Helpful Tips to Speed Up the Medicare Prepayment Review Process

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

For Medicare providers, being notified of an impending audit is not welcome news. Being notified of a prepayment review is even worse. In a prepayment review, the health care provider must submit documentation to the Centers for Medicare & Medicaid Services (CMS) contractor before ever receiving payment. The health care provider will only receive payment (typically months later) if the contractor is satisfied with the provider’s documentation. This can be financially disastrous for the health care provider, who still must pay day-to-day expenses while waiting for a decision.

CMS Contractors.

If you have received notice of prepayment review, you first need to determine the contractor that has initiated the review. CMS contracts with four types of contractors:

– Medicare Administrative Contractors (MACs);
– Comprehensive Error Rate Testing (CERT) contractors;
– Recovery Audit Contractors (RACs); and
– Zone Program Integrity Contractors (ZPICs).

Both the Medicare Administrative Contractors (MACs) and Zone Program Integrity Contractors (ZPICs) can initiate prepayment reviews.

MAC Prepayment Reviews.

MACs will initiate prepayment reviews of health care providers suspected of improper billing for services. If the MAC detects anything resembling fraud during the process, the prepayment review can extend for up to a year or more. However, MACs will generally terminate the prepayment review when the health care provider demonstrates a pattern of correct billing. Health care providers who are notified of a MAC prepayment review should consult with an experienced health care attorney from the beginning of the process. An experienced health attorney will be able to assist the health care provider to ensure everything is in place for a speedy prepayment review.

ZPIC Prepayment Reviews.

A MAC may refer a health care provider to a ZPIC for a benefit integrity prepayment review if they suspect fraud. A ZPIC can also initiate a benefit integrity prepayment review based on data analysis.  Unlike MACs, ZPICs generally are less willing to communicate with health care providers about the prepayment review.

Additionally, there are different time limitations for a benefit integrity prepayment review. The MAC prepayment review is governed by Medicare Manual provisions that stipulate a maximum length of time on a prepayment review. However, a benefit integrity prepayment review can last indefinitely, if the basis for the review is not timely and properly addressed by the health care provider.

Further, ZPICs make fraud referrals to the Department of Health and Human Services (HHS) Office of the Inspector General (OIG). Thus, health care providers should view ZPIC correspondence as the start of a potentially larger investigation. An experienced health care attorney should be contacted immediately after a health care provider receives any contact from ZPIC.

How to Accomplish a Speedy Review.

In many cases, the health care provider will be on Medicare prepayment review until its billing accuracy reaches a certain percentage. However there are other steps to help speed up the Medicare prepayment audit process.

1.  Read all Correspondence from the Contractor Carefully.

Pay close attention to all correspondence sent by the contractor. Make a note of the due date given and make sure your response is sent well within the time limits. Denials will usually occur if a response is not received by the given deadline. Also be sure that you send your response to the correct office.

2.  Be Familiar with Local Coverage Determinations (LCDs).

You should read and be familiar with any and all applicable local coverage determinations (LCDs) and national coverage determinations (NCDs) for any codes, services, supplies or equipment you are billing.

3.  Contact an Experienced Health Care Attorney Immediately.

A health care attorney who is experienced in prepayment reviews will be able to help you file a proper response in a timely fashion. An attorney will also be able to help find out additional information on why you have been placed on prepayment review and exactly what documentation the auditor is looking for. Alternatively, a health care consultant who has actual experience in working on Medicare cases and who has been an expert witness in Medicare hearings may be able to assist, as well.

4.  Contact the Contractor Responsible for the Review.

After you have consulted with an attorney, schedule a call with the contractor responsible for your prepayment review. During the call learn as many details about the audit as you can and find out what the reviewer wants in the documentation.

However, do not:
a. Argue with the auditor.
b. Berate or demean the auditor.
c. Challenge the auditor’s knowledge, competence or credentials.
d. Ask the auditor to prove anything to you.
e. Demand to speak to the auditor’s supervisor.

5.  Do Not File Duplicate Claims.

Keep track of all requests for additional documentation and when they were received. Do not think that you need to file another claim for the same items just because you have not received a response as quickly as other claims where additional documentation was not requested. If you provide duplicate claims, the contractor’s decision can be delayed.

6.  Organize all Submissions and Results.

You must keep track of the date you receive the document request for a claim, the date you submitted the documentation for review, the result of the audit and the date the result was received. This will help you realize how quickly claims are reviewed. If a one claim’s review has taken longer than the others you’ve submitted, you can contact the reviewer to make sure they have received the claim and everything is in order.

7.  Follow-up with the Contractor for Feedback.

Keep in contact with the contractor throughout the review. This will help to maintain the relationship you initiated after first receiving notice of the prepayment review. This will also help you keep track of any issues and resolve them. Be sure to discuss how you can improve your claim submissions to meet the standards of your particular reviewer.

Don’t Wait Until It’s Too Late; Consult with a Health Law Attorney Experienced in Medicare and Medicaid Issues Now.

The attorneys of The Health Law Firm represent health care providers in prepayment reviews. They also represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other healthcare providers and institutions in Medicare and Medicaid investigations, audits, recovery actions and termination from the Medicare or Medicaid Program.

For more information please visit our website at www.TheHealthLawFirm.com or call (407) 331-6620 or (850) 439-1001.

Sources:

Baird, Jeff. “Q&A with Jeff Baird: How to Prepare for and Survive Prepayment Reviews.” Home Care. (Sept. 13, 2010). From http://homecaremag.com/news/prepayment-review-faq-20100913/

Greene, Stephanie Morgan. “5 Steps to Get Off Pre-Payment Audit – Quickly!” Harrington Managment Group. (Mar. 18, 2011). From
http://homecaremag.com/news/prepayment-review-faq-20100913/

About the Author:  George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

Tag Words: prepayment audit, prepayment review, Medicare audits, Medicare, Centers for Medicare & Medicaid Services, CMS, RAC, Recovery Audit Contractor, ZPIC, Zone Program Integrity Contractor, MAC, Medicare Administrative Contractor, CERT contractor, Comprehensive Error Rate Testing contractor, overpayment, prepayment reviews, First Coast Service Options, Medicare contractor, Medicare fraud, Medicare investigation, Medicare overbilling, OIG

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 2018 The Health Law Firm. All rights reserved.

Walgreens Reaches Settlement in False Claims Act Case

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Walgreens has reached a $7.9 million settlement with the United States and participating states that resolves allegations that Walgreens violated the False Claims Act. The DOJ announced the settlement on April 20, 2012. To view the DOJ’s press release concerning the settlement with Walgreens, click here. To view the False Claims Act, click here.

Walgreens Allegedly Offered Illegal Inducements to Medicare and Medicaid Beneficiaries.

The settlement was reached after Walgreens was accused of offering illegal inducements to beneficiaries of government health programs (Medicare, Medicaid, the Federal Employees Health Benefits Program (FEHBP), and TRICARE ). Walgreens allegedly offered gift cards to government health program beneficiaries when they transferred a prescription from another pharmacy to Walgreens. The government maintains that such inducements are a violation of state and federal laws.

Walgreens Pays Back Individual State Medicaid Programs.

Since the initial settlement was announced by the DOJ, Walgreens has begun to pay back individual state Medicaid programs that were impacted by the alleged inducements. State and federal laws prohibit such inducements to buy services and goods provided under Medicaid. Walgreens is now paying the states for prescription claims it submitted for reimbursement to Medicaid that were a result of the alleged inducements. Some of the states involved include California, Indiana, Michigan, and Missouri.

Whistleblowers Initiated Government Investigation of Walgreens’ Gift Card Inducements.

The allegations were brought to the government by two whistleblowers. Two separate whistleblower lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act and state False Claims Act statutes. The whistleblowers will receive $1,277,172 from the United States for their role in filing the qui tam actions.

Contact Health Law Attorneys Experienced with False Act Claims Cases.

The Health Law Firm represents physicians, medical practices, pharmacists, pharmacies, and other health provider in investigations, regulatory matters, licensing issues, litigation, inspections and audits involving government health programs (Medicare, Medicaid, TRICARE). The Health Law Firm also represents health providers in False Claims Act cases.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Sources Include:

Cohen, Bryan. “Whistleblower Lawsuits Against Walgreens Settled.” LegalNewsline. (June 12, 2012). From: http://www.legalnewsline.com/news/236427-whistleblower-lawsuits-against-walgreens-settled

Department of Justice, Office of Public Affairs. “Walgreens Pharmacy Chain Pays $7.9 Million to Resolve False Prescription Billing Case.” Department of Justice. (April 20, 2012). Press Release. From: http://www.justice.gov/opa/pr/2012/April/12-civ-505.html

About the Author:  George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

Revised Readmission Penalties are Coming Due to Calculation Errors

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Back in August of 2012, I wrote that lower Medicare reimbursement rates were coming to more than 2,000 hospitals around the country due to excessive readmission rates. To see that blog, click here.

In October of 2012, the Centers for Medicare and Medicaid Services (CMS) announced it has discovered errors in its initial calculations. This means, 1,422 hospitals with high readmission rates will lose slightly more money than first expected, according to Kaiser Health News.

Click here to read the entire article from Kaiser Health News.

Hiccup  in Medicare’s Hospital Readmission Reduction Program.

According to Kaiser Health News, the revisions were relatively small, averaging two-hundredths of a percent of a hospital’s regular Medicare reimbursements. Florala Memorial Hospital in Alabama will see the largest increase in its reimbursements, from 0.62 to 0.73 percent.

Originally, Medicare said it would base the penalties on the readmission rates for patients who were discharged from July 2008 through June 2011. According to a notice the CMS published, the mistake happened because the agency accidentally included claims before July 1, 2008, in its evaluations. Click here to see the notice from the CMS.

Program Initiated to Lower Hospitals’ Readmission Rates.

According to CMS, nearly one out of five Medicare patients will return to the hospital within a month of being discharged, these readmissions cost the government $17.5 billion in 2010. Medicare has estimated, with this program, it will recoup about $280 million from hospitals where too many patients return.

To see an updated list of hospital penalties, click here.

Don’t Wait Until It’s Too Late; Consult with a Health Law Attorney Experienced in Medicare and Medicaid Issues Now.

The attorneys of The Health Law Firm represent healthcare providers in Medicare audits, ZPIC audits and RAC audits throughout Florida and across the U.S. They also represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other healthcare providers and institutions in Medicare and Medicaid investigations, audits, recovery actions and termination from the Medicare or Medicaid Program.

For more information please visit our website at www.TheHealthLawFirm.com or call (407) 331-6620 or (850) 439-1001.

Comments?

What do you think about this story? Does this error by the CMS leave you jaded about the program? Leave any thoughtful comments below.


Sources:

Rau, Jordan. “Medicare Revises Hospitals’ Readmissions Penalties.” Kaiser Health News. (October 2, 2012). From: http://www.kaiserhealthnews.org/Stories/2012/October/03/medicare-revises-hospitals-readmissions-penalties.aspx

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.

Copyright © 1996-2012 The Health Law Firm. All rights reserved.

Tips for Responding to a Medicaid Audit

6 Indest-2008-3By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Should you find yourself, your facility or your health practice the subject of a Medicaid audit by your state Medicaid agency or audit contractor, there are a few things you should know.

The most important thing is that just because you are being audited, it does not mean that you or your business has done anything wrong. State and federal governments conduct audits for many different reasons. Typical reasons include: special audits of high-fraud geographic areas, auditing of particular billing codes, randomly selected provider auditing, and complaints of possible fraud.

Medicaid Audits in Florida.

The Agency for Health Care Administration (AHCA), Office of Inspector General (OIG) and Bureau of Medicaid Program Integrity are the Florida agencies responsible for routine audits of Medicaid health care providers to ensure that the Medicaid Program was properly billed for services. Health care professionals receiving the greatest amounts of Medicaid payments are also the ones most likely to be audited. These include pediatricians, Ob/Gyns, family practice physicians and dentists. The Medicaid audit usually requests information in a questionnaire that the medical practice is required to complete, as well as a request for copies of medical records (including x-rays and other diagnostic studies) on the list of Medicaid patients selected for the audit.

If AHCA determines that Medicaid overpaid for services, it will use a complex mathematical extrapolation formula to determine the repayment amount. The amount of the repayment to the Medicaid Program can be considerably greater than (30 to 100 times as much as) the actual amount of overpayment disclosed by the sample of records audited. Additionally, fines and penalties can be added by the Medicaid Program. However, you can eliminate or reduce the amount of any such repayment by actions taken both before and during the Medicaid audit.

How to Know If You Are the Subject of an Audit.

An audit will usually begin with the provider receiving an initial audit request, usually by letter or fax. This request will serve to notify the recipient that it is the subject of an audit. The initial letter will not always identify the reason for the audit. What it will contain, however, is a list of names and dates of service for which the auditors want to see copies of medical records and other documentation.

This stage of the process is crucial because it is the best opportunity to control the process. Once the records are compiled and sent to the auditor, the process shifts and you are now going to have to dispute the auditor’s findings in order to avoid a finding of overpayment.

The biggest mistake that someone who is the subject of an audit can make is to hastily copy only a portion of the available records and send them off for review. The temptation is to think that since the records make sense to you, they will make sense to the auditor. Remember, the auditor has never worked in your office and has no idea how the records are compiled and organized. This is why it is so important to compile a thorough set of records that are presented in a clearly labeled and organized fashion that provides justification for every service or item billed.

Read the Audit Letter Carefully.

On top of the letter notifying you of the audit, AHCA will also supply you with a list of patients to be sampled. A standard sample will include a list of anywhere from 30 to 150 patient names, depending on the size of the practice. Regular audits routinely request 30 to 50 patient records. The audit letter will also include a questionnaire to be completed (Medicaid Provider Questionnaire) and a “Certification of Completeness of Records” form to complete and return with the copies of the patient records. (Please note: this will be used against you in the future if you attempt to add to or supplement the copies of the records you provided).

Compiling a Response to an Initial Audit Request.

The following are steps that you should take in order to compile and provide a set of records that will best serve to help you avoid any liability at the conclusion of the audit process:

1. Read the audit letter carefully and provide everything that it asks for. It’s always better to send too much documentation than too little.

2. If at all possible, compile the records yourself. If you can’t do this, have a compliance officer, experienced consultant or experienced health attorney compile the records and handle any follow-up requests.

3. Pay attention to the deadlines. If a deadline is approaching and the records are not going to be ready, contact the auditor and request an extension before it is due. Do this by telephone and follow up with a letter (not an e-mail). Send the letter before the deadline.

4. Send a cover letter with the requested documents and records explaining what is included and how it is organized as well as who to contact if the auditors have any questions.

5. Number every page of the records sent from the first page to the last page of documents.

6. Make a copy of everything you send exactly as it is sent. This way there are no valid questions later on whether a particular document was forwarded to the auditors.

7. Send the response package using some form of package tracking or delivery confirmation to arrive before the deadline.

Compiling all of the necessary documentation in a useful manner can be an arduous task. If you find that you cannot do it on your own, or that there are serious deficiencies in your record keeping, it is recommended that you reach out to an attorney with experience in Medicaid auditing to assist you in the process.

Contact Health Law Attorneys Experienced in Handling Medicaid and Medicare Audits.

The Health Law Firm’s attorneys routinely represent physicians, medical groups, clinics, pharmacies, durable medical equipment (DME) suppliers, home health agencies, nursing homes and other healthcare providers in Medicaid and Medicare investigations, audits and recovery actions.
To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Comments?

Have you ever been the subject of a Medicaid audit? What was the process like? Please leave any thoughtful comments below.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 1996-2012 The Health Law Firm. All rights reserved.

Tuomey Healthcare System Ordered to Pay a Reduced $238 Million in Damages for Allegedly Violating Stark Law and False Claims Act

LOL Blog Label 2Lance O. Leider, J.D., The Health Law Firm and George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On September 30, 2013, a federal judge ordered Tuomey Healthcare System in Sumter, South Carolina, to pay $238 million in penalties and fines. The hospital system is accused of paying doctors to refer Medicare patients for treatments at the hospital, according to a number of media sources. The judge granted the government’s request to impose Stark law penalties and False Claims Act fines. The lawsuit against Tuomey was initially filed in 2005, by a whistle-blowing physician.

This corrected fine actually lowers the amount originally ordered by the federal judge, reducing it by $39 million. The original judgement was for approximately $277 million. The reduction in the damages was an acknowledgment that there was an error in the calculation of damages by the judge in the case, who awarded more than the government asked for.

Click here to read the entire ruling from the federal judge.

After the judge announced the fines, Tuomey began preparing to file an appeal, according to an article on Modern Healthcare. It is alleged that the hospital may be looking to settle.

Judge Ordered Hospital System to Pay Fines for Violating Stark Law and False Claims Act.

In a 2005 federal whistleblower or qui tam lawsuit, a Tuomey physician stated that a series of 19 deal contracts with specialty physicians in the area violated the federal ban on compensating doctors based on the volume and value of patient business they refer, according to Modern Healthcare. This is considered to be a financial conflict, illegal under federal laws.

The hospital has twice lost its case in U.S. District Court. A 2010, jury came to a $45 million split verdict that was overturned on appeal. In May 2013, a second jury found the hospital responsible for more violations than in the first trial, deciding that the hospital violated the Stark law and the False Claims Act.

It’s alleged that between 2005 and 2009, Tuomey collected $39 million in fraudulent Medicare claims.

To read the Modern Healthcare article, click here.

Open to Settlement.

According to WLTX, the CBS affiliate in Sumter, South Carolina, Tuomey is filing a notice of appeal. It is expected the hospital system is open to settle. According to a former attorney with the Department of Health and Human Services’ (HHS) Inspector General’s Office (OIG), it will be up to the government if they will settle. The former attorney also stated that with most of the civil litigation division on furlough it might take some time.

Complying with Stark and Other Anti-Fraud Laws.

The federal government has several tools in its toolbox to combat Medicare fraud. Among those are the Stark Act, Anti-Kickback laws, and Civil Monetary Penalty Laws. Each of these typically focuses on a particular type of behavior that is prone to abuse by health care providers.

Primarily, the Stark laws exist to combat the problems that can arise from physician self-referrals. Self-referrals are cases in which a physician orders a test or service and refers the patient to a provider in which the referring physician has a financial interest. This second provider will then bill Medicare for the service, essentially allowing the referring physician to cash in twice. Click here to read our previous blog on compliance with the Stark law.

Paying Kickbacks or Providing Things of Value in Exchange for Patient Referral Now Recognized as Basis for False Claims Act Cases.

U.S. v. Tuomey is just one of several different cases that has recently been decided that allows qui tam or whistleblower recoveries based on providing kickbacks for patient referrals. “Kickbacks” can include any thing or service of value. It can include, for example, tickets to ball games, free meals, sets of surgical scrubs, gift cards, appliances and free medical supplies. A “referral” can include an actual referral of a patient, a consultation to another physician, an order for x-rays, labs or other diagnostic testing, a prescription for medication, medical equipment or other supplies or services, an order for home health or nursing home services or other medical services.

It is the giving of something of value in exchange for the referral that violates the Stark Act and, many times, state laws. The theory is that this unnecessarily increases the amount of medical services that the government pays for without there being any actual medical need for them.

Now, under the decision in Tuomey and other cases, the claims for medical services (and equipment) that were submitted when the services (and equipment) were based on kickbacks, are considered to be false claims. Whistleblowers (qui tam plaintiffs or “relators”) can now file False Claims Act suits based on these theories and share in the government’s recovery. For example, and by way of demonstration only, if the person who filed the qui tam case in Tuomey received only 20% of the amount awarded to the government, that individual would receive approximately $47.6 million as their share. This is still big money to some of us.

Contact Health Law Attorneys Experienced in Handling Stark Compliance.

If you are involved in referring or providing DHS it is crucial that your arrangements are reviewed for compliance with Stark and other anti-fraud laws.

Violations of these laws can carry severe financial and criminal penalties. One of the best ways to avoid these sanctions is to have your current or potential arrangement reviewed by an attorney who is experienced in these matters.

The Health Law Firm routinely advises healthcare providers on Stark compliance issues for practitioners and providers of all types of DHS. We can advise you on the legality of a particular arrangement and can assist with remedying any perceived compliance issues.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Comments?

What do you think of this ruling? Please leave any thoughtful comments below.

Sources:

Calson, Joe. “Out-of-Court Settlement for Tuomey may be in te Works Following Ruling Against the System.” Modern Healthcare. (October 1, 2013). From: http://bit.ly/15Lj2uF

United State of America ex rel Michael L. Drakeford, M.D. vs. Tuomey d/b/a Tuomey Healthcare System, Inc. Case Number 3:05-cv-02858-MBS. Federal Judge Order and Opinion. September 30, 2013. From: http://www.thehealthlawfirm.com/uploads/Toumey%20Case.pdf

Santaella, Tony. “Tuomey Healthcare Ordered to Pay $276 Million.” WLTX. (October 1, 2013). From: http://www.wltx.com/news/story.aspx?storyid=251321

About the Authors: Lance O. Leider is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Avenue, Altamonte Springs, Florida 32714, Phone: (407) 331-6620.

George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

 “The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 1996-2012 The Health Law Firm. All rights reserved.

CMS Extends Waivers under the ACO Shared Savings Program

Lance Leider headshotBy Lance O. Leider, J.D., The Health Law Firm

On November 2, 2011, the Centers for Medicare and Medicaid Services (CMS) promulgated the interim final rule on fraud and abuse waivers for Accountable Care Organizations (ACOs) participating in the Medicare Shared Savings Program. The interim rule can be found at 76 Fed. Reg. 67801. The waiver was granted pursuant to the agency’s authority under the Affordable Care Act, specifically, 42 U.S.C. § 1899(f).

You can read our prior blog postings on the ACO waiver programs here.

Normally, interim final rules are only permitted to remain in effect for a maximum of three years (see 69 Fed. Reg. 78422). CMS regulations require the agency to publish a final rule within three years of a proposed or interim final rule. As the interim final rule is set to expire on November 2, 2014, the agency took advantage of the procedure that allows it to extend the life of the rule for an additional year by publishing a notice explaining the reasons why the regular timeline was not met.

Explanation for the Extension.

CMS stated that it is in the process of preparing a final rule, and allowing the interim final rule to expire would create a great deal of legal uncertainty for ACOs currently participating in the Shared Savings Program. According to CMS, this uncertainty has the potential to disrupt ongoing ACO business, plans, and operations.

Ultimately, CMS has learned through the course of its operation of the Shared Savings Program that certain modifications to the program are necessary. Although these modifications are not yet defined completely, CMS nevertheless believed the prudent course of action was to maintain the status quo during the rule making process.

Check back with us for updates on the process and any further information as the final rule is developed.

Comments?

Have you considered joining an ACO? Why or why not? Please leave any thoughtful comments below.

Contact Health Law Attorneys Experienced With Healthcare Business Practices.

The Health Law Firm routinely represents physician groups and practices with issues involving establishing, licensing, selling, merging, and intergroup affiliation. If you are considering establishing an ACO or have been approached to become a participant in one, you can contact The Health Law Firm at (407) 331-6620 or (850) 439-1001 or you can visit our website at www.TheHealthLawFirm.com.

About the Author: Lance O. Leider is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Avenue, Altamonte Springs, Florida 32714, Phone: (407) 331-6620.

The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.

Copyright © 1996-2014 The Health Law Firm. All rights reserved.

WellCare Health Plans Reaches Settlement in False Claims Act Case

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

WellCare Health Plans Inc.(WellCare) has reached a $137.5 million settlement with the federal government and nine states. The settlement resolves four lawsuits alleging violations of the False Claims Act.

WellCare is based in Tampa, Florida. The company provides managed health care services for approximately 2.6 million Medicare and Medicaid beneficiaries across the United States.

Lawsuits Allege WellCare Submitted False Claims to Medicare, Medicaid Programs.

The lawsuits allege that WellCare submitted false claims to Medicare and Medicaid programs. WellCare allegedly falsely inflated the amount it claimed to be spending on medical care. Allegedly, this was done in order to avoid returning money to Medicaid and other programs in various states, including the Florida Medicaid program and Florida Healthy Kids program. WellCare also allegedly knowingly retained overpayments it had received from Florida Medicaid for infant care. Furthermore, WellCare allegedly falsified data that misrepresented the medical conditions of patients and the treatments they received.

WellCare to Pay the United States and Nine Individual States in Settlement.

WellCare’s settlement requires the company to pay the United States and nine individual states $137.5 million. The nine states are Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Missouri, New York, and Ohio. The settlement also requires WellCare to pay an additional $35 million if the company is sold or experiences a change in control within three years of the agreement.

Whistleblowers Share in Settlement.

The four lawsuits against WellCare were filed by whistleblowers under the qui tam provisions of the False Claims Act. The qui tam provisions allow individuals to file lawsuits on behalf of the United States and share in any recovery.

The whistleblower whose qui tam complaint initiated the government’s investigation will receive approximately $20.75 million. The other whistleblowers will share approximately $4.66 million and will also be entitled to receive an additional share of any contingency payment.

Contact Health Law Attorneys Experienced in False Claims Act Cases.

The Health Law Firm represents physicians, medical practices, pharmacists, pharmacies, and other health provider in investigations, regulatory matters, licensing issues, litigation, inspections and audits involving government health programs (Medicare, Medicaid, TRICARE). The Health Law Firm also represents health providers in False Claims Act cases.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Sources Include:

Kutscher, Beth. “WellCare Agrees to Pay Over $137.5 Million in Settlement.” Modern Healthcare. (Apr. 3, 2012). From: http://www.modernhealthcare.com/article/20120403/NEWS/304039975#ixzz1yAklA7rutrk=tynt

U.S. Department of Justice, Office of Public Affairs. “Florida-Based WellCcare Health Plans Agrees to Pay $137.5 Million to Resolve False Claims Act Allegations.” U.S. Department of Justice. (Apr. 3, 2012). From: http://www.justice.gov/opa/pr/2012/April/12-civ-425.html

Voreacos, David. “WellCare to Pay $137.5 Million to Settle False Claims Case.” Bloomberg News. (Apr. 3, 2012). From: http://www.bloomberg.com/news/2012-04-03/wellcare-to-pay-137-5-million-to-settle-false-claims-case-1-.html

About the Author:  George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

CVS Possibly Under Investigation for Medicare Fraud

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

The Office of Inspector General (OIG) for the U.S. Department of Health and Human Services (HHS) has reportedly launched an investigation into CVS’ practice for refilling prescriptions. According to an article in the Los Angeles Times, authorities are looking into reports that CVS has been refilling prescriptions and submitting insurance claims without patients’ permission. The Los Angeles Times article, released October 12, 2012, names an official with knowledge of this matter as the source.

We want to emphasize that this is from an unconfirmed news story. The government rarely announces investigations of specific subjects ahead of time.

Click here to read the entire article from the Los Angeles Times.

CVS Has Not Been Contacted By the Government About an Investigation.

A related article in Reuters states that CVS said it has not been contacted by the government about the investigation. The pharmacy also said, as a policy, the company does not condone unauthorized refills. Officials said to allow unauthorized prescription refills could be considered insurance fraud, especially if insurers were not refunded for any drugs rejected by patients.

The probe might be, in part, related to the programs offered by many drugstores that allows a pharmacy to refill prescriptions even before a refill request has been made by the patient.

Click here to read the entire article from Reuters.

So far there is no news from the OIG for the HHS officially confirming this investigation.

Cause for Investigation?

It is unclear to me why there would be any cause to investigate CVS, if Medicare was not being billed until the customer actually picked up the prescription. If the customer fails to pickup the prescription, every drug store I know of restocks the medication after a short period and no one is ever billed for it. It seems that it would be a quick and simple matter for the OIG to check this.

Furthermore, it could also be argued that CVS  is actually promoting good health by this practice. Patients may forget to renew or refill their prescriptions or may fail to notice they are running low.

Two Sanford, Fla., CVS Stores Make Headlines.

On September 12, 2012, the U.S. Drug Enforcement Administration (DEA) revoked the registrations (controlled substance licenses) from two CVS pharmacies in Sanford, Florida. The two pharmacies are no longer able to fill prescriptions for drugs such as oxycodone, Dilaudid, Vicodin, Ritalin and Xanax. This decision was in response to a government crackdown on the distribution of painkillers. Click here to read a blog on this story.

Contact Health Law Attorneys Experienced in Representing Pharmacies and Pharmacists.

The Health Law Firm represents pharmacists and pharmacies in DEA investigations, regulatory matters, licensing issues, litigation, administrative hearings, inspections and audits. The firm’s attorneys include those who are board certified by The Florida Bar in Health Law as well as licensed health professionals who are also attorneys.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Comments?

What do you think of this story? Do you think CVS is doing anything wrong? How is this any different from the practice of many managed care plans mailing out 90 days of medications to its patients at a time? Please leave any thoughtful comments below.

Sources:

Lazarus, David. “CVS Caremark Prescription Refills Under Scrutiny, Source Says.” Los Angeles Times. (October 12, 2012). From: http://www.latimes.com/business/la-fi-lazarus-20121012,0,1032269.column

Alawadhi, Neha, Wohl, Jessica, and Morgan, David. “CVS Unaware of Any Government Prescription Refill Probe.” Reuters. (October 12, 2012). From: http://www.reuters.com/assets/print?aid=USBRE89B19520121012

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

 
“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.

Copyright © 1996-2012 The Health Law Firm. All rights reserved.

Two Separate Lawsuits Against Novartis Pharmaceuticals Corporation Allege Illegal Kickbacks and False Claims

IndestBy George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Novartis Pharmaceuticals Corporation (NPC) is currently fielding two different lawsuits, filed just days apart from each other, by the U.S. Department of Justice (DOJ). The first lawsuit was filed on April 23, 2013, alleging the company gave illegal kickbacks to pharmacists. A second lawsuit was filed on April 26, 2013, alleging illegal kickbacks were paid by NPC to health care providers. According to the DOJ, the government’s complaint seeks damages and civil penalties under the False Claims Act, and under the common law for paying kickbacks to doctors to induce them to prescribe NPC products that were reimbursed by federal health care programs.

Click here to read the entire press release from the DOJ.

NPC Accused of Treating Health Care Professionals to Expensive Dinners, Product Discounts and Fishing Trips.

Both lawsuits allege NPC violated the Anti-Kickback Statute. In the April 23, 2013, complaint against NPC the lawsuit alleges the company gave kickbacks, in the form of rebates and discounts to pharmacies in exchange for the pharmacies’ cooperation in switching patients from competitors’ drugs to NPC products.

The April 26, 2013, lawsuit accuses NPC of paying doctors to speak about certain drugs at events that were allegedly social occasions. Many of the programs were allegedly held in circumstances in which it would be impossible to have a presentation. According to the DOJ, this included fishing trips off the Florida coast and meetings in Hooters restaurants. NPC is also accused of treating health care professionals to expensive dinners. The payments and dinners were apparently kickbacks to the doctors for writing prescriptions for NPC drugs.

Florida Doctors Involved.

The lawsuit alleges at least six Florida doctors of participating in the bogus conferences and taking thousands of dollars in kickbacks, according to the Tampa Bay Times. The doctors are not named or charged in the civil lawsuit.

To read the allegations listed in the lawsuit against Florida doctors, click here for the Tampa Bay Times article.

NPC Denies All Claims.

In a press release, NPC disputes all of the government’s allegations. The pharmaceutical company states that discounts and rebates by pharmaceutical companies are a customary and legal procedure, as recognized by the government. It also addresses the physician speaker programs by saying the programs are also acceptable practices designed to inform physicians about the uses of different types of medicines. Click here to read the entire press release from NPC.

The Law Against Using Bribes in Exchange for Selling a Drug or Service.

For years drug companies have paid doctors to speak about new drugs at educational conferences with other health care professionals. The practice is legal, but considered questionable.

Under the Anti-Kickback Statute, it’s a felony for health care professionals to accept bribes in exchange for recommending a drug or service covered by Medicare, Medicaid, TRICARE or the Department of Veterans Affairs health care program.

Whistleblowers Who Report Fraud and False Claims Against the Government Stand to Receive Large Rewards.

The original complaint against NPC was allegedly filed under the qui tam, or whistleblower, provisions of the False Claims Act by a former sales representative.

Individuals working in the health care industry, whether for hospitals, pharmacies, nursing homes, medical groups, home health agencies or others, often become aware of questionable activities. Often they are even asked to participate in it. In many cases the activity may amount to fraud on the government.

In a two-part blog series on whistleblower/qui tam lawsuits I explain types of false claims, the reward programs for coming forward with a false claim, who can file a whistleblower/qui tam lawsuit, and more. Click here to read the first part of this blog, and click here for the second part.

Contact Health Law Attorneys Experienced with Qui Tam or Whistleblower Cases.

Attorneys with The Health Law Firm represent plaintiffs, patients, health care professionals and health facilities in qui tam or whistleblower cases. We have developed relationships with recognized experts in health care accounting, health care financing, utilization review, medical review, filling, coding, and other services that assist us in such matters.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Comments?

What do you think of these lawsuits? Please leave any thoughtful comments below.

Sources:

Masow, Julie. “Novartis Pharmaceuticals Corporation Disputes Allegations in Two US Government Lawsuits and Looks Forward to a Fair Discussion of the Facts.” Novartis Pharmaceuticals. (April 26, 2013). From: http://www.pharma.us.novartis.com/newsroom/pressreleases/137176.shtml

Davis, Brittany Alana. “Lawsuit: Pharmaceutical Company Gave Kickbacks to Florida Doctors.” Tampa Bay Times. (May 3, 2013). From: http://www.tampabay.com/news/courts/lawsuit-pharmaceutical-company-gave-kickbacks-to-florida-doctors/2119133

Department of Justice. “United States Files Complaint Against Novartis Pharmaceuticals Corp. for Allegedly Paying Kickbacks to Doctors in Exchange for Prescribing Its Drugs.” Department of Justice. (April 26, 2013). From: http://www.justice.gov/opa/pr/2013/April/13-civ-481.html

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

 

The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 1996-2012 The Health Law Firm. All rights reserved.

The American Academy of Family Physicians Releases Third List for Choosing Wisely Campaign

IndestBy George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On September 24, 2013, the American Academy of Family Physicians (AAFP) released its third list of commonly prescribed tests and procedures that may not be necessary. This list is part of the American Board of Internal Medicine (ABIM) Foundation’s Choosing Wisely campaign.

The Choosing Wisely Campaign was initiated to give patients a catalog of procedures, tests and treatments that have been overused, misused or have been identified as ineffective. Since its launch in April 2012, more than fifty (50) medical specialty societies have created lists of procedures, tests and drug treatments that deserve to be questioned before a physician orders them or patients accept them.

The purpose is to help patients become more discriminating about what care they receive. Physicians and health care providers also need to use this information to review the latest research and use that information to help avoid any litigation.

I’ve previously written about the Choosing Wisely campaign. Click here for part one and here for part two.

AAFP’s Updated List of Commonly Prescribed Tests and Procedures That May Not be Necessary.

1. Do not prescribe antibiotics for otitis media in children aged 2-12 years with non-severe symptoms where the observation option is reasonable.

2. Do not perform voiding cystourethrogram routinely in first febrile urinary tract infection in children aged 2-24 months.

3. Do not routinely screen for prostate cancer using a prostate-specific antigen (PSA) test or digital rectal exam. Evidence suggests that PSA-based screening leads to an overdiagnosis of prostate tumors.

4. Do not screen adolescents for scoliosis. Potential harms include unnecessary follow-up visits resulting from false-positive test results.

5. Do not require a pelvic exam or other physical exam to prescribe oral contraceptive medications. Hormonal contraceptives are safe, effective, and well tolerated by most women.

Click here to read the AAFP’s previous recommendations.

Health Care Providers and Professionals’ Responsibility to Patients.

A doctor should have the knowledge, skill, training, and confidence to know when such tests and procedures are not warranted. Also, a health care professional or provider should not be swayed by increasing his/her personal bottom line. Specifically, physicians that work in a fee-for-service setting that rewards doctors for performing more procedures are at risk for ordering unnecessary tests or procedures. If a physician persists in ordering these tests solely for the means of increasing profits, he or she should be penalized. If not, the physician should be able to justify them.

Laws Protect Patients from Unnecessary Testing.

This situation may have the side effect of promoting additional litigation against doctors, healthcare clinics and hospitals that provide the unnecessary tests and procedures. Many states have laws that prohibit unnecessary tests and procedures and sanction those who provide them. For instance, Section 766.111, Florida Statutes, provides a private cause of action by a patient against a health provider who orders or furnishes such “unnecessary” diagnostic tests, but unlike other tort and medical malpractice statutes, it allows the prevailing party in such a case to recover attorney’s fees and costs. This law may by itself promote litigation in the face of the lists of tests produced by the specialty groups in the Choosing Wisely campaign.

Look for More Whistleblower/Qui Tam Cases.

As this list continues to grow, I believe that we will see more qui tam/whistleblower and false claims cases.

Qui tam cases have been brought under the federal False Claims Act for the recovery of Medicare payments from hospitals, physicians, nursing homes, diagnostic testing facilities, clinical laboratories, radiology facilities and many other types of healthcare providers. These cases allege that a false claim was submitted to the government. If the test or procedure was unnecessary, then it seems almost axiomatic that a claim for it is false. The plaintiff bringing such cases receives a percentage of the recovery, which often amounts to millions of dollars in successful cases.

Most states now have similar false claims act or qui tam laws providing similar causes of action and recoveries to individual plaintiffs in the case of state Medicaid payments as well.

Because medical necessity is a requirement for practically every Medicare and Medicaid service, as well as most services paid by private health insurers, the lists provided by the specialty may very well be exhibit one in future lawsuits.

We’ve recently written about a couple of whistleblower/qui tam cases stemming from unnecessary procedures. To read a blog on a group of Florida radiation oncology service providers accused of performing unnecessary and improperly supervised procedures, click here. To read a blog on Winter Park Urology’s settlement over allegations stemming from radiation therapy used to treat cancer patients, click here.

Contact Experienced Health Law Attorneys.

The Health Law Firm routinely represents pharmacists, pharmacies, physicians, nurses and other health providers in investigations, regulatory matters, licensing issues, litigation, inspections and audits involving the Drug Enforcement Administration (DEA), Federal Bureau of Investigation (FBI), Department of Health (DOH) and other law enforcement agencies. Its attorneys include those who are board certified by The Florida Bar in Health Law as well as licensed health professionals who are also attorneys.
To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.

Comments?

As a health care professional or provider what do you think of the Choosing Wisely campaign? Please leave any thoughtful comments below.

Sources:

Hand, Larry. “AAFP Releases Third Choosing Wisely List.” Medscape. (September 25, 2013). From: http://www.medscape.com/viewarticle/811638

Carman, Diane. “Useless, Costly Medical Procedures Targeted by Choosing Wisely Campaign.” Health Policy Solutions. (October 15, 2013). From: http://www.healthpolicysolutions.org/2013/10/15/useless-costly-medical-procedures-targeted-by-choosing-wisely-campaign/

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
Copyright © 1996-2012 The Health Law Firm. All rights reserved.

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