The purpose of the qui tam provisions of the False Claims Act is to encourage private individuals who are aware of healthcare fraud being perpetrated against the government to bring such information forward.
Healthcare fraud can be accomplished in various ways, and can be found in all segments of the healthcare industry in every geographical area of the country. Healthcare consumes approximately 40% of federal spending, with Medicare spending approximately $350 billion, and Medicaid totaling approximately $320 billion.
The three largest healthcare programs which the federal government funds are the Medicare Program, the Medicaid Program (partially funded) and the TRICARE Program.
Medicare
In 1965, Title XVIII of the Social Security Act established the Medicare Program. Medicare is a system of healthcare cost reimbursement established by federal statute and regulations issued by HHS. Medicare helps pay for the costs of certain healthcare expenses for individuals 65 years of age or older.
Part A
Part A payments are made to institutional providers such as hospitals, skilled nursing facilities, home health agencies, etc. Payment is generally made under the Prospective Payment System (PPS). Part A False Claims Act violations include the following:
1. Failure to report overpayments;
2. DRG fraud;
3. Stark law and kickback violations;
4. Failure to return a Medicare Overpayment;
5. Inappropriate Hospital Admissions;
6. Billing pre-admission testing prior to a hospital admission that should be included in the diagnosis-related group (DRG).
Part B
Part B services provided by physicians, suppliers, and other healthcare providers are generally paid on the basis of a Medicare fee schedule. Under Part B, the Medicare beneficiary is responsible for any applicable deductible or co-insurance requirements. When services are covered under Part B, Medicare will use one of the two following methods of payment: (1) payment to the patient; (2) payment to the doctor (or supplier or other healthcare entity) – the “assignment” method. Part B Medicare fraud includes:
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. Falsifying records to meet or continue to meet the conditions of participation; this includes the alteration of dates, the forging of physician signatures, and the adding of additional information after the fact;
7. Increasing units of service, which are subject to a payment rate;
8. Billing procedures over a period of days when all treatment occurred during one visit i.e. split billing;
9. Laboratory unbundling – in this scenario, tests and other services that are automatically performed as a panel, group or set, should be billed as a single service. When a provider breaks these services out of the bundled group and bills them individually, the provider is deemed to be “unbundling;”
10. Stark law violations;
11. Durable Medical Equipment (DME) Fraud;
12. Deliberately submitting claims for duplicate reimbursement in order to get paid twice;
13. Completing Certificates of Medical Necessity (CMN) for patients not personally and professionally known by the provider;
14. Unbundling or “exploding” charges;
15. Soliciting, offering, or receiving a kickback, bribe or rebate;
16. Claims for services not medically necessary;
17. Violation of the Medicare Participation agreement or Medicare Conditions of Payment.
Part C
A third Medicare program that expands managed care options for beneficiaries who are entitled to Part A and enrolled in Part B was created under the Balanced Budget Act of 1997 and is called “Medicare + Choice” or “Medicare Part C,” or a Medcare supplemental (or Medigap) policy. Under this program, Medicare beneficiaries may select a managed care plan certified under Medicare. Payments Medicare makes to the private carrier replaces the amounts Medicare otherwise would have paid under Parts A and B.
Areas of Part C managed care false claims, fraud and abuse include:
1. Inflated general and administrative costs;
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.
Part D
See Part D Fraud.
Medicaid
Medicaid is a joint federal-state entitlement program that provides healthcare for low income people.
Medicaid enables the states to provide healthcare assistance and related services to needy individuals. Within broad federal rules, each state decides who is eligible for Medicaid, the services covered, payment levels for services and administrative and operation procedures. Each state’s Medicaid program is administered through a specific state entity, and the program itself is not always called “Medicaid” per se. For instance, in California, the program is called “Medi-Cal.” The state directly reimburses healthcare providers for services rendered, with the state obtaining the federal share of the payment from accounts which draw on funds of the United States Treasury.
Medicaid is the second-largest healthcare program in the federal budget and the second-largest state spending item, surpassed only by elementary and secondary education. The GAO has reported Medicaid fraud losses of over $20 billion. Unlike Medicare, which is one large system, Medicaid is 50 different ones, which makes Medicaid more vulnerable to fraud. Although the federal government provides matching funds for enforcement against healthcare fraud and abuse, it is up to the individual states to protect their Medicaid program from fraud.
Medicaid healthcare fraud can take many forms, including:
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. Falsifying records to meet or continue to meet the conditions of participation; this includes the alteration of dates, the forging of physician signatures, and the adding of additional information after the fact;
7. Increasing units of service;
8. Billing procedures over a period of days when all treatment occurred during one visit i.e. split billing;
9. Laboratory unbundling – in this scenario, tests and other services that are automatically performed as a panel, group or set, should be billed as a single service. When a provider breaks these services out of the bundled group and bills them individually, the provider is deemed to be “unbundling;”
10. Unlawfully providing kickbacks to healthcare providers in exchange for referrals or prescriptions.
TRICARE
TRICARE (f/k/a CHAMPUS), is the component agency of the U.S. Department of Defense that administers and supervises the healthcare program for certain military personnel and their dependents. TRICARE contracts with a fiscal intermediary that receives, adjudicates, processes and pays healthcare claims submitted to it by TRICARE beneficiaries or providers.
Fraud against the TRICARE program can take many forms, including:
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. Falsifying records to meet or continue to meet the conditions of participation; this includes the alteration of dates, the forging of physician signatures, and the adding of additional information after the fact;
7. Increasing units of service;
8. Billing procedures over a period of days when all treatment occurred during one visit i.e. split billing;
9. Laboratory unbundling – in this scenario, tests and other services that are automatically performed as a panel, group or set, should be billed as a single service. When a provider breaks these services out of the bundled group and bills them individually, the provider is deemed to be “unbundling;”
10. Unlawfully providing kickbacks to healthcare providers in exchange for referrals or prescriptions.
Our Healthcare fraud qui tam attorneys have the knowledge and experience to discuss in depth areas of healthcare fraud, including: Stark law violations, pharmaceutical kickbacks, pharmaceutical fraud, medical device fraud, and medical equipment fraud.
- Healthcare Fraud Contact Form – short intake form for potential clients to complete about healthcare fraud.
- Anti-Kickback Statute – describes the law prohibiting payment of kickbacks in exchange for referrals.
- Stark Statute – describes the law prohibiting physicians from making referrals of patients to entities in which physicians have business relationships.
- Home Healthcare Fraud – describes fraud schemes under the Home Healthcare Reimbursement scheme.
- Ambulance Fraud – describes fraud schemes applicable to ambulance providers.
- SNF Fraud – describes healthcare fraud common to skilled nursing facilities.
- LTACH Fraud– describes healthcare fraud common to long term acute care hospitals.