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Compliance Always the Best Way to Avoid Healthcare Fraud


Three recent examples show how being compliant and meeting medical necessity standards are the key to avoiding fraud enforcement actions.

One only needs to pull up the U.S. Department of Justice (DOJ) website to see that healthcare fraud enforcement is on the rise. Sadly, in one recent week, more than three physicians and other individuals were sent to prison.

The purpose in addressing this issue is to underscore the importance of compliance and reconsidering the temptation to either utilize a higher (and unsubstantiated) code or bill for an item/service not performed.

In Houston, an owner of a durable medical equipment (DME) company billed Medicare and Medicaid for items listed on purchased physician orders without delivering all of the items billed for. The owner "also admitted he gave his billing agent the incorrect coding information so he would receive more money from Medicare and Medicaid for each DME claim." He was sentenced to 81 months in federal prison and ordered to pay $597,865.19 in restitution to CMS.

In Lansing, Mich., a physician was sentenced to 18 months in prision and ordered to pay restitution to CMS totaling $582,912. Here, the physician "signed home healthcare referrals for a home health agency called Moonlite Home Care Inc. …([T]he physician) certified Medicare beneficiaries as homebound, a requirement for receiving home health care, when in fact, [the physician] had never examined or met the beneficiaries as homebound, and they were not homebound." The Medicare Fraud Strike Force is credited with the enforcement.

Finally, The U.S. Attorney’s Office for the Eastern District of Kentucky announced the first case of its kind in Kentucky, whereby a cardiologist pled guilty to making false billing statements in connection with the placement of heart stents. He was the third cardiologist nationwide to be prosecuted for the placement of heart stents and fraudulent billing. In addition, the hospital repaid the government for $256,800 that the physician falsely submitted for reimbursement from CMS between 2009 and 2010. "Under federal law, Medicare and Medicaid reimburse physicians for procedures that are deemed medically necessary. For a cardiac stent procedure to qualify as a medical necessity, it is generally accepted that a patient must have at least 70 percent blockage of an artery and symptoms of blockage." The cardiologist "upcoded" and indicated that he placed stents in patients that had significantly less than 70 percent blockage. Thereby, not meeting medical necessity and submitting fraudulent billing claims to CMS.

Again, these examples underscore the "importance of being earnest." Being compliant and meeting the medical necessity standards can help physicians avoid an adverse enforcement action.

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