Tag Archives: False Claims Act

Cardiology Group to Pay More than $1.33 Million to Settle Allegations of Stark Law and False Claims Act Violations

According to United States Attorney Richard Hartunian of the Northern District of New York, Cardiovascular Specialists, P.C., has agreed to pay the federal government $1,336,636.98 plus interest to settle allegations that it violated the federal Physician Self-Referral Law (also known as the Stark Law) and the federal False Claims Act by knowingly compensating its physicians in a manner that violated federal law. Cardiovascular Specialists is a group practice of cardiologists with offices throughout upstate New York does business as New York Heart Center (NYHC).

USDOJ alleges that NYHC used a compensation system that violated the Stark Law, and thereby the False Claims Act, by compensating each NYHC partner-physician using a formula that took into account the volume or value of that physician’s referrals for nuclear scans and CT scans.   Continue reading

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Filed under False Claims Act, Stark Law

Attention Medicaid and Medicare Providers: US DOJ Sues Providers for Failing to Return Overpayments Within 60 Days

On June 27, 2014, in the case of United States ex rel. Kane v. Healthfirst, Inc., et al., No. 11-2325 (S.D.N.Y.), the United States Department of Justice (USDOJ), via the United States Attorney’s Office for the Southern District of New York, sued several Medicaid providers under the federal False Claims Act for failing to return Medicaid overpayments within 60 days of identifying them. Continue reading

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Filed under False Claims Act, Federal Case Updates, Fraud and Abuse, Medicaid, Medicaid Fraud, Medicare, Medicare Fraud

Fourth Circuit Decision Addresses Constitutionality of Per-Claim Penalty under Federal False Claims Act

The decision delivered just before Christmas by the United States Court of Appeals for the Fourth Circuit in US ex rel. Kurt Bunk, et al., v. Gosselin Worldwide Moving, N.V., et al. is of value and of interest to all healthcare providers subject to the reach of the Federal False Claims Act (hereafter “FCA”). Although not dealing with the healthcare market, the decision serves as another illustration of the potential scope of per-claim civil penalties under the FCA and the vitality of such penalties when  analyzed under the United States Constitution’s bar on excessive fines via the Eighth Amendment. Continue reading

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Filed under False Claims Act, Federal Case Updates, Fraud and Abuse, Uncategorized

Applicability of Fraud and Abuse Rules to the Marketplace Clarified … Somewhat

One of the lingering questions about the Health Insurance Marketplace created under the Affordable Care Act is whether plans on the Marketplace are considered part of a Federal health care program, thus opening up potential liability under the Anti-Kickback Statute. There was concern that the broad language defining a “Federal health care program” would apply to the Exchanges because of the federal tax subsidizes provided to individuals on the private market.  Under 42 U.S.C. 1320a-7b(f)(1), a “Federal health care program” is defined as “any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government.”  This presented the possibility that, by virtue of the inclusion of federal subsidy payments, even private insurance plans on the Marketplace and the state Exchanges would constitute Federal health care programs and necessitate compliance with the entire array of federal legal requirements.    Continue reading

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Filed under False Claims Act, Fraud and Abuse, PPACA

Proposed Rule to Extend and Amend the Exception to Donate Electronic Health Records Items and Services

The Office of Inspector General for the Department of Health and Human Services (OIG) and the Centers for Medicare and Medicaid Services (CMS) published on April 10, 2013 proposed rules to extend and amend the Electronic Health Records (EHR) donation exceptions under the Anti-Kickback Statute and Stark Law, respectively.

The proposed rules would extend the exceptions until the end of 2016, but both the OIG and CMS are seeking comments on extending the sunset date to December 31, 2021, which corresponds to the end of the EHR Medicaid incentives program.  Under the current law, both exceptions are set to sunset on December 31, 2013 .

In addition, the OIG and CMS propose to amend the conditions of the EHR donation exceptions by removing the electronic prescribing requirement and redefining (i.e. limiting) the type of entities that can donate.   The current EHR donation exceptions permit donations by any individual or entity that provides patients with health care items or services covered by a Federal health care program, based on a public policy initiative to expedite adoption and use of EHR systems.  The proposed rules would remove, among other entities, clinical laboratories and pharmacies from the definition of a protected donor.

Finally, the OIG and CMS propose to address a critical issue identified as “data and referral lock-in,” in which EHR technology that appears to support the interoperable exchange of information on its face, in practice restricts the recipient provider to transmit data and communicate only with the donor entity to control referrals.  In response, the OIG and CMS propose to require that the donated EHR software is certified in accordance with the definition of Certified EHR Technology applicable on the date of the donation. Under the current law, both exceptions require only that the EHR software is interoperable.

Comments on the proposed rules will be accepted for 61 days from the date of publication, which is June 10, 2013.

This post is contributed by Charles Dunham.


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Filed under Anti-Kickback Statute, Electronic Health Records, False Claims Act, Fraud and Abuse, Laboratories, Medicaid, Medicaid Fraud, Medicare Fraud, Stark Law

False Claims Act: Payment vs. Participation Regulations

In U.S. ex rel. Williams v. Renal Care Group, Inc. (Case No. 11-5779) (October 5, 2012), the Sixth Circuit Court of Appeals reversed a grant of summary judgment in favor of the United States on two main False Claims Act (FCA) claims relating to Medicare reimbursement of dialysis supplies. In doing so, the Court issued an important decision distinguishing the applicability of the FCA between noncompliance with payment and participation regulations.

The United States alleged, inter alia, that defendants violated the FCA by submitting claims which they knew were not in compliance with DME supplier standards set forth by statute and regulation relating to conditions of participation (i.e. to honor warranties, fill orders, and maintain an appropriate place of business), which impose independent sanctions and potential exclusion.

The Sixth Circuit reasoned that “[t]he False Claims Act is not a vehicle to police technical compliance with complex federal regulations.” As such, the Court agreed with the defendants that noncompliance with participation regulations does not render a claim materially false, irrespective of the whether the regulation is violated, because payment is not expressly or impliedly conditioned upon compliance with participation conditions.

This decision could have a further relevance in the context of Medicare and Medicaid provider audits for improper payments. In opposing audit tactics, our firm has always maintained that disallowances based on noncompliance with conditions of participation are unwarranted and inconsistent with the structure and purposes of the Medicare and Medicaid program. This decision adds support and justification to the validity of this argument in suggesting that payment is not expressly or impliedly conditioned upon compliance with participation conditions.

This post is contributed by Charles Dunham

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Legal Hurdles Mount for Lab Corp and Quest

The U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) recently released their Annual Report for Fiscal Year 2011 under the Hart-Scott-Rodino Antitrust Act. In brief, the Hart-Scott-Rodino Act allows the DOJ and FTC to block transactions believed to be harmful to competition and consumers. The Annual Report reviews the enforcement activities undertaken by these federal agencies during the prior year.

Under the power granted by the Hart-Scott-Rodino Act, the DOJ and FTC identify and intervene early in transactions viewed as anticompetitive. This means that a relatively small number of challenged transactions require litigation. For instance, of the 17 transactions challenged in 2011 by the FTC, only three matters required court action.  While healthcare transactions are becoming an increasingly common target for these challenges, the number of hospital mergers reviewed last year under the Hart-Scott-Rodino Act were essentially the same as the prior year. Thus, it appears that the DOJ and FTC are now reviewing a wider array of transactions in the healthcare industry. Continue reading

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Filed under Anti-Kickback Statute, False Claims Act, Laboratories, Medicare Fraud, Uncategorized

HHS OIG Identifies $332 Million in Uncollected Medicare Overpayments

On Friday the Office of Inspector General (“OIG”) of the Department of Health and Human Services (“HHS”) made public a report which revealed that the Centers for Medicare and Medicaid Services (“CMS”) had failed to collect over $332 million in Medicare overpayments, for the 30-month period ending March 31, 2009.

During that time, OIG had issued reports recommending that CMS collect approximately $418 million in Medicare overpayments.  CMS delegates this responsibility to Medicare contractors.  However, OIG found that CMS efforts at recapturing these overpayments were hindered by two factors in particular.  First, OIG found that the statute of limitations in the Federal Claims Collection Act of 1966, which bars recovery from providers that are “without fault” at any time and deems providers to be “without fault” 3 years after the year payment is made unless there is “evidence to the contrary,” had precluded recovery of a large amount of the overpayments, which OIG now deems unrecoverable. Continue reading

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Filed under False Claims Act, Health Care Reform, Medicaid Fraud, Medicare Fraud, PPACA

The Wild, Wild West of Billing by Out-of-Network Labs and Waivers of Patient Responsibility

O’Connell & Aronowitz attorneys, Jeffrey Sherrin, Kurt Bratten, and Charles Dunham, spoke at a national meeting of clinical laboratories in Las Vegas on May 19, on the complicated issue of referrals to and billing by out- of-network (OON) clinical laboratories, and the waiver of patient responsibility.  Waivers of copays, deductibles and balance billing have been used increasingly by OON labs to compete for the business of patients who have OON benefits.  Labs may be shut out of networks because of exclusive provide agreements or closed panel, or they may find that reimbursement is actually greater as an OON lab and choose not to seek to participate with individual plans.  Many OON labs market that patients will be treated no differently than if they went in-network labs, meaning usually that they will not be billed for any patient responsibility for balance billing or other costs that they would not have if their specimens were tested by an in-network lab.

These billing practices have come under tremendous and aggressive scrutiny by federal and state prosecutors, state regulatory agencies, third-party payers with their special investigations units, and competitors.  Our attorneys presented a comprehensive review of all activities going on around the country, including criminal investigations or prosecutions, litigation brought by third-party payers, the most active being Aetna Health, and litigation and complaints between competitor labs.  They also explained the respective interests of all involved parties to the debate over the legality of waivers or limitations of patient responsibility — those of patients, in-network labs, out-of-network labs, third-party payers, and state governments — as well as a review of key states’s laws that come into play. Continue reading

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Filed under Anti-Kickback Statute, Laboratories

OMIG 2012-2013 Work Plan: A Brief Overview

“Fighting Fraud.  Improving Integrity and Quality.  Saving Taxpayer Dollars.”

This phrase appears on each page of the newly released New York State Office of the Medicaid Inspector General (OMIG) State Fiscal Year 2012-2013 Work Plan.

On the Executive Summary page, the OMIG’s stated mission is to “enhance the integrity of the New York State Medicaid program by preventing and detecting fraudulent, abusive and wasteful practices within the Medicaid program and recovering improperly expended Medicaid funds while promoting high-quality patient care.”

Fraud is generally defined in the Medicaid context as intentional acts of improper billing.  Matters involving actual fraud—which are criminal in nature—are typically referred by the OMIG to the New York State Attorney’s General’s Medicaid Fraud Control Unit pursuant to a memorandum of understanding between the two agencies, or referred to other criminal law enforcement authorities.  Matters involving “abuse” or “waste” are different matters entirely, and involve unintentional, inadvertent acts, or even negligent acts, of erroneous or improper Medicaid billing.

Of course, if the OMIG limited itself to fighting actual fraud, most Medicaid providers would breathe a sigh of relief, as those pesky OMIG audits, which seek extrapolated recoveries of overpayments based largely upon technical deficiencies in record keeping, would disappear.  Will the new Medicaid Inspector General, James Cox, steer the agency away from the OMIG’s historical tendency to impose, sometimes retroactively, hypertechnical interpretations of regulations or policies upon providers?  Only time will tell.   Continue reading

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Filed under Announcements, Medicaid Fraud, Medicare Fraud