South Texas Health Care Providers Remain Under Considerable Scrutiny by HEAT Prosecutors and Investigators – Compliance Isn’t Optional – It’s Essential in 2011.

(January 6, 2011):  Three Houston-area residents, one of whom is a physician, were sentenced to prison on January 4^th for their roles in a multi-million dollar durable medical equipment (DME) Medicare fraud scheme.  Each of the three defendants were also ordered to pay restitution to the Federal government, in amounts ranging from $29,052 to $1.4 million.

I.     Background of DME Fraud Case:

According to DOJ, a Houston-area DME company improperly billed Medicare for power wheelchairs and orthotic devices, beginning in 2003 and continuing until late 2009.  In addition to the three co-conspirators sentenced today, a total of eight other individuals were convicted for their participation in the fraudulent scheme.  One of the eight included the owner of the DME company.

At trial, Federal prosecutors were able to show that a variety of fraudulent actions had been taken by members of the group, ranging from the payment of illegal kickbacks to the prescription of medically unnecessary devices.

II.     Medicare Strike Force Efforts to Combat DME Fraud in Texas are Expanding:

Notably, this was just the latest case investigated by members of the DOJ / HHS-OIG / MFCU Health Care Fraud Prevention and Enforcement Action Team (HEAT).  This strike force is responsible for investigating and prosecuting cases throughout South Texas.  As DOJ noted:

“Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 850 individuals who collectively have falsely billed the Medicare program for more than $2.1 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”

Both Federal and State investigators are aggressively targeting non-compliant providers.  South Texas providers who take the time to review and update their current Compliance Plan should also conduct a gap analysis to better ensure that their operational and billing practices fully comply with applicable statutory and regulatory requirements.

Robert W. Liles is Managing Partner at Liles Parker.  Robert and other firm attorneys  have extensive experience representing health care providers in alleged Medicare overpayment and fraud cases.  Should you have questions about our services, give us a call for a free consultation.  We can be reached at 1 (800) 475-1906.

Number of False Claims Act Investigations Being Pursued is Currently at an All Time High . . . and is Likely to Go Even Higher Due to Changes to the False Claims Act Under Health Care Reform

(November 26, 2010):  As set out in a U.S. Department of Justice (DOJ) Press Release issued earlier this week, during Fiscal Year 2010 (ending September 30, 2010), DOJ secured $3 billion in civil settlements and judgments in connection with cases involving fraud against the government.  Notably, $2.5 billion (approximately 83%) of the recoveries were related to health care fraud cases.  According to DOJ, since January 2009, $5.4 billion has been collected under the False Claims Act and returned to Federal programs (such as the Medicare Trust Fund) and / or the Treasury.   As Assistant Attorney General of the Civil Division Tony West reported:

“Under Attorney General Eric Holder’s leadership, our aggressive pursuit of fraud under the False Claims Act has resulted in the largest two-year recovery of taxpayer dollars in the history of the Justice Department. . . Nowhere is this more apparent than in our success in fighting health care fraud. Since January 2009, the Civil Division, together with the U.S. Attorneys’ offices, commenced more health care fraud investigations, secured larger fines and judgments, and recovered more taxpayer dollars lost to health care fraud than in any other two-year period.” (emphasis added).

While the number of False Claim Act cases commenced during the last two years is at an all time high, this number is likely to further grown due to recent changes to the False Claims Act under Health Care Reform.

Pursuant to Section 6402 of the Patient Protection and Affordable Care Act (generally referred to as the “Health Care Reform Act”), Medicare participating providers, including Physicians, Group Practices, Chiropractors, Home Health Agencies, Hospices, Community Mental Health Clinics, and others who bill the identify an “overpayment” must report and return the overpayment, explaining (in writing) how the overpayment occurred within 60 days. As the statute provides:

‘The PPACA states that “[a]ny overpayment retained by a person after the deadline for reporting and returning the overpayment. . . is an obligation [as defined in the False Claims Act.”

Failure to meet this obligation may subject a provider to to monetary penalties of up to $11,000 per claim (in the case, in the form of an “overpayment,” plus treble damages.

As many providers can readily confirm, confirming that an overpayment exists isn’t also that easy, especially in complex cases where a patient has secondary insurance and / or the number of claims processed (as charges, credits and corrections) may be quite large. Additionally, due to the complexity of Medicare coverage and payment rules, two reasonable individuals may disagree as to whether an overpayment is present. In any event, the number of potential whistleblowers (individuals with knowledge of arguable overpayments under Section 6402), will undoubtedly increase.

Health care providers should review their current Compliance Plan to better ensure that internal audit and review mechanisms are in place so that any overpayments can be readily identified and repaid to the government within the 60-day deadline. The decision of where to disclose and return an overpayment, whether to a Medicare Administrative Contractor (MAC), the Department of Health and Human Services – Office of inspector General (HHS-OIG), or to DOJ, may differ depending on the facts.  Depending on the size or complexity of an overpayment, a provider may need to contact legal counsel for advise on how to best handle the alleged overpayment. Due to the 60-day deadline, if legal counsel is to be involved, they must should be contacted as soon as possible.

An effective Compliance Plan case assist in the identification and proper handling of overpayments. If your practice has not already implemented an effective Compliance Plan, it should do so immediately.

Robert W. Liles has worked with a wide variety of heath care providers around the country in connection with False Claims Act and / or False Claims Case.  Should your practice need assistance with compliance or overpayment issues.  For a complimentary consultation, please call: 1 (800) 475-1906.