Medicare Fraud News, Breaking Headlines and Insight from the Qui Tam Perspective

Nolan & Auerbach, P.A. Managing Partner Marcella Auerbach will speak at the University of Miami 2011 Law Review Symposium on Friday February 18, 2011. Ms. Auerbach will discuss the topic of health care fraud during the opening panel discussion. She will be joined in her health care fraud panel by David Hyman, Richard W. and Marie L. Corman Professor of Law at University of Illinois College of Law, Joan Krause, Professor of Law at University of North Carolina School of Law, and Eric Bustillo, former Assistant U.S. Attorney and current Regional Director of the Miami Office of the Securities & Exchange Commission.

The Symposium will focus on Corporate Crime and Compliance. Panelists will speak on a range of topics, from health care fraud to the Sarbanes-Oxley Act, to the criminalization of corporate behavior. Other presenters include keynote speaker Robert S. Bennett, co-chair of White Collar at Hogan Lovells, Professor John Coates of Harvard Law, Professor Vic Khanna of Michigan Law, and Professor Jennifer Arlen of NYU Law.

Ms. Auerbach is a respected attorney at the national whistleblower law firm of Nolan & Auerbach, P.A. She is a former federal prosecutor who spent more than twenty-five years at the United States Department of Justice. She has extensive experience in prosecuting corporate providers for health care fraud, Anti-kickback and Stark Law violations, FDA violations, and Medicare fraud.

For more information about qui tam law and Medicare fraud, contact Nolan and Auerbach, P.A.

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Two St. Louis-based hospital systems have agreed to shell out more than $2.2 million to quiet allegations that they submitted false Medicare claims for routine foot care procedures. Under the terms of the settlement, St. John’s Mercy Health System and St. John’s Health System have agreed to close the foot clinics and to pay the United States $2.2 million to resolve claims that six system hospitals violated the False Claims Act by submitting claims to Medicare for routine foot care that were not covered by Medicare. Notably, this was a government-initiated False Claims Act case.

While the government was able to piece together this case without the assistance of a whistleblower, the vast majority of False Claims Act recoveries originate from a qui tam action. Indeed, according to recent US Justice Department statistics, nearly 80% of all recoveries in the past year were from qui tam lawsuits.

For more information about qui tam law and Medicare fraud, contact Nolan and Auerbach, P.A.

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While investigating a doctor who reportedly implanted hundreds of potentially medically unnecessary stents, Senate investigators may have stumbled across a troubling nationwide practice that drains funds from government health care programs and needlessly places patients’ lives at risk. In their released report, Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Chuck Grassley (R-Iowa) not only detail the relationship between this doctor and a medical device manufacturer, but they spotlight a possible pattern of wasteful, medically unnecessary stent implantations.

In this particular case, a Maryland doctor reportedly implanted nearly 600 potentially medically unnecessary stents from 2007 through mid-2009 at St. Joseph Medical Center in Towson, Maryland. According to the Senators’ report, the questionable stent implantations cost the Medicare program $3.8 million during that period.

The Senators especially took note of the relationship between this wayward doctor and the manufacturer of stents, Abbott Laboratories. The report noted that Abbott placed the doctor on its “Project Victory” list of top stent volume cardiologists and paid for at least two social events at the doctor’s home, including a barbeque and crab dinner, in 2008.  After St. Joseph Medical Center barred the doctor from practicing, Abbott Labs hired the doctor to promote and prepare safety reports on its stents in China and Japan.

All too often, pharmaceutical and medical device manufacturers will improperly leverage their relationships with doctors to drive up the companies’ bottom lines. As seen in several recent False Claims Act settlements, these companies will shower doctors with lavish gifts, lofty “Key Opinion Leader” titles, and mounds of cash, all with the intention of increasing prescriptions for their medical products.

The Senators’ findings are a good reminder that all medical specialties are considered fair game when it comes to the bribes of dishonest drug and medical device makers. Unfortunately, most of these practices go undetected, to the detriment of patient safety and the Medicare Trust Fund. However, when a courageous individual steps forward to shine a light on these practices, a clear message is sent to the companies that their profits are not more important than the well-being of the American people.

For more information about qui tam law and Medicare fraud, contact Nolan and Auerbach, P.A.

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Last year, Congress amended the federal False Claims Act to close a “finders’ keepers” loophole, which had permitted health care providers to keep Medicare and Medicaid overpayments. Earlier this year, as part of the Health Care Reform Legislation, Congress set a 60-day time limit for providers to return these overpayments. Specifically, Section 6402 of the Patient Protection and Affordable Care Act gives providers a maximum of 60 days after an overpayment is identified to report it, return it, and explain in writing the reason for the overpayment. Thus, an overpayment retained longer than 60 days is now considered a false claim under the FCA.

FCA liability is triggered not by the receipt of overpayment but, instead, by the decision to retain an overpayment. In turn, while these amendments are not explicitly retroactive, potential FCA liability attaches to funds received prior to the amendments.

If you are aware of a health care provider who has made the conscious decision to keep a Medicare or Medicaid overpayment past 60 days, you may receive a substantial reward under the False Claims Act.

For more information about qui tam law and Medicare fraud, contact Nolan and Auerbach, P.A.

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Recently, Nolan & Auerbach, P.A. Partner Joseph E. B. “Jeb” White was a guest lecturer during the opening session of the George Washington University Healthcare Corporate Compliance Program. This one-of-a-kind program provides a comprehensive corporate compliance education for current or aspiring corporate compliance officers. For the eighth time, Mr. White was the lone speaker from the qui tam community.

Oftentimes, there is an antagonistic relationship between compliance officers and the qui tam community. However, compliance officers are on the frontlines of the fight against Medicare fraud, so it is important to educate them about the available anti-fraud laws, including the federal False Claims Act and its qui tam provisions. Instead of turning a deaf ear to compliance efforts, the qui tam community could play an active role in stopping fraud before it happens.

On the flip side, compliance organizations have been slow to reach out to the qui tam community, fearful that educating compliance officers about whistleblower laws will only incite more qui tam actions. After years of working with compliance officers, Mr. White has noted that the opposite is actually true—educated compliance officers are more likely to diffuse potential qui tam actions, simply because they listen to employees who raise concerns about Medicare fraud. All too often, however, compliance officers alienate, isolate and humiliate concerned employees, pushing these employees to look outside of the corporate structure for support and remediation.

In a very real sense, the False Claims Act qui tam mechanism acts as a safety net for those frustrated employees who are unsuccessful in getting the attention of compliance officers. Moreover, for those compliance officers who appropriately act on fraud concerns and still run into corporate roadblocks, the FCA safety net is there for them, too.

For more information about qui tam law and Medicare fraud, contact Nolan and Auerbach, P.A.

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“Where there’s smoke, there’s usually fire.” Law enforcement applies this age-old adage when it focuses investigative efforts on suspicious activity. However, according to a recently released HHS-OIG report, the Centers for Medicare & Medicaid Services (CMS) and its contractors have not been zeroed in on health care providers who have repeatedly submitted incorrect bills to the Medicare program.

Last year, CMS compiled the error-rate data from fiscal years 2005 through 2008 from two specific programs, the Hospital Payment Monitoring Program (HPMP) and the Comprehensive Error Rate Testing (CERT) program. The results spotlighted a number of “error-prone” health care providers who regularly submitted incorrect claims to the Medicare program. In fact, CMS specifically identified a total of 740 providers who were especially “error-prone,” defined as having at least one error per year during the examination period.

As revealed in the report, OIG discovered that CMS never used this data to further examine the billing habits of these error-prone providers. Moreover, Recovery Audit Contractors and Program Safeguard Contractors also did not focus on error-prone providers, as CMS did not share the HPMP and CERT error-rate data.

In its final recommendation, OIG said that CMS should use error-rate data to focus on error-prone providers, share the data with all its contractors, and require error-prone providers to develop and implement corrective action plans.

In short, when CMS detects smoke, it should look to see if there’s a fire.

For more information about qui tam law and Medicare fraud, contact Nolan and Auerbach, P.A.

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A Southern California hospital, El Centro Regional Medical Center, has agreed to pay $2.2 million to settle an FCA qui tam action, alleging that the hospital fraudulently inflated its charges to Medicare patients to obtain larger reimbursements from the federal health care program.  Specifically, the whistleblower alleged that the hospital submitted false Medicare claims for short inpatient admissions, usually of one day or less, when the services should have been billed on an outpatient “observation” basis or as emergency room visits. The whistleblower will receive $375,000 as his share of the recovery.

All too often, dishonest hospitals pad their Medicare bills by miscoding procedures or by exaggerating the duration of hospitalizations. This misinformation is difficult to detect, unless a hospital insider steps forward to report the true state of affairs. The federal False Claims Act provides an avenue for private citizens who want to halt fraudulent health care billing practices.

For more information about qui tam law and Medicare fraud, contact Nolan and Auerbach, P.A.

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HHS-OIG released the results of an audit it conducted looking into Medicare Parts A and B services billed with dates of service after the beneficiaries’ death. Based on its findings, it estimates that Medicare shelled out over $8.2 million in overpayments for Medicare Part B claims with dates of service after the beneficiaries’ deaths.

Under federal regulations, Medicare only pays for expenses incurred for items or services that were reasonable and necessary. Obviously, because medically necessary services cannot be provided after a beneficiary dies, payments for claims with dates of service after a beneficiary’s death are overpayments.

Notably, while Medicare had already recouped most of the Part A payments prior to the audit, the vast majority of the improper Part B payments were never identified or recovered. Medicare Part B payments cover such expenses as durable medical equipment (DME) and outpatient treatments.

As evident by these findings, the government needs the assistance of whistleblowers to identify fraudulent DME suppliers, who seek to continue billing Medicare well after a patient dies.

For more information about qui tam law and Medicare fraud, contact Nolan and Auerbach, P.A.

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Earlier this week, the federal government unveiled proposed regulations to crack down on Medicare and Medicaid fraud by empowering government officials with the power to stop payments as soon as credible fraud allegations are made.

Currently, improper health care payments continue to pour out of the federal government coffers, even when credible allegations have been raised by a False Claims Act whistleblower. This “pay and chase” approach has cost the government billions of dollars, greatly contributing to the estimated $55 billion in improper payments made each year in the Medicare and Medicaid programs. 

“Suspending payments to a health care provider the second there is a red flag gives the government a chance to catch fraud on the front end,” said Nolan & Auerbach partner Jeb White. “Whistleblowers can play an important role in raising those red flags.”  

These proposed regulations stem from the recent federal Patient Protection and Affordable Care Act (PPACA) legislation.

For more information about qui tam law and Medicare fraud, contact Nolan and Auerbach, PA.

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