by the courts. Any payment or inducement that might have a tendency to affect referral decisions is prohibited, even if it has other valid purposes. Professional courtesy based on being on the same hospital staff would raise the same issues, although the link to referrals is more tenuous. Giving professional courtesy to all physicians without conditions would be more defensible, but if the government could show that a disproportionate number of physicians receiving the courtesy were also referring physicians, the court would probably rule that this was a prohibited inducement.
Penalties
In the past, if physicians violated the terms of their contracts with private insurers, the insurer could refuse to pay the claim and/or deselect the physician from the plan. The insurer could also sue the physician for fraud. However, under the Health Insurance Portability and Accountability Act of 1996 (HIPAA)\ it is now a federal crime to defraud private insurance companies. Violations can result in fines and criminal prosecution.
The federal government can also refuse to pay the claim and can ban the physician from participation in Medicare and Medicaid. In addition, when the physician files a claim for services that were provided in ways that violate the federal regulations, that claim violates the False Claims Act (FCA). Violations of the FCA are punishable by a $5000 per claim fine and imprisonment.
For more information on waiving co-pays and deductibles, health care discounts, professional courtesy and other billing issues, please visit our website at www.TheHealthLawFirm.com.
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