More dollars to battle healthcare fraud on the horizon

fraudHas your practice adopted a corporate compliance program? If not, now is the time to call your healthcare lawyer. That’s because if a proposed federal rule goes into effect a lot more money could be made available to catch those involved in fraud and abuse.

Health and Human Services Secretary Kathleen Sebelius just announced a proposal that would increase rewards for reporting fraud to $9.9 million. While that may sound like a lot, during the last three years the Obama administration has recovered nearly $15 billion in fraud, a big chunk of which came from individual whistleblowers.

Under the proposed changes, a person who provides specific information that leads to the recovery of money may be eligible to receive a reward of 15 percent of the amount recovered, up to nearly $10 million. HHS currently offers a reward of 10 percent up to $1,000 under the current reward program.

With that kind of money on the line, it could become more worthwhile and draw more potential whistleblowers from the woodwork.

Because of that Medicare providers and suppliers should adopt a strict corporate compliance program establishing a culture of compliance or risk the possibility of becoming the target of someone seeking a reward.

Current, future, and former employees, competitors, customers/patients, and vendors not only are potential but the most likely whistleblowers. And it’s not hard. It does not require that a whistleblower case be filed in federal court. They only need to provide useful information and then apply for the reward.

In addition to increasing reward compensation, the proposed rule would also strengthen certain provider enrollment provisions including allowing HHS to deny enrollment of providers who are affiliated with an entity that has unpaid Medicare debt, deny or revoke billing privileges for individuals with felony convictions, and revoke privileges for providers and suppliers who are abusing their billing privileges.

Providers and suppliers who receive reimbursement from Medicare should contact their legal counsel to review their current or proposed business arrangements and discuss the creation and implementation of a formal compliance plan. It could help them avoid becoming a target.

HHS issued a fact sheet on the proposed rule that further outlines the reward program proposals.

Miami-Dade therapist sentenced to 4-years for Medicare fraud

Following her conviction on one count of conspiracy to submit false and fraudulent claims to Medicare through her employer — American Therapeutic Corporation (ATC) and a related company, American Sleep Institute — Nichole Eckert a mental health therapist has been sentenced to  four years in prison, followed by three years of supervised release. She also was ordered  to pay more than $72 million in restitution, jointly and severally, with her co-defendants for participating in a $205 million Medicare fraud scheme.

A doctor is being arrested for Medicare fraud.ATC, headquartered in Miami, operated partial hospitalization programs (PHPs) in locations in South Florida and Orlando. According to the U.S. Attorney’s press release, ATC secured patients by paying kickbacks to assisted living facility owners and halfway house owners who would then steer patients to ATC for PHP treatments.

The referred patients were found to be ineligible for the PHP treatments which  ATC billed to Medicare. Funds received from Medicare were laundered by some of the co-conspirators to create cash to pay kickbacks.

Eckert’s role was to fabricate patient files to substantiate Medicare claims and make it appear that ATC patients were qualified for PHP treatment. The false records also showed that patients were receiving the intensive, individualized treatment PHPs are supposed to provide.  Some or the patients were ineligible for PHP treatments. ATC, a related company, Medlink, and dozens of individuals have previously been convicted at trial or pleaded guilty for their participation in the scheme.

Obama signs bill simplifying Medicare secondary payer compliance

Jan. 14, 2013 – On Jan. 10, President Obama signed into law the Strengthening Medicare and Repaying Taxpayers (SMART) Act passed by Congress in December.

The SMART Act is aimed at simplifying compliance with the Medicare Secondary Payer (MSP) Act. MSP has been around since the 1980s and made Medicare the secondary payer to personal injury insurance, health insurance, and workers’ compensation plans.

MSP required parties who have settled a liability case, such as a workers’ compensation or auto accident case settlement or judgment, to determine and repay the Medicare program for any conditional payments it made on behalf of a beneficiary in connection with the liability case. This has sometimes been difficult because getting the necessary information out of Medicare is challenging, making it hard to determine how much Medicare should be paid.

The SMART Act addressed this problem by requiring CMS to establish a website whereby individuals or insurance companies can access information on claims paid by Medicare. It also requires that Medicare provide conditional payment information within 65 days of a request. Medicare is also required to respond to individual disputes regarding Medicare’s conditional payments within 11 days and to establish regulations providing appellate rights regarding his determinations of conditional payments made.

The SMART Act also establishes a three-year statute of limitations on MSP actions by Medicare to recover claims.

Lawmakers push for redesign of Medicare cards

Jan. 2, 2013 – In an unusual display of unity, the U.S. House of Representatives passed a bill designed to protect the nation’s seniors from identity theft by eliminating Social Security numbers from the Medicare ID card.

This Social security number on a Medicare ID cardfollows a recent investigation that revealed a substantial number of Medicare beneficiaries are potential victims of identity theft. Medicare officials are not sold on the idea due to the high cost and the multiple agencies involved in the process of redesigning the ID cards and issuing new numbers.

Earlier this year, a report by the Department of Health and Human Services Inspector General found more than a quarter-million Medicare beneficiaries are potential victims of identity theft.

Click here to read more.

Lee Lasris interviewed about DOJ guidelines dealing with the medical necessity of ICDs.

Sept. 26, 2012 – This past August, the U.S. Department of Justice sent guidelines to hospitals that dealt with the medical necessity of implantable cardioverter defibrillators, or ICDs.

The guidelines were released to help with the settlement of claims stemming out of the DOJ’s investigation on ICDs that were placed in Medicare beneficiaries between 2003 and 2010 at hospitals. Hundreds of hospitals stand to face False Claims Act penalties for improper use of ICDs as a result of the investigations, which as most hospitals going through fraud and abuse measures right now know can be a very costly process. Click here to read the full story.

Implementation of Physician Payments Sunshine Act delayed until 2013

May 7, 2012 – The federal government is putting off, until 2013, a key provision of the country’s healthcare overhaul that’s designed to shed light on the financial relationships between doctors, pharmaceutical companies and medical device makers.

The Centers for Medicare and Medicaid (CMS) recently announced that it needs more time to implement the provision in order to give those reporting organizations time to prepare, and for the agency to read through the more than 300 public comments it received.

In a blog post, CMS said delay of the provision, which was included as section 6002 in the Affordable Care Act of 2010, will give it time to address operational and implementation issues in a thoughtful manner and to ensure the accuracy of the data that is collected.

The act requires companies to record physician payments worth more than $10 in 2012 and to report them on March 31, 2013. Payments include: stock options, research grants, consulting fees and travel to medical conferences. Details of these offerings will be posted on the web starting Sept. 30, 2013.

One of the sponsors of the act, Sen. Chuck Grassley of Iowa, said it was imperative that consumers know more about the financial relationships between their doctors and drug companies.

Pew Health Group reported that direct marketing by the pharmaceutical industry to medical professionals is estimated at $20 billion to $57 billion a year.

CMS said it plans to release the final rule later this year.


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