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On September 7, 2011, Attorney General Eric Holder and Health and Human Services (HHS) Secretary Kathleen Sebelius announced that a Medicare Strike Force operation resulted in a nationwide takedown involving the highest amount of fraudulent Medicare billings in a single Medicare Strike Force takedown. The takedown was operated across eight cities and led to 91 defendants, many of which are health care professionals, being charged for their participation in Medicare fraud schemes which accumulated roughly $295 million in fraudulent billings. Some of the indictments are described below:

  • 45 defendants in Miami were charged for their participation in Medicare fraud schemes which totaled $159 million in fraudulent billings for home health care, mental health services, DME, physical therapy and HIV infusion. One of these schemes allegedly involved recruiters being paid by a mental health care facility to recruit beneficiaries to the center who were ineligible to receive such services.
  • Two defendants in Houston were charged with fraudulently billing $62 million for home health care services and DME. The scheme allegedly involved one defendant who sold beneficiary information to 100 different home health care agencies in the Houston area who then used that information to fraudulently bill Medicare for services that were either medically unnecessary or never provided.
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In May and June 2010, the Office of Inspector General (OIG) performed unannounced site visits at independent diagnostic testing facilities (IDTF) in the Miami and Los Angeles areas. During these visits, OIG discovered that IDTFs in both areas did not comply with certain Medicare standards. For instance, several of the facilities were found to not have a physical facility at the location on file with CMS, as well as other facilities not being open during business hours. Noncompliance with these Medicare standards could lead to the revocation of the IDTF’s Medicare billing privileges along with a number of other administrative actions.

IDTF services have been determined to be vulnerable to fraud and abuse. In 1997, OIG conducted site visits where it discovered that twenty percent of IDTFs were not at the filed CMS location. Additionally, OIG estimated that $71.5 million in improper Medicare payments were disbursed to IDTFs in 2001.

During the unannounced site visits, OIG found that 27 of the 92 Miami-area IDTFs and 46 of the 132 Los Angeles-area IDTFs failed to comply with certain Medicare standards. As a result of these findings, OIG made a number of recommendations to CMS including that CMS periodically conduct announced site visits to IDTFs, take actions against noncompliant IDTFs identified by the OIG site visits, and to immediately stop payments to IDTFs whose billing privileges are being revoked. The OIG also recommended that CMS impose a moratorium on the enrollment of IDTFs in the Los Angeles area. There was no similar recommendation for IDTFs in the Miami area because of the existing special enrollment project that screens new enrollees.

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Nearly a month after the federal government handed down indictments to defendants involved in one of Michigan’s largest prescription drug schemes, the federal government indicted 18 more people allegedly involved in Medicare fraud schemes.  According to a Detroit Free Press article, the U.S. District Court indicted people for their alleged involvement in a number of different health care fraud operations.  One of the charges was handed down to a Troy doctor who allegedly billed for home health services when she was out of the country, as well as for certain services that were physically unable to be completed in a single day.  Another indictment was handed down to an owner of a Detroit company who is being accused of billing Medicare for psychotherapy for numerous beneficiaries who were no longer alive.  Combined, all 18 defendants are accused of billing Medicare for $28 million.

The Medicare Fraud Task Force has no charged 138 people in Detroit with allegations of fraudulent billings totaling nearly $150 million.  According to Maureen Reddy, a Detroit-based FBI special agent, home health fraud is currently the largest type of fraud in the Detroit area.  The recent indictments also establish that Medicare fraud investigations are also expanding to other areas of health care services, such as psychotherapy.

These indictments are another example of the government’s focus on the Detroit area in Medicare and Medicaid investigations.  For more information on Medicare Fraud defense, or assistance with interpreting and understanding Medicare and Medicaid regulations, including the anti-kickback statute, please contact a Wachler & Associates attorney at 248-544-0888.

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The Centers for Medicare and Medicaid Services (CMS) estimates that the Medicare Fee-For-Service Program issues billions of dollars in improper Medicare and Medicaid payments every year. The majority of improper payments are identified through the contractor’s manual review of the provider’s medical records compared with the provider’s claims. Review Contractors request medical records by mailing a paper letter to the provider. To fulfill a request for medical records, the provider typically has only two methods for submitting the records to the Review Contractor- paper mail or fax.

This month, CMS plans to implement Phase 1 of its voluntary Electronic Submission of Medical Documentation (esMD) pilot which will offer providers a more efficient method to deliver medical records to the Review Contractor that made the document request. During Phase 1 of esMD, providers will have the option to electronically submit medical records to the requesting contractor. To keep the medical records and other documentation secure during the electronic exchange between the provider and the contractor, esMD will employ the technology of the Nationwide Health Information Network called CONNECT-compatible gateways.

CMS plans to introduce Phase 2 of esMD in 2012. During this phase, Review Contractors will electronically send documentation requests to providers when the contractor selects their claims for review.

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CGI Federal, RAC for Region B, added three new issues to its CMS-approved issues list for providers in all Region B states.

  • SNF consolidated billing. Services that are billed separately that should be included in the Skilled Nursing Facility Consolidated billing. Consolidated Billing is when services provided during the resident’s stay in a skilled nursing facility (SNF) are bundled into one package and billed by the Skilled Nursing Facility. Under the Consolidated Billing requirement, a Skilled Nursing Facility itself must submit all Medicare claims for the services that its residents receive (except for specifically excluded services).
  • DME while inpatient. The Medicare DMEPOS benefit is intended only for items that a beneficiary uses in his or her home. When a beneficiary is in a Part A inpatient stay, the institutional provider (e.g., hospital) is not defined as a beneficiary’s home for DMEPOS therefore; Medicare will not make separate payment for DMEPOS when a beneficiary is in the institution. The institution is expected to provide all medically necessary DMEPOS during a beneficiary’s covered Part A stay.
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The Centers for Medicare and Medicaid Services (CMS) recently announced it will release a national provider Comparative Billing Report (CBR) focused on Ordering Durable Medical Equipment: Diabetic Supplies. The CBRs will be released to 5,000 providers on August 29, 2011. CMS will make two additional CBR releases to 5,000 providers, which are currently slated for September 7, 2011 and September 15, 2011.

The CBRs are produced by Safeguard Services under contract with CMS and will provide comparative data to help show how these individual providers compare to other providers within the same field. These comparative studies are designed to help providers review their coding and billing practices and utilization patterns, and take proactive compliance measures. Providers should view CBRs as a tool, rather than a warning, as a way to aid them in properly complying with Medicare billing rules. It is also important to understand that CBRs do not contain patient or case-specific data, but rather only summary billing information as a method of ensuring privacy.

If you are a recipient of a CBR on Ordering Durable Medical Equipment: Diabetic Supplies, or are among the other provider types that have been identified to receive CBRs (i.e. physical therapists, chiropractors, ambulance, hospice, podiatry, and sleep studies), please contact a Wachler & Associates attorney at 248-544-0888 to discuss evaluating the CBR analysis and development of an appropriate compliance plan that will reduce audit risks.

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The U.S. Department of Health and Human Services (HHS) recently initiated the Bundled Payments for Care Improvement initiative (Bundled Payments initiative) in an effort to promote better patient health, better care and lower costs. Rather than paying for services separately, the Bundled Payment initiative will bundle payments for services delivered throughout an entire episode of care. Currently, health care providers bill Medicare separately for the services that a beneficiary receives. However, this new initiative seeks to bundle all of the services that a patient receives during a single hospital stay or during recovery from that stay, giving providers greater incentive to better coordinate care with other providers who treat that patient. The Centers for Medicare and Medicaid Services (CMS) believe that this enhanced coordination will reduce unnecessary duplication of services, reduce medical errors, improve patient health, and lower costs.

The new Center for Medicare and Medicaid Innovation recently released its Request for Applications which outlines four approaches to bundled payments. Providers will be afforded flexibility in determining which services will be bundled together, allowing providers of different sizes to decide which bundle payment schemes work best for them. This flexibility is expected to quicken providers’ desire to participate in the Bundled Payments initiative.

According to HHS, the initiative is based on research and successful demonstration projects, such as a Medicare heart bypass surgery demonstration that saved the program $42.3 million and saved patients $7.9 million in coinsurance. The Bundled Payments initiative is viewed as being a step forward in creating the kind of relationship that patients expect their providers to have with each other in an effort to promote better care and payment efficiency.

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Additional Documentation Limits for Medicare Providers

Effective August 22, 2011, the Recovery Audit Contractors are permitted to request up to 35 records every 45 days from health care providers whose previous record request limit was set at 34 additional documentation requests or less. The limit is based on claim volumes only, and the type of claims do not factor into the limit. The maximum number of record requests remains at 300 within 45 days.

http://www.aha.org/aha/content/2011/pdf/11racadrlimits.pdf

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A new bill was recently introduced in the House of Representative in an effort to amend the Health Care Quality Improvement Act of 1996 (HCQIA) to require greater due process rights for health care professionals before any reports are made to the National Practitioner’s Data Bank (NPDB).

According to the Association of American Physicians and Surgeons, the bill, H.R. 2472, seeks to counter hospitals’ current practice of reporting adverse actions taken against physicians regardless whether the physician had been afforded a hearing or adequate notice about the investigation. According to supporters of the bills, rather than granting physicians an opportunity to defend themselves against these actions, hospitals have been bypassing these due process steps and reporting the actions to the NPBD. Reports to the NPBD have proven to be extremely detrimental to physicians and have resulted in a number of physicians losing their careers.

The bill amends 42 U.S.C. 11133(a) to prohibit a review entity from reporting to the NPDB while the physician is under investigation. Also, the bill would bar a hospital’s ability to submit a report to the NPDB before a physician is afforded a hearing and adequate notice of the adverse actions taken by the hospital. The amendment also seeks to change the current immunity power of a professional review body. The current HCQIA grants the professional review body immunity from actions taken against it even if the reviewer fails to follow the guidelines for adequate notice and hearing procedures described in the Act. The new bill may provide a means for a physician to bring a cause of action against a professional review body when the entity has failed to provide the required notice and hearing prior to filing a report to the NPBD or if the entity has conducted a “sham” peer review.

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On July 28, 2011, the U.S. Department of Health and Human Services, Office of Inspector General (OIG) issued an unfavorable advisory opinion regarding two proposals by a supplier of medical supplies, equipment and related services (Supplier) seeking to enter into a contract with a county-operated skilled nursing facility (SNF) to provide such items and services.

Supplier provides medical supplies and equipment to SNFs along with providing related services (e.g. emergency delivery of medical supplies, inventory control and customized packaging). Supplier bills Medicare directly for supplies and equipment covered by Medicare Part B (covered items). For items not covered by Medicare (non-covered items), Supplier bills the SNFs directly and includes a markup which covers the costs of related services, overhead and profit. Supplier acknowledged that the amount paid by Medicare Part B for the covered items is enough to cover the costs related to the services provided to the SNF in connection with the non-covered items.

The SNF solicited bids from suppliers to be the exclusive supplier of covered items and related services to the SNF. The SNF also required all bids to include pricing for the non-covered items and related services. The SNF proposed to purchase the non-covered items at its option. Supplier was one of the bidders and the OIG analyzed two proposed arrangements that Supplier sought to use in the bidding process.

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