jmontone_Module 05 Assignment - Fraud and Abuse121023 Laws (1)
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HIM2410 Module 05 Assignment – Fraud and Abuse Laws
Module 05 Assignment - Fraud and Abuse Laws
Instructions:
Read each scenario and decide if the actions taken by the company are considered
fraudulent. After each scenario, state what law(s)/rule(s) were violated and explain your reasoning.
1.
In June 2018, Healogics, Inc. agreed to pay up to $22.5 million to settle civil FCA allegations that
it knowingly caused wound care centers to bill Medicare for medically unnecessary services.
Healogics, a Florida-based company, manages nearly 700 hospital-based wound care centers
across the country. Medicare covers hyperbaric oxygen therapy (HBO), a modality in which the
entire body is exposed to oxygen under increased atmospheric pressure, as an adjunctive
therapy to treat certain chronic wounds. The settlement resolved allegations that from 2010
through 2015, Healogics knowingly submitted or caused the submission of false claims to
Medicare for medically unnecessary or unreasonable HBO therapy.
Typically, a healthcare provider or organization violates the FCA by knowingly submitting a false
or fraudulent claim to the government or by making a false statement to get the claim approved
or paid. This knowing submission may be proven by showing that the provider or organization
intended to commit fraud, or knew the statement was false and was either deliberately ignorant
of the truth or acted with reckless disregard for the truth when submitting the false statement.
FCA claims are typically brought as qui tam actions, which allow private plaintiffs (technically
referred to as relators) to sue on behalf of the U.S. government and receive a portion of the
recovered funds, if successful. The relator begins the lawsuit on his initiative; however, the
government may decide to intervene in the case and take over the prosecution or may join in
the prosecution with the relator. The government may decide to allow the relator to proceed
with the case on his own without any form of government intervention. Typically, a relator is a
current or former employee of the health care provider or organization who has learned of the
fraud and abuse and wishes to expose the activity. These relators are called whistle-blowers.
Whistle-blowers have included physicians who supervised laboratories and supervisors
responsible for billing, coding, and claims processing procedures. Relators have even included
persons whose insurance benefits were the subject of coverage and payment disputes between
Medicare and third-party payers.
2.
In June 2018, Health Quest Systems, Inc., Health Quest Medical Practice, P.C. ("HQMP''), Health
Quest Urgent Medical Care Practice, P.C., ("HQUC") (collectively "Health Quest''); and Putnam
Health Center ("PHC") entered into a settlement agreement to resolve their FCA liability. From
April 1, 2009 through June 23, 2015, Health Quest submitted claims for evaluation and
management services but did not sufficiently document the services to support the level of
service billed. As a result, the services were billed two levels higher than supported by the
medical record. From April 1, 2011 through August 2014, Health Quest submitted claims for
home health services that lacked sufficient medical records to support the claim, including
documentation of a face-to-face encounter with a physician. From March 1, 2014 through
December 31, 2014, Health Quest subsidiary hospital, PHC, submitted allegedly false claims for
inpatient and outpatient services referred to PHC by two orthopedic physicians. The two
physicians had a direct financial relationship with PHC for providing administrative services and
received compensation from PHC. The United States alleged their compensation exceeded the
fair market value for the services. The United States further alleged that one purpose of the
HIM2410 Module 05 Assignment – Fraud and Abuse Laws
excessive compensation was to induce the above referrals to PHC. Health Quest and PHC agreed
to pay $15.6 million and enter into a 5-year CIA.
violations of the False Claims Act by submitting inflated and otherwise ineligible claims for
payment.
From April 1, 2009 through June 23, 2015, Health Quest submitted claims for evaluation and
management services but did not sufficiently document the services to support the level of
service billed.
As a result, the services were billed two levels higher than supported by the
medical record.
From April 1, 2011 through August 2014, Health Quest submitted claims for home health
services that lacked sufficient medical records to support the claim, including documentation of
a face-to-face encounter with a physician.
From March 1, 2014 through December 31, 2014, Health Quest subsidiary hospital, PHC,
submitted allegedly false claims for inpatient and outpatient services referred to PHC by two
orthopedic physicians, in alleged violation of the Physician Self-Referral Law.
The two physicians
had a direct financial relationship with PHC for providing administrative services and received
compensation from PHC.
The United States alleged their compensation exceeded the fair
market value for the services, and thereby violated the Physician Self-Referral Law, which
prohibits a hospital from billing Medicare for certain services referred by physicians with whom
the hospital has an improper compensation arrangement. The United States further alleged that
one purpose of the excessive compensation was to induce the above referrals to PHC, in
violation of the Anti-Kickback Statute.
“Today’s settlement holds Heath Quest responsible for false billings to federally funded health
care programs, as well as claims tainted by a hospital’s payments to two physicians for
administrative services where it appears that one purpose of those payments was to improperly
induce referrals.
Hospitals and providers must be vigilant to make sure that claims accurately
reflect medical services provided and are supported by sufficient documentation.
We will
continue to investigate whistleblower complaints vigorously to protect public funds,” said United
States Attorney Grant C. Jaquith for the Northern District of New York.
3.
In November 2017, a coder at Livewell Medical Center was investigated during an audit. It was
discovered that the coder was asked by their manager to bill separately for a group of
procedures that would normally be billed under one single comprehensive code in order to
increase revenue for the medical center. The coder did not comply with their manager’s request
and continued to maintain the integrity of the codes.
Unbundling involves submitting separate bills for each component of a procedure instead of
using the proper procedural code for the entire procedure, resulting in a higher reimbursement
rate to the health care provider—for example, billing separately for groups of laboratory tests
performed together in order to receive a higher reimbursement.
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