A Texas physician and his employee were charged for their roles in a healthcare fraud scheme involving the submission of more than $3.5 million in claims to Medicare. The physician allegedly paid kickbacks to various adult day care companies to gain Medicare beneficiary information under the guise of providing medical services. He, his employee, and other co-conspirators used their access to adult day care facilities to perform a variety of unnecessary medical tests and procedures and order prescriptions for expensive medications that were not needed, according to the charges.
The indictment further alleges many of the patients had their own primary care physicians who were not consulted prior to or after the examinations. Most of the patients were allegedly elderly or disabled and lacked the capacity to consent to the examinations, tests, and other procedures that the physician and his employee performed.
In addition, marketers paid the physician and his employee illegal kickbacks in exchange for ordering laboratory tests and prescriptions that were unnecessary and that patients often did not want, according to the charges. In many instances, patients allegedly did not receive their test results or the prescribed medication.
The employee also forged patient signatures on consent forms connected to the fraudulent laboratory testing services and prescriptions, according to the charges. The indictment further alleges more than $3.5 million was billed to Medicare in connection to the fraud scheme.
The physician and his employee were charged with seven counts of healthcare fraud and conspiracy to do so, all of which carry a possible 10-year-term of imprisonment, as well as one count of conspiracy to receive illegal remunerations which could result in another five years in prison. Both were also charged with aggravated identity theft which carries a mandatory two years in federal prison which must be served consecutively to any other prison term imposed. All convictions could also result in maximum possible fines of $250,000.
Issue:
Medical tests, procedures, and prescriptions must be medically necessary, and the resident must be eligible for the provided services and involved in the decision to choose those services. Residents’ primary care physicians should also be consulted before ordering any tests or procedures. Providing medical services that are not necessary can be considered a false claim. Under federal and state anti-kickback statutes, you may not knowingly and willfully offer, pay, solicit, or receive anything of value to induce or reward for referrals of federal or state healthcare program business. The prohibition against kickbacks applies to those who pay for referrals and to those who receive them. Kickbacks can take various forms, such as bribes or rebates. Failure to promptly report a false claim or a kickback can result in lawsuits, fines, and other sanctions.
Discussion Points:
- Review your policies and procedures on use of testing services and resident eligibility. Also review policies and procedures for preventing and reporting false claims and kickbacks.
- Train staff to ensure that ordered testing is medically necessary, and that if a laboratory test is potentially medically unnecessary, it should first be confirmed with the primary physician and not submitted for billing if it is determined to be a false claim. Also train staff on federal and state anti-kickback statutes and what can be considered a kickback. Include information on how to report concerns and suspected violations, and make sure staff know that prompt reporting is mandatory. Document that the trainings occurred and place in each employee’s education file.
- Periodically audit to ensure that medical tests, procedures, and prescriptions meet the criteria for medical necessity and that they’ve been approved by the resident’s primary physician. Survey professional staff on their knowledge of what can be considered medical necessity. Also periodically audit staff understanding to ensure that they are aware of what should be done if they suspect an illegal kickback has occurred, whether intentionally or unintentionally. Conduct audits of documentation and billing routinely to prevent and detect errors before they progress to a false claim.
