Overview

Medicare is ripe for plunder. The government pays money based upon a bare electronic submission indicating that particular services or supplies for a particular patient covered by Medicare have been rendered or furnished. Beyond computer edits, there is no verification or due diligence before payment is made. Medicare just pays. It is only when the Medicare fraud is large enough and/or egregious enough, that Medicare and the federal government will chase the ill-gotten funds.

The elimination of third-party payments (“assignment of benefits” directly to physicians and other providers as opposed to reimbursement of the beneficiary) will help, but there would still be a lot of cracks. Healthcare fraud simply is ripe for disclosure by Medicare fraud whistleblowers, and it is important that the qui tam provisions of the False Claims Act continue to be available as incentive for honest-minded Medicare fraud whistleblowers to come forward and expose fraud.

False Claims Act violations for Medicare fraud can be divided by the type of facility or healthcare provider involved. False Claims Act violations that are made by providers such as hospitals, skilled nursing facilities, home health agencies, pharmacies, HMO’s, physician groups, and so on, and include conduct such as Diagnosis Related Group fraud, APC upcoding, RUG upcoding, CPT upcoding, and Hospice Fraud, just to name a few. Our Medicare fraud lawyers and consultants have broad familiarity with these areas.

Payments made to providers other than hospitals/inpatient facilities are generally paid on the basis of a Medicare fee schedule. Potential False Claims Act violations include the following:

  1. Billing for services not rendered or products not delivered;
  2. Billing for services or supplies not ordered;
  3. Misrepresenting services rendered or product provided e.g. Upcoding, inappropriate coding;
  4. Billing for medically unnecessary services – this includes furnishing services in excess of the patient’s needs, or furnishing a battery of diagnostic tests, where, based on the diagnosis, only a few were needed; it also includes misrepresenting the diagnosis to justify the services or products;
  5. Duplicate billing;
  6. Billing procedures over a period of days when all treatment occurred during one visit i.e. split billing;
  7. PPS fraud.
  8. Medicare kickbacks.
  9. Forging Documentation , such as a Certificate of Medical Necessity.
  10. Coding False Claims.
  11. Inpatient Hospital Payments for New Technologies Fraud.
  12. Part A Admissions that lack medical necessity (inpatient, observation, outpatient).

Payments made to Medicare-funded managed care plans can result in violations of the False Claims Act, by practices such as:

  1. Inflated general and administrative costs for cost-based MCOs;
  2. The intentional failure to pay providers;
  3. MCO and physician relationships that are driven by cost-containment at the expense of patient care.
  4. Failure to provide necessary services for patients;

Our Medicare fraud lawyers have had the privilege of helping our clients in cases ranging from coding false claims, Long Term Care fraud, DRG false claims, PPS false claims, to outpatient PPS false claims, Stark law and Medicare kickback violations and other types of Medicare fraud. Medicare has been amended and expanded many times since it was enacted in 1965, and although efforts have been made to curtail Medicare fraud, we still have a long way to go. Medicare fraud has cost taxpayers billions over the last decade, and through the qui tam provisions of the False Claims Act, a significant portion has been returned to the U.S. Treasury.

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In addition to the false claims that are described above, two federal laws criminalize conduct that often lead to over utilization, which can give rise to False Claims Act violations. The two laws which proscribe such conduct are the Stark law and Anti-kickback law:

The Stark law, 42 U.S.C. §1395nn, is also known as the Physician Self-Referral Law. If a physician (or immediate family member) has a direct or indirect financial relationship (ownership or compensation) with an entity that provides any of certain designated health services (“DHS”), the physician cannot refer patients to the entity for DHS and the entity cannot submit a claim to Medicare for such DHS unless the financial fits in a statutory or regulatory exception.

The Stark law was intended to prohibit physicians from profiting (actually or potentially) from their own referrals. The Stark law acts to sanction improper physician referrals, and does so by providing penalties for illegal referrals prospectively. Its effect is to prohibit relationships that have been demonstrated to encourage over utilization. It is a strict liability statute, i.e. there is no need to show knowledge or intent.

The Medicare and Medicaid programs depend on physicians and other health care professionals to exercise independent judgment in the best interests of patients. Hospital admissions that lack  medical necessity, for instance, is not in the best interest of the patients, as patient harm can result among others. Financial incentives tied to referrals have a tendency to corrupt the health care delivery system in ways that harm the federal programs and their beneficiaries. Corruption of medical decision-making can result when a physician refers a patient to a provider on the basis of the physician’s financial self-interest instead of the patient’s best interests.

Overpaid medical directorships, interest free loans/forgiveness of debts, illegal recruitment arrangements and improper discounts, may represent financial windfalls to physicians resulting in hospital referrals in violation of the “Stark law.” Examples also include sham contracts (which afford to physicians benefits for office space, renovations, equipment, furniture, housekeeping services, office supplies, copy and fax machines, telephone and utility as well as transcription services). A Medicare fraud whistleblower can disclose violations of the Stark law, which in turn can be the basis for False Claims Act liability.

The other law is the federal Anti-kickback statute, 42 U.S.C. § 1320a-7b(b).  It arose out of congressional concern that payoffs to those who can influence healthcare decisions will result in goods and services being provided that are medically unnecessary, of poor quality, or even harmful to a vulnerable patient population. To protect the integrity of the program from these difficult to detect harms, Congress enacted a per se prohibition against the payment of Medicare kickbacks in any form, regardless of whether the particular kickback gave rise to over utilization or poor quality of care.

The Anti-kickback statute prohibits any person or entity from making or accepting payment to induce or reward any person for referring, recommending or arranging for federally-funded medical services, including services provided under the Medicare, Medicaid and TRICARE programs.

A violation of the Anti-kickback statute can give rise to False Claims Act liability.

Federal Medicare fraud, ranging from DME false claims, DRG false claims, coding fraud, Stark law and anti-kickback violation, clinical trial fraud, and PPS fraud are only a few of the types of health care fraud cases that we handle. Our Medicare fraud lawyers can provide you with experienced representation with medical device fraud and pharmaceutical fraud, both which include clinical trial fraud and CGMP fraud.