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Settlement reveals lessons for radiologists

Radiology Administrator's Compliance and Reimbursement Insider, July 1, 2008

Fred Steinberg, MD, of University MRI in Palm Beach County, FL, will pay the federal government $7 million to settle claims of healthcare fraud, according to an April release from the U.S. Attorney’s Office for the Southern District of Florida.

“Based on my knowledge, this case clearly illustrates that the [Office of Inspector General (OIG)] and members of the U.S. Attorney’s Office are serious about enforcing the enacted laws that are designed to prevent these types of practices,” says Larry W. Balmer, CCP, compliance and HIPAA privacy and security officer at Radiology, Inc., in Mishawaka, IN. The settlement resolves charges that:

University MRI did not perform portions of CT scans, even though the procedures were billed and reported to patients’ physicians as if they were done.

The center performed CT scans and ultrasound exams that were not ordered by physicians and were not medically necessary.

The bills submitted by University MRI to Medicare suggested that thousands of CT scans were performed, both with and without contrast; in reality, the CT scans without contrast were not performed.

The center paid financial inducements to physicians for patient referrals, which is prohibited under the Stark Law and the anti-kickback statute. These inducements took the form of medical directorship, clinical research, employment, and facility use and equipment lease agreements that exceeded fair market value or failed to comply with federal law.

Whistleblower action precipitated the claim.

Beware the whistleblower

It’s important to emphasize that this was a whistleblower case, says Leonard Berlin, MD, FACR, president of the Illinois Radiological Society and chair of the radiology department at Rush North Shore Medical Center in Skokie, IL.

A former employee who was suspicious of Steinberg’s activities reported the behavior to the government. As a result of the settlement, the whistleblower will receive $1.75 million as his share of the recovery, according to the release. Under the False Claims Act, private individuals can bring whistleblower actions for fraud on behalf of the United States and collect a share of any proceeds recovered by the suit.

“This case should be a lesson to all radiologists: Participating in any kind of kickback scheme or other shady business arrangements with referring physicians may well draw the attention of the government,” says Berlin.

The cost of defending such charges is enormous. “Even if a radiologist is found not guilty at trial, he or she will have spent tens of thousands of dollars in attorneys’ fees, not to mention the mental and physical stress,” Berlin says.

This settlement demonstrates the need for imaging centers to develop and implement compliance plans and conduct audits for adherence to all government regulations, says Stacie L. Buck, RHIA, CCS-P, LHRM, RCC, vice president of Southeast Radiology Management in Stuart, FL.

Vigilance affects compliance

To encourage compliance, your facility should follow these five tips:

Educate referring physicians on medical necessity. Imaging centers must ensure that they accurately document medical necessity for CT scans and other procedures. Pay strict attention to Medicare rules for ordering diagnostic tests. Don’t perform a test without a documented order from a referring physician, says Buck. 

Educating referring physicians about the rules is crucial. In an attempt to ease the ordering process for referring physicians, a facility might draft standard ordering forms. Beware of this method, Buck says, adding that you should make sure the “standardized requisitions are clear and not leading.”

Ensure coding is correct. Check the radiologist’s documentation against the coding to make sure the code assigned reflects the work performed.

Many times, the heading on the radiologist’s reports reflect the exam selected at order entry, says Buck.

“That is not always consistent with the work that is performed,” Buck says. “Ultimately, [this] can lead to upcoding or downcoding. It is crucial that the work completed for each exam is clearly documented in the radiology report.” 

The American College of Radiology offers guidelines for radiology reports. If followed, all appropriate elements will be captured. “I firmly believe that qualified coders must be utilized to ensure accurate charge capture and coding,” Buck says. 

Act on employee complaints. Reports from the Steinberg case indicate that the whistleblower tried to correct the potentially illegal activities and got fired for his efforts.

“This is an invitation to disaster,” says Balmer. “It is vitally important for owners and managers of practices to realize that firing employees who bring up issues has dire consequences.”

Had Steinberg listened, investigated, corrected the problems, and disclosed the findings to CMS, he could have mitigated his penalties significantly, Balmer says. “I also find it amazing that practices will still resist investing in, and supporting, compliance programs that, when conducted properly, will help find and stop legal pitfalls before they become major headlines,” he says.

Create whistleblower policies. Implement and enforce policies to protect employees from retribution, says Balmer. Non-retaliation policies are part of the OIG’s model compliance programs and demonstrate a clear commitment to compliance. (See our sample policy below.)

Audit operations annually. Each practice must audit its entire operation, from the enterprise level down. Whether done under the auspices of an attorney or via internal or external auditors, audits need to be very comprehensive.

They must recognize legal vulnerabilities so that problem areas can be investigated and corrected before they become situations subject to whistleblower lawsuits, says Balmer.

What’s the bottom line on the Steinberg case? All radiologists “must take great care” to practice strictly according to the law, says Berlin.

Insider sources

Larry W. Balmer, CCP, compliance/HIPAA privacy and security officer, Radiology, Inc., 620 Edison Road, Suite 110, Mishawaka, IN 46545, 574/258-1100, Ext. 284; lbalmer@rad-inc.com.

Leonard Berlin, MD, FACR, president, Illinois Radiological Society; radiology department chair, Rush North Shore Medical Center, 9600 Gross Point Road, Skokie, IL 60076, 847/933-6111; Leonard_Berlin@rsh.net.

Stacie L. Buck, RHIA, CCS-P, LHRM, RCC, vice president, Southeast Radiology Management, 512 SW Street Lucie Crescent, Stuart, FL 34994, 772/600-0324; stacie@southeastrad.com.

Non-retaliation policy: Create a compliant, whistleblower-free facility

Editor’s note: Adapt the following sample policy from the Healthcare Compliance Professional’s Guide to Policies and Procedures to draft your own facility non-retaliation policy. For more compliance policy samples, visit www.hcmarketplace.com/prod-6134.html.

Background

It is noted that one of the requirements of the U.S. Sentencing Commission’s Guidelines for Organizations and the Office of Inspector General’s (OIG) Compliance Guidance is that an organization must provide evidence of a policy of non-retaliation/non-retribution for employees who re-port violations of law, regulations, policies, and the code of conduct.

Purpose

Positive employee relations and morale can be best achieved and maintained in a working environment that promotes ongoing open communication between supervisors and their employees. This includes open and candid discussions of employee problems and concerns.

Policy

We encourage employees to express their problems, concerns, and opinions on any issue, and it is our policy to provide a procedure through which employees can express problems, concerns, and opinions without fear of retaliation or reprisal.

All employees, including supervisors and managers, have an affirmative duty to promptly report actual or potential wrongdoing, including an actual or potential violation of law, regulation, policy, procedure, or the code of conduct. All levels of management will maintain an open-door policy for employees to report problems and concerns.

All reports will be acted upon in an appropriate manner. If the problem is not satisfactorily resolved, the employee may proceed up the supervisory chain to a higher level. The employee hotline is designed to permit any employee to call, anonymously or in confidence, to report problems and concerns or to seek clarification of compliance-related issues.

Employees who, in good faith, report a potential violation of law, regulation, policy, procedure, or the code of conduct will not be subjected to retaliation, retribution, or harassment.

No supervisor, manager, or employee is permitted to engage in retaliation, retribution, or any form of harassment against an employee for reporting a compliance-related concern. Any supervisor, manager, or employee who conducts or condones retribution, retaliation, or harassment in any way will be subject to discipline, up to and including discharge.

Employees cannot exempt themselves from the consequences of wrongdoing by reporting their own wrongdoing, although self-reporting may be taken into account in determining the appropriate course of action.

Procedures

Knowledge of actual or potential wrongdoing, misconduct, or violations of the code of conduct must be immediately reported to management, the compliance office, or the employee hotline.

All managers and supervisors must take aggressive measures to assure their staff members that the organization truly encourages the reporting of problems and that employees will not get into trouble for doing so.

The following actions should be taken:

Senior management should brief subordinate managers on this policy.

Managers must receive and sign a copy of the policy statement on non-retribution/non-retaliation and participate in a brief discussion of the spirit, intent, and importance of this document.

The non-retaliation policy must be posted on employee bulletin boards.

Review with all lower-level managers the proper treatment of employees and the creation of a work environment that permits open communication.

Require all lower-level managers to meet with their employees and complete the above actions.

All managers and employees must understand that any incident in which retaliation or reprisal can be related to an employee raising and/or reporting a problem, either at the organization level or through the compliance program, will not be tolerated. Reports of this nature must be investigated thoroughly and expeditiously, with appropriate disciplinary actions taken, up to and including termination of employment.

Employee responsibilities

Knowledge of misconduct, including actual or potential violations of law, regulation, policy, procedure, or the code of conduct must be immediately reported by employees to the appropriate person, including the:

• Immediate supervisor
• Department manager
• Human resources manager
• Senior administrative officer of the organization
• Compliance officer or employee hotline

Failure to report, or the concealment of knowledge of, a potential violation may result in administrative actions being taken, up to and including termination.

References

The above policy was adapted from the “OIG Compliance Program Guidance for Hospitals,” published by the OIG in a February 23, 1998, Federal Register (FR) notice, and from a January 31, 2005, Supplemental Compliance Guidance (see 70 FR 4858), available at the OIG Web site at http://oig.hhs.gov/authorities/docs/cpghosp.pdf.

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