District Court Case: The False Claims Act

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Medicare payments rely heavily on proper coding of medical procedures and services provided during the delivery of care. Those services or processes are typically bundled, and therefore allocated as a bundling payment that receives a set amount of financial compensation for the organization. The Medicare statute maintains that the Secretary of Health and Human Services determines the fee schedule for diagnostics laboratory tests and Medicare regulations state that the hospitals must bill some of the tests as a group (Ohio Hospital Association, et. al. v. Shalala, 1997). The District Court case involved the failure to bundle seven tests, which accounted for higher Medicare reimbursements.
Fraud and abuse per our textbook can occur by unbundling and billing for a battery of services such as the laboratory tests separately as this was the issue referenced in the District Court Order of Ohio Hospital Association, et. al. v. Shalala. It was identified in number two of the footnotes that “Reimbursement was actually provided by a ‘fiscal intermediary,’ which contracts with the government to make determinations regarding coverage and payment (Ohio Hospital Association, et. al. v. Shalala, 1997).” This fiscal intermediary’s accountability in the case would bring about a discussion regarding if this was an innocent mistake, negligent conduct, or
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527). FCA enforces compliance and thorough examination of the claims process regarding providers billings because failure to appropriately comply can result in exclusion from Medicare participation and $10,000 plus fine depending on the situation and damages
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