HCPro.com - Compliance Monitor

New report reveals $47 billion in Medicare fraud

Wed, 18 Nov 2009 05:00:00 GMT

The government paid over $47 million in questionable Medicare claims – nearly three times the amount from last year, according to a new federal report, obtained by The Associated Press (AP).

The improper payments are the largest waste of taxpayer dollars in the $440 billion Medicare program’s 20 year history, according to the report.

According to the AP, the Health and Human Services Department’s stricter documentation requirements caused the increase, not an actual rise in Medicare fraud. The AP reports that in the near future, President Obama will announce new initiatives to defend against Medicare fraud, including the launch of a government Web site detailing healthcare spending and improper payments by various health agencies.

The Obama administration has set its goal of reducing improper Medicare payments at 9.5%. This projected target would save taxpayers a total of $9.7 billion.

Hospice group to pay U.S. $1.83 million in False Claims Act suit

Wed, 18 Nov 2009 05:00:00 GMT

An Oregon hospice will pay the United States over $1.83 million to settle claims that it provided care without obtaining written certifications of the terminally ill, according to a Department of Justice (DOJ) press release.

Kaiser NW, a collective of Kaiser Foundation Hospitals, disclosed to the OIG that between 2000 and 2004, Kaiser NW billed Medicare for its hospice beneficiaries prior to obtaining written certifications for care provided during the initial certification period. According to the DOJ, Medicare hospice care providers must obtain written certification of terminal illness for each hospice beneficiary’s first 90 days of care from the hospice’s medical director and the patient’s attending physician.

The certifications are necessary for Medicare to decide whether hospice care is medically necessary.

Radiologist indicted for fraudulently signing reports

Wed, 18 Nov 2009 05:00:00 GMT

Atlanta radiologist and president of Reddy Solutions, Inc (RSI), Dr. Rajashakher P. Reddy, 39, faces 20 years in prison on federal charges of wire, mail, and healthcare fraud, and obstruction of justice, according to a Department of Justice (DOJ) release.

Reddy’s federal grand jury indictment alleges that RSI provided radiology services to various hospitals that lacked the appropriate full-time radiology coverage.

According to the DOJ, radiologists are required to review film, prepare and sign a report detailing medical conclusions, and transmit the reports electronically to the hospital. From May to 2007 through January 2008, Reddy allegedly signed and submitted thousands of reports in his name without reviewing any film.

The DOJ reports that Reddy’s radiology practice assistants reviewed film and prepared reports with instruction from Reddy to sign and submit under his name. Reddy faces a fine of up to $250,000 for each count of fraud.

Tip: Submitting claims for laboratory services

Wed, 18 Nov 2009 05:00:00 GMT

Your hospital should ensure that all claims for clinical and diagnostic laboratory testing services are accurate and correctly identify the services ordered by the physician (or other authorized requestor) and performed by the laboratory. The OIG recommends that your hospital’s written policies and procedures state that:

The hospital bill for laboratory services only after they are performed
The hospital bill only for medically necessary services
The hospital bill only for tests actually ordered by a physician and provided by the hospital laboratory
The current procedural terminology or Healthcare Common Procedural Coding System code used by the billing staff accurately describes the service ordered
The coding staff submit only diagnostic information obtained from qualified personnel and contact the appropriate personnel to obtain diagnostic information in the event that the individual who ordered the test has failed to provide such information
The hospital document receipt of diagnostic information obtained from a physician or the physician’s staff after receiving the specimen and request for services
Routine audits be conducted to assess your billing compliance with the regulations

This week’s tip was adapted from The Compliance Officer’s Handbook 2^nd Edition. For more information about the book or to order your copy, visit the HCMarketplace.

Nation's largest nursing home pharmacy to pay $98 million for kickback schemes

Wed, 11 Nov 2009 05:00:00 GMT

The nation’s largest nursing home pharmacy, Omnicare Inc., will pay $98 million to resolve allegations that it violated the False Claims Act and participated in several kickback schemes, according to a Department of Justice (DOJ) press release. Drug manufacturer, IVAX Pharmaceuticals, will pay $14 million to resolve allegations that it engaged in kickback schemes with Omnicare.

According to the DOJ, Omnicare allegedly solicited and received kickbacks from drug manufacturer, Johnson & Johnson, in exchange for prescribing Risperdal, an antipsychotic drug, to nursing home patients. Johnson & Johnson allegedly disguised the kickbacks as data purchase fees, educational grants, and fees to attend Omnicare meetings. The DOJ reports that Omnicare also paid kickbacks to nursing homes in order to induce the homes to refer patients to Omnicare.

Omnicare also received $8 million in kickbacks from IVAX in exchange for purchasing $50 million in drugs from IVAX.

Approximately $68.5 million of the settlement will go to the United States and $43.5 million will cover Medicaid program claims by participating states.

False Claims Act suit filed against adolescent psychiatric facility

Wed, 11 Nov 2009 05:00:00 GMT

The United States and Commonwealth of Virginia are intervening in a False Claims Act suit against Medicaid providers Universal Health Services Inc., Keystone Marion LLC, and Keystone Education and Youth Services LLC, reports the Department of Justice (DOJ).

The companies did business as Keystone Marion Youth Center, a facility that receives Medicaid funds to provide psychiatric evaluation and counseling for boys aged 11-17. The lawsuit, filed by several former therapists, alleges the defendants provided poor care to patients, falsified records to cover up violations, and fraudulently billed Medicaid.

The United States’ intervention is in response to the exploitation of the young patients, according to the DOJ.

Minnesota's Advance Home Health facility indicted for Medicaid fraud

Wed, 11 Nov 2009 05:00:00 GMT

A federal court indicted the owner and two personal care assistants of Minnesota’s Advance Home Health for fraudulently billing Medicaid for over $89,000 according to a Department of Justice (DOJ) press release.

Owner, Patrick Daniel Osei, 49, and his two employees, Crecida Marie Cade, 47, and Sabrin Marie Peterson, 38, allegedly submitted false claims to the Minnesota Department of Human Services for unrendered in-home personal care to Medicaid beneficiaries. The defendants also delivered payments to Medicaid recipients in exchange for allowing Advance to bill for personal care attendant (PCA) services that Advance never provided.

Q&A: How CMS responds to HIPAA complaints

Wed, 11 Nov 2009 05:00:00 GMT

Q: How does CMS handle a Health Insurance Portability and Accountability Act (HIPAA) complaint once received?

A: Upon receipt of a complaint, CMS will notify the filed against entity of the complaint, and provide them with an opportunity to demonstrate compliance, or to submit a corrective action plan. CMS has the discretion to conduct compliance reviews or on-site evaluations of covered entities' procedures to verify that they are compliant with the standard transactions or use the national identifiers. CMS also has the authority to impose financial penalties on any entity that is not compliant and has failed to correct their systems.

This Q&A is adapted from the CMS FAQ website page. To view this and other FAQs click here.

Survey: Reporting your CDI program

Wed, 11 Nov 2009 05:00:00 GMT

To which of the following departments does your clinical documentation improvement (CDI) program report?

Case management
Quality improvement
HIM
Nursing
Other

To submit your answer, go to “Quick Poll” at HCPro’s Corporate Compliance Website.

Here are the results from the last survey.

Is your facility compliant with the FTC “Red Flags” rule to protect against identity theft?

Yes: 94%
No: 0 %
I don’t know: 6%

Total Responses: 36

Texas Hospital group pays U.S. $27.5 million in false claims settlement

Wed, 04 Nov 2009 05:00:00 GMT

A Texas hospital group will pay the United States $27.5 million to resolve allegations that it violated the False Claims Act, the Anti-Kickback Statute, and the Physician Self-Referral Law (Stark Law) between 1999 and 2006, according to a Department of Justice (DOJ) press release.

McAllen Hospitals L.P., doing business as South Texas Health System, subsidiary of Universal Health Services Inc., violated all three regulations by paying illegal compensation to physicians in order to persuade them to refer patients within the hospital group.

Under the Stark Law, Medicare providers are prohibited from billing Medicare for referrals from doctors with whom the providers have a financial relationship. The hospital group distributed payments to the physicians through a series of sham contracts, including medical directorships and lease agreements.

The federal government will receive approximately $25.2 million of the settlement and the Texas Medicaid program will receive $2.3 million for the false claims submitted to the program. Bruce Moilan, a former employee of the defendants, raised the case using the False Claims Act’s qui tam provision. Moilan will receive a $5.5 million share of the settlement.

Detroit clinic owner faces 10 years in prison for Medicare fraud scheme

Wed, 04 Nov 2009 05:00:00 GMT

On October 30, Daisy Martinez pled guilty in Detroit’s U.S. District Court to one count of conspiracy to commit healthcare fraud, according to a Department of Justice (DOJ) press release. Martinez, 50, opened a clinic purported to specialize in infusion and injection therapy, in March 2006, so she could submit false claims for Medicare reimbursement.

According to the DOJ, Martinez and co-conspirators opened Sacred Hope Medical Center Inc. and began to recruit various patients. Martinez and co-conspirators paid cash kickbacks to patients in exchange for signatures indicating they had received treatment from Sacred Hope. Martinez used these signatures to create false medical files to submit to Medicare. Martinez admitted to prescribing patients medicines based on what medications were likely to generate the highest Medicare reimbursement.

Between 2006 and 2009, Martinez was also involved with two more infusion and injection clinics that participated in defrauding Medicare. The DOJ reports that in those three years, these clinics submitted approximately $15.3 million in false claims, which Medicare paid approximately $10.7 million. Martinez faces 10 years in prison and a $250,000 fine.

Medical equipment owner pleads guilty to fraudulently billing Medicare

Wed, 04 Nov 2009 05:00:00 GMT

Noel Wayne Jhagroo, owner and operator of Trucare Medical Equipment Services, a Houston-area durable medical equipment (DME) company, pleaded guilty to defrauding the Medicare program, according to a Department of Justice (DOJ) press release.

Jhagroo, 47, admitted he fraudulently billed Medicare for DME and other supplies that were never actually provided to beneficiaries. In addition, Jhagroo billed for medically unnecessary orthotic devices referred to as “Artho Kits” which include braces for both sides of the body and related accessories such as heating pads. According to the DOJ, Jhagroo billed Medicare for approximately $4,000 per kit, while supplying patients with less expensive, inferior equipment.

Between 2004 and 2009, Jhagroo submitted approximately $962,000 in fraudulent claims to Medicare. Jhagroo awaits sentencing on Febreuary 23, 2010.

Tip: Conducting a limited investigation

Wed, 04 Nov 2009 05:00:00 GMT

Internal investigations will not always lead to a million dollar settlement conducted in an attorney-client procedure. Sometimes, a more limited investigation of a problem is appropriate for your facility. Remember that any employee complaint, based on credible allegations, deserves an investigation. Even investigations that do not identify a problem improve your ability to demonstrate that your compliance function is effective. If a non-compliance issue requires a milder approach to the investigation, follow these rules:

Along with a limited review, conduct a probe audit to learn more about alleged issues
Address any overpayments revealed, if applicable
Consider implementing new policies and procedures and conduct further training
Review your organization’s potential obligations under the Sarbanes-Oxley Act to report problems involving publicly funded companies
Document your efforts to bring the provider into compliance

This week’s tip was adapted from the Internal Investigations Handbook. For more information about the book or to order your copy, visit the HCMarketplace.

HCCA survey: Impact of economy on compliance

Wed, 04 Nov 2009 05:00:00 GMT

In 2008, the Healch Care Compliance Association (HCCA) conducted a survey with members of the compliance profession to share their expectations of the impact of the economy on compliance in 2009. Click here to view the results.

As 2009 closes, HCCA looks to compliance professionals to see how the economy will affect business in 2010. To participate in this study, and to compare and contrast your plans with the rest of the compliance community, take the three minute survey here.

Survey: "Red Flags" rule

Wed, 28 Oct 2009 05:00:00 GMT

Is your facility compliant with the FTC “Red Flags” rule to protect against identity theft?

1. Yes
2. No
3. I don’t know

To submit your answer, go to “Quick Poll” at HCPro’s Corporate Compliance Web site.

Here are the results from the last survey.

Does your clinical documentation improvement (CDI) program keep physician queries as part of the permanent medical record?

Yes: 44%
No: 53%
I don’t know: 3%

Total Responses: 68

Q&A: Notification of compliance breach

Wed, 28 Oct 2009 05:00:00 GMT

Q: Is a business associate (BA) that discovers a breach ever responsible for notifying the individual(s) affected, media outlets, or HHS? Or does the BA only have to notify the covered entity (CE)?

A: The CE has sole responsibility for notifying individuals when required. The CE must notify HHS immediately if a breach involves 500 or more individuals and/or at the end of the calendar year with respect to all breaches, regardless of whether the CE or the BA caused the breach.

A review of the breach notification interim final rule, which is final and was published in the Federal Register August 24, is a good idea. Visit www.hhs.gov/ocr/privacy/hipaa/understanding/coveredentities/breachnotificationifr.html

Chris Apgar, CISSP, answered this question in the Octobert 2009 issue of the HCPro newsletter Briefings on HIPAA. For more information about this newsletter visit the HCMarketplace.

Los Angeles Medicare Fraud Strike Force lands 20 on trial

Wed, 28 Oct 2009 05:00:00 GMT

The Los Angeles Medicare Fraud Strike Force arrested 20 California residents for their involvement in various Medicare fraud schemes that resulted in over $26 million in fraudulent bills to the Medicare program, according to a Department of Justice (DOJ) press release.

A total of seven cases are pending trial all involving durable medical equipment company owners and marketers who are accused of fraudulently ordering and billing for power wheelchairs, orthotics, and hospital beds.

Since its inception in 2007, the Los Angeles Medicare Strike Force has indicted 331 individuals who collectively have billed the Medicare program falsely for more than $720 million, according to the DOJ.

Three pharmacies and their employees indicted on Medicaid fraud charges

Wed, 28 Oct 2009 05:00:00 GMT

New Jersey Attorney General Anne Milgram announced the indictments of four pharmacists, three pharmacy technicians, and three pharmacies on charges to conspiracy to defraud Medicaid of over $2.3 million, according to an Attorney General’s Office press release.

The three Newark area pharmacies, their owners, and employees allegedly paid cash to any patient who agreed not to take their medicine. Those prescriptions were then used to fraudulently bill Medicaid for thousands of dollars, the AG said. In other instances, medicines were dispensed to patients, then sold back to the pharmacy for a share of the Medicaid reimbursement, according to the AG.

All 10 defendants are charged with conspiracy, healthcare claims fraud, and Medicaid fraud.

Florida woman defrauds Medicare of 5.7 million

Wed, 28 Oct 2009 05:00:00 GMT

A U.S. district judge sentenced a Florida woman to 57 months in prison for her role in defrauding Medicare of $5.7 million, according to a Department of Justice (DOJ) release. Maria F. Hernandez, 62, pled guilty to healthcare fraud conspiracy after an FBI investigation established that Hernandez submitted fraudulent claims for durable medical equipment (DME).

Hernandez and her co-conspirators controlled three separate DME companies that received approximately $1.9 million based on false claims for DME items that were never prescribed or delivered to Medicare patients.

According to the DOJ, Hernandez received as much as $30,000 per month from her scheme.

Video: "60 Minutes" reports on Medicare fraud

Wed, 28 Oct 2009 05:00:00 GMT

“60 Minutes” recently featured a report on how criminals are defrauding Medicare out of billions of dollars every year. To see a short clip from that segment, click here.