Mismanagement or sloppy business practices can quickly lead to trouble with Medicare fraud investigators, even when healthcare providers have no intention to defraud the government.
This article appears in the February 2014 issue of Managed Care Contracting & Reimbursement Advisor.
As physicians push to maximize their revenue, it can be easy to stumble into fraud through simple oversights and failing to understand how regulators look for claims that don't quite add up. Don't rest on the fact that you have no intention to defraud the government; sometimes you can get in just as much trouble by accident.
There are many scenarios in which a practitioner can be charged with healthcare claims fraud, even when he or she thinks a legitimate service has been provided and billed accordingly, cautions Riza I. Dagli, JD, who previously held several key posts within the U.S. Office of the Attorney General, including director of the Medicaid Fraud Control Unit, where he supervised investigations and prosecutions of Medicaid and Medicare fraud, healthcare fraud, patient abuse and neglect, off-label marketing, and kickback litigation. He is now a partner in the health law practice at Brach Eichler in Roseland, N.J., and chairs its criminal defense and government investigations practice.
Traditionally, healthcare fraud has been considered to be billing for treatment you did not provide, Dagli says. That definition has changed lately and physicians must understand how good intentions will not necessarily keep them out of trouble.
"Nowadays the laws are so strict that people are more careful not to do phantom billing, but unfortunately there are situations where you provide a service to the patient, the patient leaves, and all of a sudden you're in a fraud investigation," Dagli says. "Physicians have to be mindful that mismanagement or sloppy business practices can land them in a lot of hot water because prosecutors are looking for other manner of fraud besides making up a patient name or billing for someone who never really came to your office."
Dagli cites these top six areas in which physicians can unwittingly stumble into Medicare fraud:
1. Billing with an expired license. If you are billing when your license is expired or your staff's license is expired, you could be charged with fraud even though you are providing the service. Treatment provided in any gap period between renewals or when a staff member did not realize his or her license had expired technically was not provided, Dagli explains.
"This is not theoretical. There are people who have been convicted, paid sanctions, or lost their license because they let their license lapse. It happens to pharmacists, nurses, doctors," he says. "There have been cases where a lapse of just a few days resulted in allegations of Medicare fraud."
In those cases the fraud charges are sometimes driven by the managed care company, which is always looking for opportunities to declare claims invalid and save a few dollars, Dagli says. Licenses are easily verified by payers and prosecutors find the prosecution of such cases to be a slam dunk, he says. No license means there was no treatment, which means the claim was fraudulent.
2. Not supervising closely enough. If you are not in the same building, or in the same room or available by phone in some cases, you are not supervising, and this could be fraud. Requirements for physician supervision of other providers, such as therapists, will vary, but it is important to know what is required and that "supervision" is not a general term. It has a specific meaning for some treatments that must be met and documented.
"People have been indicted for not providing supervision, because in the eyes of the state if you did not supervise properly, you did not provide the service," Dagli says. "They take a very strong line with these things."
3. Patient didn't pick up the medications. If you are not crediting back the medication that was not dispensed or picked up, this could be fraud. There must be a system in place to flag medications that were prescribed and billed for, but which the patient never received.
4. Billing clerk assumes doctor performed certain services. If he or she didn't, even if the doctor was supposed to, the billing could be fraudulent. This can be an easy mistake to make because physicians depend on their billing staff to understand some routine treatment and know that certain services are always provided in particular cases. That can ease the billing process, but it can lead to fraud if the clerk automatically charges for that treatment when, for whatever reason, it was not provided to that patient.
"This can turn into sloppy management if you're not careful," Dagli says. "We know that everyone wants to streamline the systems and depend on staff to know certain things without being told, but that's a slippery slope that can lead to bills being automatically generated when the doctor decided to change the treatment routine for some reason or just forgot to do something."
5. Helping out poor patients with food or food coupons. This could be a kickback, even though it seems like harmless charity. A well-intended act of generosity could come back to haunt you because regulators are always wary of your motives.
"From the state's perspective, they know that some people don't do these things out of goodwill but because they think it encourages the patient to come back to their office instead of going somewhere else for care," Dagli says. "It's unfortunate that you have to think about that when you're just trying to be a good guy by giving them food or a gift card, but it is something that the state is going to look at and possibly misinterpret."
The guidelines for such gifts state that, in general, a single gift worth $10 or less, or an aggregate of $50 in one year, will not be considered an inducement, Dagli explains. Keeping track of the free doughnuts and hamburger coupons you hand out may not be worth the trouble, but Dagli says regulators will be more attuned to a systematic program that seems to reward patients for their business.
"Any program in which you offer some kind of gift for visiting regularly will get you into trouble, even if your real goal is just to encourage people with chronic conditions to come in for checkups," he explains.
6. Working too quickly. Some CPT codes are estimated to last 20 minutes to a half-hour, for example. If you are billing for these procedures five times an hour or 50 times a day, your justification that you are just faster than average may not cut it.
In your mind that is not fraud because you know you provided the service," Dagli says. "But an outside observer will say that is just not possible. You may be far more efficient than some of your peers, but you cannot bill for more than what Medicare says can reasonably be done in the time specified."
Remember that with many of these examples, the actual error may be committed by the practice staff. Even so, the physician can be investigated and charged, and have a difficult time defending the charge, Dagli says.
"The physicians ultimately are going to be accountable, so it is to their benefit to get involved directly in preventing these pitfalls," he says. "You should be able to concentrate on patients and leave the billing to someone else, but the reality is that you have to know what's happening."