Articles Tagged with Medicare

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medicare fraud
In the world of False Claims Act qui tam cases, the concept of medical necessity is a very big issue.

Medicare Fraud

This is because Medicare requires, as a condition of coverage, that services delivered to a patient be “reasonable and necessary for the diagnosis or treatment of illness or injury.”  See 42 U.S.C. § 1395y(A)(1)(a).  Healthcare providers who wish to participate in the Medicare program must ensure that their services are provided “economically and only when, and to the extent, medically necessary.”  See 42 U.S.C. § 1320c-5(A).  In other words, Medicare only pays for services that are “medically necessary.”

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On November 8, 2016, the United States Attorney’s Office for the Southern District Florida announced the conviction and sentencing of two defendants in a Medicare Part D fraud case.

What is Medicare Part D?

As most people know, Medicare is a federally funded program that provides free or below-cost healthcare benefits to certain individuals, primarily the elderly, blind, and disabled.  Medicare offers different types of benefits through program “parts.” Part D of Medicare, known as the Medicare Part D program, subsidizes the costs of prescription drugs for Medicare beneficiaries in the United States.

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Each year, Medicare beneficiaries can make changes to their Medicare health plans and prescription drug coverage between October 15 and December 7, during the Medicare Open Enrollment Period.  Unfortunately for consumers, this period is also open season for Medicare scammers.

Here are some common ploys that Medicare scammers use to try and take advantage of seniors and ways to outsmart them:

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How do you know if you have a Qui Tam Case?

Under the False Claims Act, persons who know about fraud against the federal government can receive a reward for reporting that fraud and helping the Government recover money from the wrongdoer.    We receive many calls from potential whistleblowers who wish to report serious fraud against Government.  Unfortunately, we cannot take every case where fraud exists.   Here is a list of sample questions to help you determine whether you might have a potential False Claims Act qui tam case.

  1. Does your employer do business with the federal or state government?  This would include Government vendors or contractors as well as healthcare companies that receive payment from Medicare or Medicaid.
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Deadly Healthcare Fraud in Florida and Beyond

Do you think Medicare and Medicaid fraud is a victim-less crime? Think again.  Many times, health care fraud only causes monetary damages to the government and taxpayers.  Depending on the type of fraud, however, it can also result in injuries to or even the death of Medicaid and Medicare beneficiaries.  Unscrupulous fraudsters who fail to provide adequate care required by Medicare and Medicaid, not only scam the government and taxpayers, they put innocent lives in jeopardy.

Take for example a recent criminal healthcare fraud case in Maryland against Alpha Diagnostics, LLC, a portable diagnostic services provider of x-rays, ultrasounds, and cardiologic tests.  According to the Department of Justice, the testimony and evidence presented at trial showed Alpha defrauded Medicare and Medicaid by falsely representing that the tests had been interpreted by licensed radiologists, when in fact, the tests had only been reviewed by non-physician employees of Alpha.  In furtherance of the fraud, Alpha employees allegedly created fictitious reports purportedly created by an actual licensed physician to which they would forge the licensed physician’s signature.

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In America today, many hospitals are owned and controlled by massive corporations that operate large chains of hospitals throughout the country.  As a result, your local hospital may not be locally owned or controlled.  Instead, it might be more akin to a McDonald’s restaurant, owned and controlled by some large corporation with a faraway headquarters.

Although this type of “chain” ownership can often lead to efficiency, it can also lead to serious problems.  More and more often, the day-to-day decisions of running hospitals are made by business people who work in the corporate suites, not doctors and nurses who actually deliver care to patients.

Many times, these decisions are made to drive profits rather than to serve the best interests of the patients.  Many times these decisions can also lead to Medicare and Medicaid fraud.

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Improper Off-Label Usage of Prescription Drugs

Broadly speaking, “off-label” drug use occurs when a doctor prescribes a medication for a condition or ailment that is not specifically approved by the FDA.  When the FDA approves a drug, the manufacturer is required to submit studies showing that a drug works for a specific condition and that it is safe.  Sometimes, however, a drug is shown to have beneficial effects on a condition, but the FDA will not approve the drug for that specific use.  For instance, I take a drug for migraine headaches that has only officially been approved for treatment of clinical depression.  This is considered “off-label” use.

No law prevents a physician from writing a prescription for an off-label use, and private insurance companies (my own included) frequently pay for drugs even when used for an “off-label” purpose.  Nevertheless, “off-label” drug use presents the potential for fraud.  Drug companies are barred by the FDA from marketing a drug for off-label use – for obvious safety reasons.

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False Claims Act litigation: Implied False Certifications and Supreme Court

As we wrote back in April, the Supreme Court considered a case this term on a grey area in False Claims Act litigation – “implied certifications.”  A typical false claim would be “factually false” – in other words, the fraudster submits a claim to the government that is actually false.  For instance, if a government contractor submits an invoice to the government for 10 tons of potatoes but only supplies 5 tons, the invoice is “factually false.”

An “implied certification” involves a claim for payment where a defendant did not expressly certify a fact, but the act of submitting the claim “implies” that certain facts are true.  For instance, submitting a claim for payment to Medicare has been deemed an implied certification of compliance with the Anti-Kickback Statute and the Stark Law.  Thus, a claim that is submitted to Medicare for services that resulted from the payment of a kickback is “impliedly false.”  Likewise, if a contractor fulfills a contract to provide guns to the military, but the guns do not shoot, that could be an “impliedly false” claim – the guns were in fact provided, but the contractor did not comply with the terms of the contract that require the guns to work.

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Unfortunately, many hospitals commit fraud against the federal government in the way they pay doctors and physicians.

To understand this type of fraud, you have to understand how hospitals bill the Medicare system.  Generally, bills can be divided into two categories.  First, the hospital bills Medicare for work personally performed by the doctor, for example, a patient visit.  Second, the hospital bills Medicare for all the tests and services the doctor orders, but does not personally perform.  These might include x-rays, MRI tests, laboratory tests, physical therapy, or radiation therapy.

Hospitals make way more money from tests and services ordered by the doctor than from work actually performed by the doctor.  Obviously, then, the hospital has a financial incentive to encourage the doctor to refer more of these tests and services.  More tests equals more money.

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The Government Accountability Office recently released a report finding that Medicare paid out $14.1 billion to private insurance companies for improper claims in 2013 alone.  The report, entitled “Medicare Advantage:  Fundamental Improvements Needed in CMS’s Effort to Recover Substantial Amounts of Improper Payments,” discusses audits conducted by the Centers for Medicare and Medicaid Services on payments to select “Medicare Advantage” plans.

Medicare Advantage plans are private health plans available to senior citizens who qualify for both Medicare Part A and Part B.  In lieu of “traditional” Medicare, one can enroll in a Medicare Advantage plan managed by a private insurance company.  CMS then pays the private insurer a fixed monthly sum per person enrolled to provide care, regardless of the actual healthcare expenses incurred by the patient.  Put another way, rather than pay health care expenses as they are incurred, CMS pays a fixed “premium” every month to the private insurers, who then fund a senior’s health care expenses as they come due.

Medicare Advantage plans are big business for private insurance companies.  In 2014 alone, CMS paid roughly $160 billion to private insurers offering Medicare Advantage plans to 15.8 million seniors.  In total, about 30% of Medicare recipients have elected to enroll in Medicare Advantage plans.