HHS Overpayment Recoupment Sends a Flag to Physicians

May 26, 2016
Rachel V. Rose, JD, MBA
Rachel V. Rose, JD, MBA

Rachel V. Rose, JD, MBA, advises clients on compliance and transactions in healthcare, cybersecurity, corporate and securities law, while representing plaintiffs in False Claims Act and Dodd-Frank whistleblower cases. She also teaches bioethics at Baylor College of Medicine in Houston. Rachel can be reached through her website, www.rvrose.com.

A recent ruling from the U.S. Court of Appeals emphasizes why it's important for physicians to not cut corners.

The Eleventh Circuit for the U.S. Court of Appeals recently ruled that HHS properly recouped approximately $8.9 million in overpayments.

As has been mentioned in previous articles, there are certain “zones” in the country -Florida and Texas being two of them - where Medicare billing fraud is rampant and both the Department of Justice (DOJ) and HHS have heightened awareness. This scrutiny is not unwarranted.

In late April, the Eleventh Circuit, in an unpublished opinion, upheld that HHS appropriately recovered nearly $9 million dollars from Vitreo Retinal Consultants of the Palm Beaches in West Palm Beach, Fla. for improperly billing Medicare for “multi-dosing” the FDA approved drug Lucentis, which is used to treat age-related macular degeneration.

The practice of “multi-dosing” is the act of using a single vial of a pharmaceutical and, instead of discarding the unused amount pursuant to the FDA approval notice, the provider uses the remaining portion and charges the full price for the vial. Hence, instead of treating one patient and appropriately charging for the pharmaceutical, the providers were treating up to three patients and still charging for an individual vial. In essence, the physician received three times the amount it would have been entitled to receive, if the drug was dispensed according to the label.

The Eleventh Circuit opined that HHS was entitled to reimbursement based upon the following reasons:

• “The very concept of ‘reimbursement' contemplates payment for money that was actually spent.”

• Medicare’s “lawful policy that reimbursement to providers should reflect more-or-less actual expense to the physician” was not arbitrary or capricious.

• The alternative basis for denying reimbursement - extracting multiple doses from a single Lucentis vial was medically unreasonable based upon the FDA-approved label.

In sum, this case serves as a reminder to physicians not to cut corners. As this case espouses, the financial, legal and reputational expenses can be costly.