According to the Associated Press (March 6, 2011), an Indiana pharmacist, John D. Love (owner of the Terre Haute Prescription Shop) "faces a possible 10-year prison sentence if convicted of health care fraud and money laundering in a scheme that netted him more than $3.57 million, federal prosecutors say." The amount of the case qualifies it as the largest case of health care fraud and money laundering ever discovered in the Southern District of Indiana.
WPS, the Legacy Part B Medicare Administrative Contractor for Illinois, Michigan, Wisconsin and Minnesota, has issued recent guidance regarding documentation of discard or waste for drugs and biologicals as well as missing information on the Medicare CMS-855 provider enrollment applications. Notably, WPS voices CMS' direction that physicians, hospitals, and other providers "make good faith efforts to minimize the unused portion of a drug/biological product by ordering, scheduling, and storing in a manner in which the provider can use drugs/biologicals most efficiently in a clinically appropriate manner. Drug wastage or discard must be documented in the patient's medical record with date, time, amount wasted, and reason for wastage." CMS may deny an amount billed as non-rendered if there is a discrepancy between the amount administered and the amount billed, unless the waste is properly documented. Finally, the wasted amount must not be administered to another patient and, subsequently, re-billed.
In its other guidance, WPS indicates CMS is beginning to decrease its dependence on standard mail communication and, instead, is turning its efforts toward e-mail communication for the majority of instances for missing information on a CMS-855 provider enrollment application. CMS insists that contact persons listed on the 855 stay attentive to their e-mails and promptly respond to requests.
- Transferring the Bureau of Health Professions, the Bureau of Health Systems and the Controlled Substances Advisory Commission from the Department of Community Health to the DLRA;
- Creating an Office of Regulatory Reinvention tasked with reviewing all existing and proposed rules to ensure economic growth; and
- Creating the MI Administrative Hearing System, which is an independent agency that will centralize the state's administrative hearings.
Both executive orders are set to go into effect April 24, 2011.
South Florida has been called the "national epicenter" for the illegal dispensing of prescription drugs. Law enforcement officials have targeted South Florida for quite some time, with February 23 being no exception. On February 23, law enforcement officials and Drug Enforcement Agency (DEA) agents raided six pain clinics accused of illegally dispensing prescription drugs, arresting 22 people--five of who were doctors.
While most pain physicians do not conduct pill mills, because of the few that do, all pain physicians are subject to increased scrutiny. As such, it is important for well-intentioned pain management physicians to proactively protect themselves. For example, it is important to carefully review internal documentation practices; review any applicable state law or guidance; and establish patient narcotics agreements and consistently monitor and enforce them.
In a report issued last week, the Centers for Medicare and Medicaid Services (CMS) states that National Government Services, Inc. (NGS), the durable medical equipment (DME) Medicare administrative contractor for Jurisdiction B, inappropriately permitted $56.2 million in claims for CY 2007 for home blood-glucose test strips and/or lancet supplies used for diabetics. Of this $56.2 million, $42.2 million of this amount was inappropriately paid to DME suppliers, all of which, according to CMS, could have been prevented had NGS had the proper controls in place to ensure the claims complied with Medicare's documentation requirements. By way of brief background, typically, Medicare permits up to 100 test strips and 100 lancets per month for insulin-treated diabetics and every 3 months for non-insulin-treated diabetics. For high utilization claims--those claims that indicate a greater quantity--additional requirements apply.
CMS provided 3 recommendations to NGS to achieve potential savings for Medicare in the future:
1. Implement a system that identifies high utilization claims for test strips and/or lancets and work with CMS to develop cost-effective ways of determining which claims should be further reviewed for compliance with Medicare documentation requirements;
2. Implement a system that identifies claims for test strips and/or lancets that have overlapping test dates for a single beneficiary; and
3. When identifying DME suppliers with a high volume of high utilization claims, enforcing the Medicare documentation requirements for claims for test strips and/or lancets, performing prepayment reviews of those suppliers, and referring those DME suppliers to the Office of Inspector General (OIG) or CMS for review or investigation.
In its first civil monetary penalty issued for a covered entity's violation of the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule, the Department of Health and Human Services (HHS), through its Office of Civil Rights (OCR), imposed a $4.3 million penalty on Cignet Health of Prince George's County, Maryland (Cignet) in its Notice of Final Determination. In the October 20, 2010 Notice of Proposed Determination, the OCR found that Cignet denied 41 patients access to their medical records when requested. Subject to certain exceptions, 45 CFR 164.524 provides that an individual has a right of access to inspect and obtain a copy of his/her protected health information in a designated record set no later than 30 days (60 days for information that is not maintained or accessible to the covered entity on-site) after the covered entity's receipt of the request. Moreover, the OCR found that Cignet failed to cooperate with the OCR's investigations and that the failure to cooperate was due to Cignet's willful neglect to comply with the Privacy Rule.
Empire Blue Cross Blue Shield of New York, serving about 5 million members, is now instituting a pay-for-performance program that rewards physicians with greater reimbursement for complying with certain best practices. The aim is to encourage physicians to adopt best practices, so those who do not meet the standards will not be penalized. The factors included in the considerations are the use of electronic health records, statins for patients with coronary artery disease, beta blockers for patients after a heart attack, and avoiding the unnecessary use of antibiotics for adults and children for certain respiratory illnesses. As of August, the program, available for all commercial plans, includes an additional 3-5% above the standard fee schedule for visit codes. BCBS has implemented this program in other states, as well, including Connecticut.
On Wednesday, February 16, the House Judiciary Committee approved a medical liability reform bill that would limit a plaintiff's non-economic damages to $250,000. This vote comes at a time when tort reform has been in the spotlight as President Obama's fiscal 2012 budget proposal included $250 million in grants over the next three years to fund state efforts to revamp their medical liability laws. These grants suggest that states enact reforms such as health courts, early disclosure protocols and safe harbors for providers who meet clinical guidelines.
The need to address the practice of defensive medicine is becoming increasingly important with the expansion of healthcare benefits to more and more Americans. In a study analyzing defensive imaging orders performed at Children's Hospital of Philadelphia, researchers found that 38.7% of the MRIs ordered were ordered for defensive purposes and that MRIs constituted 48.5% of defensive orders totaling almost $96,000 and 84.6% of defensive costs. Furthermore the study revealed that defensive imaging was 58% greater among surgeons who had been named in a lawsuit in the previous five years.
The risks of practicing defensive medicine in an over litigious society carry numerous risks including health risks due to over-exposure to radiation, increased health costs, and decreased efficiency in the system.
Over $225 million in false billing, 111 defendants, and 9 cities across the country. The Medicare Fraud Strike Force charged doctors, nurses, physical and occupational therapists, healthcare company owners and executives and others in the largest Medicare fraud takedown ever. The defendants are accused of various healthcare fraud-related crimes, including conspiracy to defraud Medicare, criminal false claims, anti-kickback statute violations, money laundering and aggravated identity theft. According to the Department of Justice, the defendants allegedly submitted claims to Medicare for medically unnecessary services and for services that were not provided. Furthermore, the defendants allegedly paid patient recruiters kickbacks for supplying beneficiary information to providers to submit fraudulent billing to Medicare for services that were medically unnecessary or never provided. The charges are based on a number of alleged fraud schemes involving home health agencies, physical and occupational therapy, nerve conduction tests and durable medical equipment.
Among the nine cities that were included in the scheme were Detroit and Brooklyn. In Detroit 21 defendants were named--including three doctors, three physical therapists and one occupational therapist--charged with defrauding Medicare for more than $23 million and in Brooklyn 10 defendants were named--including three doctors and one physical therapist--charged with defrauding Medicare for $90 million in false claims billings for physical therapy, proctology services and nerve conduction tests.
Over the last two years, the number of anti-fraud Strike Force teams operating in fraud "hot spots" increased from two to nine, with Chicago and Dallas being the most recent additions. Since its inception in 2007, the Strike Force teams have charged nearly 1000 individuals who have falsely billed Medicare for over $2.3 billion.
The 38-count indictment charged 20 individuals with various healthcare fraud, kickback and money laundering charges related to their alleged participation in a healthcare fraud scheme involving approximately $200 million in Medicare billing for mental health services. The defendants worked with and for American Therapeutic Corporation (ATC) and Medlink Professional Management Group Inc. allegedly submitting false claims for medically unnecessary services and services that were not actually rendered. The indictment alleges that kickbacks were paid to patient brokers and owners and operators of halfway houses and assisted living facilities, in exchange for delivering patients to ATC facilities. Notably, among those included in the indictment were not only physicians, but marketers who allegedly participated in the kickback operation. Moreover, the scheme also involved American Sleep Institute (ASI), in which the defendants allegedly paid additional kickbacks for patients to go to ASI.
In a statement by Daniel R. Levinson, the HHS Inspector General, "Community mental health centers are an essential element of the nation's health care system and serve vulnerable populations...Today's arrests by OIG agents and our law enforcement partners show that we will not tolerate criminals who pay kickbacks for referrals of Medicare business or who bill for services that were either medically unnecessary or never provided." Furthermore, an FBI special agent stated that "Community Mental Health Centers can no longer use phantom medical care as a front to bilk Medicare for unnecessary or nonexistent medical services...The FBI and our law enforcement partners will investigate and criminally prosecute such fraud to the fullest extent of the law."
While the healthcare community has grown accustomed to news of arrests pertaining to fraud in the durable medical equipment and home health agency fields, this case shows that no healthcare professional is immune from law enforcement investigation and prosecution. Law enforcement officials continue to investigate relationships between healthcare-related entities and bring charges demonstrating that compliance with federal and state fraud and abuse laws remains crucial for all healthcare entities.
Elizabeth L. Johnson, a former New York pharmacist was charged with grand larceny, offering a false instrument for filing and unauthorized practice for her allegations that she defrauded Medicaid out of approximately $191,000. While Johnson's license to practice as a pharmacist was suspended and she was excluded from participating in Medicaid, she allegedly continued to dispense prescriptions to Medicaid recipients for months. She was scheduled to appear in court on February 17.
Today, the Office of Inspector General (OIG) released supplemental materials for its Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse, which include a companion PowerPoint presentation, a speaker note set to assist in presenting the PowerPoint presentation and a narration of the speaker's notes.
All of these resources can be found at the OIG Physician Education Training Materials page and are valuable resources for all physicians.
Wisconsin Physician Services ("WPS"), the Medicare Part B Carrier for providers in Michigan, Illinois, Minnesota and Wisconsin, recently conducted a service-specific probe review of Current Procedural Terminology ("CPT") 99233 billed by neurology providers. WPS found that only 4 percent of billed claims were payable. 96 percent were denied or down-coded.
CPT 99233 is a hospital evaluation and management procedure code, which requires at least two of the following three components: (1) a detailed history; (2) a detailed examination; and (3) medical decision making of high complexity. When CPT 99233 is billed, the presenting problems are of moderate to high severity, and the physician typically spends 35 minutes at the bedside and on the patient's hospital floor or unit.
WPS denied/down-coded 96 percent of the claims at issue in the service-specific probe for the following reasons:
• The documentation did not support a face-to-face service (32 percent)
• The provider failed to submit requested documentation (32 percent)
• The documentation provided was insufficient or incomplete (30 percent)
• The documentation supported another procedure code (2 percent)
Significantly, nearly one-third of the claim denials were made when the physician failed to submit requested documentation. It is essential that providers and suppliers adhere to all requests for documentation issued by Medicare and its contractors to avoid potentially unnecessary claim denials/payment recoupments.
WPS has issued an article describing documentation problems and ways to prevent them.
The recovery audit contractor ("RAC") for Region B covering the Midwestern states, CGI Federal, Inc., is requesting additional documentation from providers regarding facet joint injections without reported imaging guidance (CPT codes 64470-64476). The requests for additional documentation acknowledge that CMS has not yet approved this issue for complex review and further acknowledge that the RAC Statement of Work mandates that no improper payments may be recovered until CMS approves the area for complex review. However, the RAC is requesting documentation to determine whether overpayments exist. If overpayments are identified, the claims will not be sent to the Medicare claims processor for adjustment unless and until CMS approves the topic of facet joint injections for complex review.
According to the RAC, the issue of facet joint injections was identified for review based upon the OIG report related to facet joint injections, the National Government Services, Inc. ("NGS") local coverage determination ("LCD") covering pain management, Coding and Compliance Focus News and an American Society of Anesthesiologists ("ASA") Committee on Economics Memorandum.
On February 2, 2011, the OIG published its findings from an audit conducted of Prescription Drug Event (PDE) records obtained from Medicare Part D sponsors for Schedule II drugs. A copy of the report can be found at: http://go.usa.gov/Ydd. A significant number of PDE records contained invalid prescriber identifiers which accounted for approximately $20.6 million in gross drug costs in 2007. Moreover, due to limited guidance and edits in place for the prescriber identifier field, the OIG was unable to identify the names of the top prescribers for three high abuse potential drugs: oxycodone, Ritalin, and methadone. The OIG made certain recommendations to CMS to address this matter and CMS is in the process of doing so in order to properly monitor and oversee the Part D program to detect, prevent, and control fraud, waste, and abuse.
The OIG has had a growing concern regarding the fraudulent prescribing of Schedule II drugs and is aware of numerous illegal practices including prescribing without a legitimate doctor's office visit, prescribing without a legitimate medical purpose, and collusion with the pharmacy. The attorneys at The Health Law Partners have a significant amount of experience in the defense of health care fraud investigations, staff privilege matters, overpayment demands and licensing matters arising out of allegations involving Schedule II drugs. For more information regarding such matters, please contact Robert S. Iwrey, Esq. at (248) 996-8510 or (212) 734-0128 or email@example.com.