DGS Health Law Blog : Denver Health Care Lawyers & Attorneys : Davis Graham & Stubbs Law Firm : HIPAA & Patient Privacy : Colorado, Rocky Mountain West

OIG recently posted a video of its Healthcare Fraud Prevention and Enforcement Action Team ("HEAT") training in Washington, D.C. on health care compliance and fraud prevention.  The training provides guidance to health care providers, compliance officers, and their legal counsel regarding health care fraud and abuse requirements and the fundamentals of compliance programs, as well as tips on navigating CMS when facing compliance issues and the government's various health care fraud enforcement initiatives.

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As we have noted over and over again in previous posts, the federal government has significantly ramped up its Medicare fraud and abuse enforcement.  This time the crackdown on false billing schemes was staggering.  Yesterday, in the largest single-day health care fraud bust in U.S. history, the Medicare Fraud Task Force charged and arrested 111 people--including physicians, nurses, and health care company executives-who allegedly swindled the federal government out of more than $225 million.  These arrests took place in 9 major cities across the country.  More specifically, the claims against these health care professionals were for fraudulent claims for services that were never provided, kickback arrangements, money laundering, and identity theft.  More details available in the HHS/DOJ press release.

For most providers, these types of crackdowns are of little concern because they are targeting the most egregious and blatant fraud and abuse, and the overwhelming majority of providers are not involved in such schemes.  Events like this, however, should serve as a reminder to even the most cautious and upstanding providers that the federal government has become increasingly serious about health care fraud and abuse enforcement.  Between these enforcement efforts and increased auditing of providers through RAC audits, providers that remain vigilant will have a certain advantage over those that are not.

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Showing a continued resolve to combat health care fraud and abuse, the Office of Inspector General (OIG) has launched a Most Wanted Fugitives List.  In an effort to engage the public in fighting health care fraud and abuse, the list identifies more than 170 individuals alleged to have committed health care fraud-related crimes.  According to the OIG's press release, the top ten individuals on this list have cost taxpayers over $124 million.  This announcement comes on the heels of the January 24, 2011 joint announcement by the U.S. Departments of Justice and Health and Human Services that the federal government recovered more than $4 billion taxpayer dollars in fiscal year 2010 from it's health care fraud prevention and enforcement efforts.  If the OIG's plan works and the public pitches in on the enforcement front as a result of the Most Wanted Fugitives List, 2011 could be another very busy year for the federal government's health care fraud and abuse team.

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Health care fraud and abuse enforcement is always on our minds and our clients' minds, but yesterday HHS and DOJ gave health care providers even more to consider when evaluating their own fraud and abuse compliance efforts.

HHS and DOJ announced the highest annual recovery amount ever from health care providers as a result of the federal government's fraud and abuse enforcement efforts.  According to the annual Health Care Fraud and Abuse Control Program ("HCFAC") report released yesterday, the government’s health care fraud prevention and enforcement efforts recovered a staggering $4 billion from health care providers in fiscal year 2010.

This year's $4 billion recovery amount is up 50% from 2009.  To further put this $4 billion into context,  the HCFAC has returned $18 billion total to the Medicare Trust Fund since its inception in 1997.  This increased recovery is due, at least in part, to the recently employed enforcement teams such as the Health Care Fraud Prevention & Enforcement Action Team ("HEAT") and the Medicare Fraud Strike Force.  In addition to these criminal enforcement recoveries, the government also obtained more than $2.5 billion in civil health care matters brought under the False Claims Act, which is the largest in the history of the DOJ. 

HHS also announced yesterday new rules authorized by PPACA (or the Affordable Care Act) that will further intensify the government's efforts to fight fraud, waste and abuse in Medicare and Medicaid.  Not only does PPACA provide an additional $350 million for HCFAC activities, but the rules include new provider screening and enfocement measures and gives the government the authority to suspend payments to providers when credible allegations of fraud are being investigated.  These provisions--particularly the suspension of payment during investigations--are likely to have a significant impact on providers in the coming years.  These regulations take effect March 25, 2011.

Although these recovery amounts seem high compared to previous years, health care providers should expect that recoveries may increase even further in coming years with the government's sharpened focus on health care fraud and abuse.

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The Department of Health & Human Services ("HHS") Office of Inspector General ("OIG") recently reported in its Semiannual Report that for fiscal year ("FY") 2010 it expected recoveries and savings of approximately $25.9 billion, which includes $3.8 billion in investigative receivables and $1.1 billion in audit receivables.  The other $21 billion included in the total amount includes various cost-saving actions supported by OIG's recommendations in audits and evaluations.  The FY 2010 expected recoveries and savings were more than FY 2009, when OIG reported savings and expected recoveries of $21 billion.

In addition, OIG reported exclusions of 3,340 individuals and entities from participation in Medicare or other federal health care programs in the 2010 fiscal year.  OIG initiated 647 criminal lawsuits and 378 civil lawsuits against individuals and entities for violations of health care laws and regulations.

OIG focused particularly in the Semiannual Report on the successes of its Medicare Fraud Strike Force teams, which coordinate with federal, state, and local law enforcement to investigate health care fraud.  The Strike Force participated in an unprecedented takedown in seven cities that resulted in charges against 94 doctors, health care company owners, executives, and others for more than $251 million in alleged false billing.

Another highlight of fraud enforcement in FY 2010 was the $520 million that AstraZeneca agreed to pay the government to settle alleged false claims violations for kickbacks it allegedly offered to doctors in connection with unapproved uses of AstraZeneca's drug Seroquel.

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Federal prosecutors around the country have filed charges against 73 people alleging a nationwide Medicare fraud scheme that defrauded the government out of more than $35 million.  The U.S. Attorney in Manhattan has called this scheme the "single largest Medicare fraud ever perpetrated by a single criminal enterprise."  Over the last four years, this group of Armenian-Americans used stolen identities of real doctors and patients to bill Medicare for over $100 million for goods and services that were never provided and completely fabricated.  This health care fraud bust is only the latest in the government's efforts to combat abuse in federal program reimbursement.  Given the new enforcement mechanisms and funding under this year's health care reform, we are likely to see the government continue to increase its efforts to take down fraudulent health care billing schemes.

For more on these indictments, see the New York Times article and the Washington Post article on the story.

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The Connecticut Attorney General announced yesterday that the Office of the Inspector General and several states have settled with Novartis, the pharmaceutical giant, for criminal and civil claims that Novartis committed kickbacks and off-label marketing involving several of its drugs.  According to the allegations by the government, Novartis had marketed the drug Trileptal, an anti-epileptic medication, beyond its FDA-approved uses to boost sales and paid physicians compensation for prescribing the drug.

Under the settlement terms, Novartis will pay the states and the federal government a total of $237.5 million in damages and penalties for losses to state and federal health care programs, and another $185 million to resolve criminal allegations.

Novartis must also enter into a five-year Corporate Integrity Agreement with the OIG, ensuring that OIG will be monitoring Novartis' every move going forward.

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The Department of Health and Human Services (“HHS”) Office of the Inspector General (“OIG”) recently released a report presenting the results of an extensive medical record review conducted in 2006 regarding payments made to nursing facilities for Medicare Part B enteral nutrition therapy (“ENT”) claims for non-Part A patients. The study found that 21 percent of the claims were inappropriate or inadequately documented, resulting in an estimated $39 million in Part B payments that the government should not have paid. Although in the 2010 Work Plan OIG already declared its intent to focus on review of nursing homes’ Part B ENT billing, this report may result in increased scrutiny of providers’ claims and documentation.

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The OIG just issued Advisory Opinion No. 10-04 which approved a program by a group of imaging centers to provide pre-authorization services for patients and referring physicians at no charge.  This is a surprising turn from the path of prior Advisory Opinions on free services provided to physicians, where the OIG expressed major concerns about any service being funished by a provider that relieved a referring physician of a task the doctor would otherwise have done.

The rationale of the OIG in deciding to approve the arrangement had four components:

1.  The service was available for all patients and referring physicians and was not tied to the volume or value of any physician's referrals, and since insurance plans do not have any uniformity in the requirements for who is to obtain the pre-authorization, it is only by chance if the physician is relieved of a duty.

2.  No payments will be made to the physicians by the imaging centers, and there are no other rewards to physicians as incentives for referrals.  The imaging centers only pass on to the payors the medical necessity information provided by the referring physician, and there is no assurance that the procedure will be authorized.

3.  The process would be transparent, in that the persons seeking pre-authorization would identify themselves as representatives of  the imaging centers, would make all their records concerning the requests to available to the physicians, and would have little ability to influence a referral because it would have already been made.

4.  Economically, it is the imaging centers who are at risk if pre-authorization is not done properly, as it is their charges that will be denied.  They therefore have a significant interest in making sure that the pre-authorization is received prior to their procedures being performed.

It is the 4th justification that seems to be the strongest here, since the risk is indeed all on the imaging center.  It is just somewhat unusual to see the OIG directly recognize the economic reality of the situation in addressing a fraud and abuse concern.

While this Opinion, like all such Advisory Opinions, is limited to the specific case at hand, it provides guidance to other providers as to when it may be permissible to provide an "extra" to enhance your services.  Whether it can translate into services beyond this type of administrative prerequisite for reimbursement is not clear.

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Entering into a Medical Office Building (MOB) Lease can often implicate Anti-Kickback and Stark law issues.  In Beware, Negotiating Medical Office Building Leases, which was recently published in the Colorado Real Estate Journal, I discuss how MOB leases can potentially violate Anti-Kickback and Stark laws and provide guidance on how to structure these leases to comply with federal and state law.

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Davis Graham & Stubbs originally compiled this summary of Colorado fraud & abuse statutes and regulations for the American Health Lawyers Association (AHLA).  These state laws generally compliment and enhance the federal Stark and Anti-Kickback statutes. 

With the Obama administration's increased efforts to combat health care fraud, it's important for all healthcare providers to be apprised of what the fraud and abuse laws prohibit, as well as the legal exceptions to these laws.

(The summary is reprinted with permission from the AHLA.  Copyright 2009 American Health Lawyers Association, Washington, D.C.) 

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