Articles Posted in Medicare Fraud

united-states-capital-516992-m.jpgEarlier this month, the Centers for Medicare and Medicaid Services (CMS) announced implementation of a Final Rule intended to increase oversight of Medicare providers and enable recoveries from those health care providers that commit fraud and violate Medicare rules. According to the press release, Marilyn Tavenner, the CMS Administrator, stated that the new rules “are common-sense safeguards to preserve Medicare for generations to come” and that “[t]he Administration is committed to using all appropriate tools as part of its comprehensive program integrity strategy shaped by the Affordable Care Act [ACA].”

Georgia Medicare Fraud Law Firm

Our Atlanta and Augusta, Georgia health care law firm has reviewed the Final Rule. The Final Rule’s new provisions are intended to preclude doctors and other health care providers with unpaid Medicare debt from re-entering the Medicare program, remove health care providers who engage in abusive Medicare billing, and authorize other provisions that will save more than $327 million annually. The Final Rule makes certain changes to the provider enrollment provisions of 42 CFR part 424, subpart P.

CMS has removed about 25,000 health care providers from the Medicare program. The new rules are designed to “stop bad actors from coming back in as we continue to protect our patients,” according to Ms. Tavenner. Under the ACA, CMS has increased ability to fight Medicare fraud, waste and abuse. CMS believes that removing providers from Medicare has a substantial positive impact on savings, contending that such removals have prevented $81 million in payments from being made.
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woman-in-hospital-1051476-m.jpgThe Department of Justice (DOJ) announced on October 22, 2014 a resolution of claims that DaVita Healthcare Partners, Inc., a provider of dialysis services, engaged in a referral and kickback scheme that violated the False Claims Act (FCA). The DOJ announced that DaVita has agreed to pay $350 million to settle the government’s case. The Government’s case was not proven and was only alleged. Liability was not determined prior to the settlement and DaVita has not been shown to have engaged in wrong doing. Our Atlanta and Augusta, Georgia business and health care law firm represents health care providers and businesses and helps them avoid legal pitfalls.
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whistle-182576-m.jpgThe vast majority of physicians and other health care providers endeavor to provide services and bill for them in an ethical, legal manner. Trust is at the core of the federal government’s provider reimbursement scheme under Medicare and other federal health programs. The federal government relies upon health care providers submitting accurate and truthful claims. The fact that some health care providers have exploited federal health programs for illegal economic gain has resulted in laws intended to combat fraud and abuse, improve patient care and protect tax payer money. Currently, there is a strong push in federal law enforcement to aggressively enforce federal fraud and abuse laws.1

The Federal False Claims Act (FCA)2 makes it illegal for health care providers to submit claims for payment to Medicare that the provider knows, or should know, are false or fraudulent. The FCA contains a whistleblower provision that authorizes a private citizen or “relator” to file a lawsuit on behalf of the federal government, and entitles relators to a percentage of any recovery. FCA whistleblower cases often assert violations of other federal fraud and abuse laws, such as the Anti-Kickback Statute (AKS),3 the Physician Self-Referral Law (Stark Law),4 the Exclusion Authorities,5 and the Civil Monetary Penalties Law (CMPL).6

For relators, “blowing the whistle” becomes more than an abstract notion when it comes time to “plead,” or state, the claim in court. Assuming a claim has legal merit, getting it right in court is what determines success or failure. Following the law in reporting alleged wrongdoing is essential, including procedural law dictating how to properly plead a case. Rule 9(b) of the Federal Rules of Civil Procedure requires that “[t]he whistle must be blown not only loudly, but with Rule 9(b) particularity in the Complaint before the courts will listen.”7 The concept of “particularity” is important to a federal whistleblower’s opportunity for success. This means is that a whistleblower complaint must state “facts as to time, place, and substance” of the alleged wrongdoing, and that “an actual false claim for payment [was] made to the Government.”8
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law-education-series-3-68918-m.jpgClinical laboratory payments to physicians in excess of the fair market value of services provided or that correlate to the volume or value of referrals can constitute health care fraud and trigger very serious civil and criminal penalties. The Department of Health and Human Services’ Office of Inspector General (OIG) recently issued a Special Fraud Alert (the “Alert”) addressing lab compensation to referring doctors and medical practices for blood specimen collection, processing and packaging, and for submitting patient data to a registry or database. Our Georgia health care law firm endeavors to follow updates in health care laws and regulations that impact providers, particularly Stark law and the federal Anti-Kickback Statute (AKS). This OIG Alert warrants caution and careful evaluation of any applicable financial arrangements by affected physicians and medical practices to ensure compliance with federal law.

Labs and physicians: BEWARE of Stark Law and the Anti-Kickback Statute
At the heart of Stark Law and the AKS is the notion that (unlike most other industries) health care business referrals may, under some circumstances, be a bad thing. Kickbacks that corrupt medical judgment about the medical necessity of services, result in the overutilization of medical products and services, increase the cost of federal programs, or that cause unfair competition, are of great interest to the Federal Government and are the intended targets of Stark Law and the AKS.

The AKS, unlike Stark, is a criminal statute, a violation of which requires evidence of criminal intent. However, the OIG may find evidence of such intent even by mere characteristics of a particular financial arrangement, including legal structure, the absence of safeguards, and, of course, actual conduct of the parties regarding the arrangement.
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gavel-3-1409593-m.jpgOn August 21, 2014, the United States Attorney for the Northern District of Ohio, Stephen D. Dettelbach, together with representatives of the FBI and OIG, announced the indictment of a Westlake, Ohio Cardiologist for alleged health care fraud. The cardiologist is alleged to have overbilled Medicare and private insurers by approximately $7.2 million. About $1.5 million of the alleged overbillings was actually paid.

Alleged Medicare Fraud

The indictment alleges that Dr. Harold Persaud, board certified in internal medicine and cardiovascular disease, maintained a private medical practice in Westlake and had hospital privileges at St. John’s Medical Center, Fairview Hospital, and Southwest General Hospital, and used inaccurate coding to obtain reimbursement for services more costly than what was actually performed, performed medical tests that were not medically necessary, falsely recorded the existence and extent of blockage shown by cardiac catheterizations, recorded false symptoms to justify tests and procedures, and inserted stents on patients who did not have 70% or more blockage. An indictment is a charge, not evidence, and a defendant is entitled to defend himself and require the government to prove its case.

The indictment further alleges that Dr. Persaud ordered or performed other procedures that were not medically necessary, including aortograms and renal angiograms and placing a stent in an artery of one patient who had a functioning bypass, endangering the patient’s life.

In 2012, during a federal investigation relating to the subject matter of the indictment, the FBI seized numerous financial, patient and medical records and documents from Dr. Persaud’s office, according to reporting by Cleveland.com. On August 30, 2012, St. John Medical Center reported that it sent letters of apology to 23 patients, informing them that stents placed in their hearts by Dr. Persaud may not have been medically necessary, and that the hospital would pay for follow-up visits with a cardiologist of their choice. Dr. Persaud was an independent cardiologist not employed by the hospital. The hospital’s internal investigation, which led to the federal investigation, began when staff members in its cardiac catheterization lab informed the hospital’s cardiology department that Dr. Persaud’s methodology respecting stent procedures varied from protocol followed by other doctors.
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us-capitol-building-2-431642-m.jpgAs part of the Centers for Medicare and Medicaid Services’ (CMS) continued efforts to combat Medicare fraud, federal charges were recently brought against 90 individuals across the nation for false billings to Medicare, totaling $260 million dollars. These charges were the result of a collective task force comprising federal, state, and local agencies and the use of data analysis and increased community awareness. This takedown marks the seventh national takedown conducted by the federal Medicare Fraud Strike Force. The goal of the Medicare Fraud Strike Force is to protect taxpayer resources and senior citizen rights by combating fraud and abuse in the Medicare system for personal gain. The 90 individuals charged in this takedown were out of Miami, Houston, Los Angeles, Detroit, Tampa and Brooklyn, and 27 of them are medical professionals.
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whistleblower_false_claim_act_qui_tam-71225290.jpgTwo federal laws regulate referrals and financial arrangements between healthcare providers and facilities – Stark Law and the Anti-Kickback Statute.1 These laws have recently been at the center of important healthcare whistleblower fraud cases. While both serve the same essential purpose – to eliminate improper financial incentives that interfere with independent medical judgment and good patient care – they do so in slightly different ways and contexts.

Stark Law (also known as the “Ethics in Patient Referrals Act”) prohibits physician referrals of specified or “designated health services” for Medicare and Medicaid patients, where the physician or her immediate family member has a financial relationship with the referred entity.2 A financial relationship can include ownership, investment interest, and direct or indirect compensation arrangements.3 A “referral” is broadly defined to include “the request by a physician for the item or service” (Medicare Part B services) and “the request or establishment of a plan of care by a physician which includes the provision of the designated health service” (all other services).4 Designated health services (DHS) include laboratory services, physical therapy and occupational services, radiology (including MRI, ultrasound, and computer tomography scan) services, radiation therapy services and supplies, durable medical equipment and supplies, prosthetics, orthotics, and prosthetic devices, home health services and supplies, outpatient prescription drugs, and inpatient and outpatient hospital services.5
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whistle-718988-m.jpgControlling healthcare costs is essential to the economic security of the United States. Total healthcare spending in the U.S., already an astronomical $3 trillion dollars in 2013, is expected to grow almost 6% annually through 2022.1 Spiraling healthcare costs is an obvious problem on many levels, including the fact that, through Medicare, the federal government is the single largest purchaser of healthcare in our third party payer system. Total Medicare spending is expected to increase from $523 billion in 2010 to $932 billion by 2020.2

The Patient Protection and Affordable Care Act, commonly known as the Affordable Care Act (ACA) or “Obamacare,” has frequently been in the spotlight for website issues and intense political debate over the law. However, a less publicized – but critical – aspect of the ACA is its intended role of curbing the rise in our nation’s healthcare costs.3
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whistleblower_false_claim_act_qui_tam-71225290.jpgWhat are whistleblower lawsuits?

Whistleblower lawsuits and settlements are on the rise and in the news. From January 2009 through September 2013, the federal government recovered $17 billion in false claims alone. Of course, most healthcare providers are honest and work diligently to improve the health of their patients and contribute to the lawful operation of a healthcare business. It is in the best financial interests of physicians and other healthcare providers who comply with the law that fraudulent schemes to unlawfully obtain government funds be deterred and remedied. The federal and many state governments have determined that a crucial means of combatting healthcare fraud is by incentivizing those who are aware of fraud to report it as a “whistleblower.”1 In light of spiraling healthcare costs and with state and federal governments’ roles as third party payors, healthcare whistleblowing protects law-abiding taxpayers, healthcare professionals and consumers.

As this article explains, many federal and state whistleblower laws provide legal causes of actions for employees, officials and others who suspect or discover violations of law, waste or abuse within government or fraudulent practices by companies doing business with government. A person with knowledge of a violation or fraud, known as a whistleblower or “relator,” may bring a lawsuit to expose the fraud or abuse and recover damages on the government’s behalf. In many cases, whistleblowers are entitled to a percentage of the recovery for their efforts in uncovering fraud and assisting in the recovery.
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gavel-952313-m.jpgHalifax Hospital Medical Center and Halifax Staffing, Inc. (Halifax), on the day of jury selection, agreed to pay $85 million and made other concessions as part of a settlement with the federal government to resolve allegations that Halifax violated STARK prohibitions and the False Claims Act (FCA). The settlement amount is the largest STARK sanction to date against a hospital system for STARK law violations.

The case is styled United States ex rel v. Halifax Hospital Medical Center, et al., No. 09-cv-1002 (M.D. Fla). The government’s allegations stemmed from Halifax’s financial relationships with a group of oncologists. The case was initiated by a compliance officer of the hospital, and the Justice Department agreed to take the case pursuant to the FCA.
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