Overview of Healthcare Fraud Laws and Enforcement
Government enforcement of healthcare fraud and abuse laws targets individual physicians through regulations like the False Claims Act, Anti-Kickback Statute, and Stark Law. Violations result in civil and criminal penalties, as shown in recent cases of Medicare fraud schemes.
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Presentation Transcript
False Claims Act Anti-Kickback Statute Physician Self-Referral Law ( Stark Law )
Overview Government enforcement of healthcare fraud and abuse laws is now starting to include actions and settlements against individual physicians This presentation will provide an overview of the following rules & regulations: Federal False Claims Act 31 U.S.C. 3729-3733 New York State False Claims Act, Senate Finance Law, Article 13 Program Fraud Civil Remedies Act 31 U.S.C 3801-3812 (PFCRA) Qui Tam Lawsuits Anti-Kickback Statute 42 U.S.C. 1320a-7b(b) Physician Self-Referral Law (Stark Law) 42 U.S.C. 1395nn
Federal False Claims Act - 31 U.S.C. 3729-3733 New York State False Claims Act, Senate Finance Law, Article 13 Imposes liability for knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval No specific intent to defraud is required => can be actual knowledge, reckless disregard, or deliberate ignorance Both civil and criminal penalties Civil: $11,000 per claim plus up to 3x the amount of damages & possible program exclusion Criminal: up to 5 years in prison + $25,000 fine
False Claims Act Cases in the News Detroit-area doctor sentenced to over 3 years in prison for role in $5.7 million Medicare fraud scheme Scheme involved prescribing unnecessary controlled substances to patients and billing for office visits and diagnostic testing that was never performed Medical Director at a Brooklyn clinic sentenced to 2 years in prison and ordered to pay $6,429,330 in restitution for role in $13 million health care fraud scheme Doctor billed Medicare & Medicaid for services provided by a physician s assistant acting without supervision by a medical doctor using his own provider number Submitted claims for office visits, physical therapy and diagnostic tests that were fraudulent
Program Fraud Civil Remedies Act (PFCRA) 31 USC 3801-3812 Provides for administrative remedies against any person who knowingly makes a claim or statement that the person knows or has reason to know is false, fictitious or fraudulent The presence of a false claim is not required, a false statement is enough to trigger remedies under PFCRA
Qui Tam Lawsuits Federal and NYS False Claims Acts provide for qui tam lawsuits through which any person ( qui tam relator ) may bring a civil action for themselves and on behalf of the US government for any violation of the False Claims Act If the qui tam relator wins the suit or if there is a settlement, they may share in a portion of any money recovered with the government and receive reimbursement for reasonable expenses and attorney s fees and costs
Non-Retaliation Policy False Claims Act (FCA) forbids retaliation by an employer against an employee who cooperates with investigators regarding potential FCA violations or who commences qui tam actions in good faith Any current or former employee, contractor or agent of any private or public employer who is discharged, demoted, suspended, threatened, harassed or discriminated against because of lawful acts to stop one or more violations of this article shall be entitled to all relief necessary to make them whole. Such relief shall include but not be limited to: An injunction to restrain continued discrimination; Hiring, contracting or reinstatement to the position person would have had or to an equivalent position; Reinstatement of full fringe benefits and seniority rights; Payment of 2 times back pay, plus interest; and Compensation for any specials damages sustained as a result of the discrimination, including litigation costs and reasonable attorney s fees
Anti-Kickback Statute (AKS) - 42 U.S.C. 1320a-7b(b) Criminal law that prohibits any payment of remuneration to induce or reward patient referrals or the generation of any Federal healthcare program business Remuneration is anything of value such as cash, free rent/office space or inflated compensation for medical directorships Penalties include fines, jail time and exclusion from Medicare & Medicaid Can violate the AKS even if the services provided are medically necessary There are safe harbors that provide protection for certain business and payment practices but the arrangements must satisfy all requirements of the safe harbor
Anti-Kickback Statue Safe Harbor Provisions Categories of Safe Harbors Investment interests for publicly traded companies & small entities Space & equipment rental agreements Personal services & management contracts Sale of a medical practice Employees Group purchasing organizations & discounts Waiver of beneficiary co-insurance & deductible amounts Warranties Health plan/managed care Investments in ambulatory surgical centers (ASC) Joint ventures in underserved areas Practitioner recruitment in underserved areas Sales of physician practices to hospitals in underserved areas Subsidies for obstetrical malpractice insurance in underserved areas Investments in group practices Specialty referral arrangements between providers Cooperative hospital services organization More information can be found here: https://www.law.cornell.edu/cfr/text/42/1001.952
Anti-Kickback Cases in the News 9 cardiologists ordered to pay the government $3.2 million for allegedly engaging in a kickback scheme Entered into clinical faculty agreements with the hospital that they received a salary for but did not provide some or any of the services Instead, the cardiologists referred patients to the hospital for cardiology services Miami-area physician sentenced to 9 years in prison for role in $30 million Medicare fraud scheme Ordered to pay over $30 million in restitution Admitted to writing prescriptions for home health care services in exchange for kickbacks and bribes Also falsified patient s records to make it seem like they were qualified for home services
Physician Self-Referral Law (Stark Law) - 42 U.S.C. 1395nn Prohibits physicians from referring patients to receive designated health services (DHS) payable by Medicare or Medicaid from entities that the physician (or an immediate family member) has a financial relationship with, unless an exception applies Financial relationships include compensation arrangements, ownership and investment interests Strict liability statute => proof of intent to violate the law is not required Penalties include fines and exclusion from federal healthcare programs
Designated Health Services (DHS) DHS include: Inpatient and outpatient hospital services Clinical laboratory services; Physical therapy, occupational therapy; Outpatient speech-language pathology services; Radiology and certain other imaging services; Radiation therapy services and supplies; Prosthetics, orthotics and prosthetic devices and supplies; Home health services; Outpatient prescription drugs; Durable medical equipment and supplies; Radiation therapy services and supplies; Parenteral and enteral nutrients, equipment and supplies
Stark Law Cases in the News Millennium Health agreed to pay the government $256 million to resolve alleged violations of the False Claims Act & Stark Law Provided free point of care drug test cups to providers on the condition (documented in the physicians agreement) that the urine specimens would be returned to Millennium Health for hundreds of dollars worth of additional testing Georgia Hospital System & 1 doctor agreed to pay more than $25 million to resolve allegations that they violated the False Claims Act & Stark Law Hospital system provided excessive salary & directorship payments to the doctor that violated the Stark Law
References & Resources "A Roadmap for New Physicians. Avoiding Medicare and Medicaid Fraud and Abuse." Office of Inspector General. U.S. Department of Health & Human Services, PDF file. 1 June 2016. http://oig.hhs.gov/compliance/physician- education/roadmap_web_version.pdf "A Roadmap for New Physicians Fraud & Abuse Laws." Office of Inspector General. U.S. Department of Health & Human Services, n.d. Web. 30 May 2016. http://oig.hhs.gov/compliance/physician-education/01laws.asp Baumann, Linda A., Esq. et al."Provider's Take Note: What the New Stark Regulations Mean to You." HCCA Compliance Today Apr. 2016: 52-57. "HHS OIG Supplemental Compliance Program Guidance for Hospitals 2005." Office of Inspector General. U.S. Department of Health & Human Services, 31 Jan. 2005. PDF file. 1 June 2016. http://oig.hhs.gov/fraud/docs/complianceguidance/012705HospSupplementalGuidance.pdf "Justice News." The Unites States Department of Justice, n.d. Web. 30 May 2016. https://www.justice.gov/justice-news "Physician Self Referral." CMS.gov. Centers for Medicare & Medicaid Services, 5 Jan. 2015. Web. 30 May 2016. https://www.cms.gov/medicare/fraud-and-abuse/physicianselfreferral/index.html "Safe Harbor Regulations." Office of Inspector General. U.S. Department of Health & Human Services, n.d. Web. 30 May 2016. http://oig.hhs.gov/compliance/safe-harbor-regulations/index.asp Wade, Robert. "Anti-Kickback Statute & Safe Harbors." Krieg Devaul, n.d. PDF file. 30 May 2016. http://www.kriegdevault.com/userfiles/file/WEBSITE%20TEMPLATE%20Anti- Kickback%20Statute%20and%20Safe%20Harbors.pdf Wolfe, Joseph N., Esq., and Wesley R. Sylla, Esq. "Physician Compensation Compliance: Can Your Plan Survive Stark Law Scrutiny?" HCCA Compliance Today Mar. 2016: 32-41.
