Tag Archives: Fraud and Abuse

NYC HRA Sued under False Claims Act by Whistleblower; Settles with US DOJ for $1.05 Million

According to United States Attorney Richard S. Hartunian, the City of New York (NYC) has agreed to pay the United States Department of Justice (US DOJ) $1.05 million to settle allegations that the NYC Human Resources Administration (HRA) violated the federal False Claims Act by causing various managed care organizations (MCOs) to provide Medicaid coverage to individuals that HRA knew, or should have known, were ineligible to receive New York State Medicaid benefits because they had moved outside New York State. The case was brought by a whistleblower and investigated by the US DOJ and United States Department of Health and Human Services Office of the Inspector General (OIG). Continue reading

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Filed under False Claims Act, Fraud and Abuse, HHS OIG, Medicaid, Medicaid Fraud, New York State Agencies, NY Office of Medicaid Inspector General, NYC HRA

National Health Care Fraud Abuse Control Program Reports Record Recoveries and Return on Investment

Through their Health Care Fraud Abuse Control program (“HCFAC”), the United States Departments of Justice (“DOJ”) and the United States Department of Health and Human Services (“HHS”) have recovered more than $19 billion from health care providers over the last five years.  A report released on February 26 shows that the program’s three-year return on investment in fraud and abuse investigations is $8.10 for every dollar spent—this is a record high for the 17-year-old program.  These numbers suggest that the federal government’s interest in investigating and prosecuting health care fraud and abuse is as strong as ever.

For perspective, the current five-year recovery amount—$19.2 billion—is more than double the $9.4 billion recovery for the previous five-year period.  All of this is despite the loss of $30.6 million as a result of the budget-related sequestration in 2013.

HCFAC is a creation of the 1996 HIPAA statute, and is a joint project of DOJ and HHS.  Moreover, the high reported return on investment illustrates that HCFAC is a money-maker for Medicare—HCFAC’s appropriations come from the Medicare Hospital Insurance Trust Fund, also known as the Medicare Part A Trust Fund.

In the last year alone, DOJ filed 137 cases in this area, and charged 345 individuals with crimes.  It secured 234 guilty pleas and 46 convictions.  Defendants sentenced in the 2013 fiscal year served an average of 52 months in prison.

Not to be outdone, the Centers for Medicare and Medicaid Services (“CMS”) have banned over 225,000 individuals and entities from billing Medicare between March 2011 and September 2013.

The OIG Report may be accessed here: http://oig.hhs.gov/publications/docs/hcfac/FY2013-hcfac.pdf

The HHS Press Release may be accessed here: http://www.hhs.gov/news/press/2014pres/02/20140226a.html

Caitlin Monjeau and David Ross contributed this post.

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Filed under Fraud and Abuse, Health Care Reform, HIPAA, 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

Exclusion From Federal Health Care Programs: New Guidance From The United States HHS OIG

The United States Department of Health and Human Services Office of the Inspector General (OIG) has issued a Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs (“the Bulletin”).  The Bulletin replaces the previous OIG bulletin on this topic issued in 1999.  Exclusions from federal health care programs (including but not limited to Medicaid, Medicare, TRICARE, and veterans’ programs) often result from criminal and civil actions taken by governmental entities against providers.

The Bulletin details the consequences of exclusion from federal health care programs.  Guidance is also provided regarding civil monetary penalty liability for a provider who employs an excluded individual. The Bulletin provides guidance to the health care industry on the scope and frequency of screening employees and contractors against the OIG’s List of Excluded Individuals and Entities (LEIE) to determine whether they are excluded persons.  The Bulletin also recommends using the OIG’s recently revised self-disclosure protocol to disclose any employees who are excluded individuals.

Additionally, the Bulletin describes the scope and effect of the legal prohibition on payment by Federal health care programs for items or services furnished by an excluded person, or at the medical direction, or on the prescription of, an excluded person. For purposes of OIG exclusion, payment by a Federal health care program includes amounts based on a cost report, fee schedule, prospective payment system, capitated rate, or other payment methodology. The Bulletin also describes how exclusions can be violated and the administrative sanctions OIG can pursue against those who have violated an exclusion.

The new US HHS OIG Special Advisory Bulletin can be found at http://oig.hhs.gov/exclusions/advisories.asp.

The 1999 version can be found at http://oig.hhs.gov/exclusions/effects_of_exclusion.asp.

For more information, please contact the author, David R. Ross, who served as Acting Medicaid Inspector General under governors Pataki and Spitzer, as well as General Counsel, Deputy Medicaid Inspector General, and Director of Audits and Investigations for the Office of the Medicaid Inspector General (OMIG).

 

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Filed under Fraud and Abuse, Medicaid Fraud, Medicare Fraud

OIG: PODs “Inherently Suspect”

On Tuesday, the federal Office of the Inspector General (“OIG”) issued a Special Fraud Alert (“Fraud Alert”) detailing the OIG’s concerns with Physician-Owned Entities.  Specifically, the alert dealt with physician-owned distributorships, or PODs.  PODs are typically entities that make money by selling or arranging for the sale of implantable medical devices.

The United States Senate Finance Committee produced a report on PODs (“Senate Report”) in June of 2011.  According to the Senate Report, PODs are structured to give physicians who choose the medical devices that they implant in patients some payment derived from the profits that the sale of the devices generate.  Senate Report at 2.  For example, a surgeon who chooses a certain kind of stent may receive  a payment from the stent manufacturer based upon the sale of the stent.  The Senate Report indicated that PODs have proliferated among surgeons and surgical practices as reimbursements have declined.  Senate Report at 3.

As the Senate Report points out, PODs seem to create financial incentives for the doctors involved to choose medical devices that will generate payments for themselves.  Senate Report at 5.  The Committee that authored the report was troubled by anecdotal evidence that surgeons, who happened to be members of PODs, performed multiple expensive and risky procedures using implants for which the POD was compensated.  Senate Report at 5.  The Report concluded that PODs stood on uncertain legal ground in the quick-moving health care arena; the Committee specifically charged the OIG with addressing this issue.  Senate Report at 8.

The OIG’s recent Fraud Alert responds to this charge and indicates that PODs pose major problems, including the corruption of medical judgment, the overutilization of medical procedures, increased costs to Federal health care programs, and unfair competition.  Fraud Alert at 2.  Although intent is the determining factor in assessing whether a given POD is lawful under the federal anti-kickback statute, OIG concluded that PODs are “inherently suspect under the anti-kickback statute.”  Fraud Alert at 3.

OIG sets out a list of eight characteristics that it considers “suspect” in a POD, most of which indicate that referrals or the volume of referrals are the primary reason a physician involved with the POD might use a given device.  Fraud Alert at 3.  OIG does also make clear that this is not an exhaustive list.  Fraud Alert at 3-4.

The Special Fraud alert is available here.

The Senate Report is available here.

Caitlin Monjeau contributed this post.

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Filed under Anti-Kickback Statute, Fraud and Abuse

Auditing the Auditors, Part II: New York State Senate Republicans Request Independent Audit of the OMIG

As a result of a recent Congressional report on New York State’s Medicaid program, the Legislative Gazette has reported that Senate Republican leader Dean Skelos and New York State Senate’s Republican Conference have called for an independent audit of the New York State Medicaid program. A Congressional panel had requested that federal auditors review New York State’s $54 billion Medicaid spending and fraud, waste and abuse oversight programs.

A previous post on this blog, available here, reported that the U.S. House of Representatives Committee on Oversight and Government Reform issued a report entitled “Billions of Federal Tax Dollars Misspent on New York’s Medicaid Program.”  Among its conclusions are that fraud, waste, abuse and mismanagement has permeated the New York State Medicaid program for decades; that New York must crack down on wealthy individuals posing as indigent patients, as well as on allegedly excessive salaries paid to health care executives; and that New York overcharged the federal government $15 billion on its developmentally disabled patient facilities and that the state must repay an appropriate amount of the funds.

The report also questioned the operations of the New York State Office of the Medicaid Inspector General (OMIG), which is tasked with investigating and auditing the misspending of taxpayer funds. Congressional officials said either the federal Centers for Medicare and Medicaid Services (CMS) or the Government Accounting Office (GAO) must send auditors to New York to review the OMIG and various Medicaid programs.

Senator Dean Skelos said that “An immediate, independent audit of the entire state Medicaid system is imperative” and also that “These are serious allegations against OMIG.”

Recently, current and past employees of the OMIG have publicly criticized the OMIG and alleged that the office is performing poorly and that its staff suffers from low morale.

The Legislative Gazette article is available here.

For more information, please contact the author, David R. Ross, who served as Acting Medicaid Inspector General under governors Pataki and Spitzer, as well as General Counsel, Deputy Medicaid Inspector General, and Director of Audits and Investigations for the OMIG.

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Filed under Fraud and Abuse, Medicaid, Medicaid Fraud, NY Office of Medicaid Inspector General

Auditing the Auditors? Congressional Panel Requests Federal Audit of New York’s Medicaid Program

As a result of a recent Congressional report on New York State’s Medicaid program, a Congressional panel has requested that federal auditors review New York State’s $54 billion Medicaid spending and fraud, waste and abuse oversight programs.

The report of the U.S. House of Representatives Committee on Oversight and Government Reform, entitled “Billions of Federal Tax Dollars Misspent on New York’s Medicaid Program” is available here. Among its conclusions are that fraud, waste, abuse and mismanagement has permeated the New York State Medicaid program for decades; that New York must crack down on wealthy individuals posing as indigent patients, as well as on allegedly excessive salaries paid to health care executives; and that New York overcharged the federal government $15 billion on its developmentally disabled patient facilities and that the state must repay an appropriate amount of the funds.

Significantly, the report also questioned the operations of the New York State Office of the Medicaid Inspector General (OMIG), which is tasked with investigating and auditing the misspending of taxpayer funds. Congressional officials said either the federal Centers for Medicare and Medicaid Services (CMS) or the Government Accounting Office (GAO) must send auditors to New York to review the OMIG and various Medicaid programs.

Recently, current and past employees of the OMIG have publicly criticized the OMIG and alleged that the office is performing poorly and that its staff suffers from low morale.

For more information, please contact the author, David R. Ross, who served as Acting Medicaid Inspector General under governors Pataki and Spitzer, as well as General Counsel, Deputy Medicaid Inspector General, and Director of Audits and Investigations for the OMIG.

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Filed under Fraud and Abuse, Medicaid, Medicaid Fraud, NY Office of Medicaid Inspector General

OMIG Releases Annual Report for Calendar Year 2011

Today, the New York State Office of the Medicaid Inspector General (“OMIG”) posted its 2011 Annual Report.  We will post a detailed analysis in the coming days. In the meantime, the report may be accessed here.

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Filed under Fraud and Abuse, Medicaid, Medicaid Fraud, NY Office of Medicaid Inspector General