Question

Describe billing compliance and methods of private, public and government audit laws

1 Effect of Healthcare Reform A) Five ACA contained payment reforms

Answer 1

Federal Audits

We have helped multiple healthcare practices through the process of a government billing audit. There are several kinds of audits performed when a practice becomes the subject of a healthcare fraud investigation. Our attorneys are familiar with all of them and are ready to provide guidance and defenses as needed if you’re involved in a government investigation.

RAC Audits

Auditors across the country audit healthcare providers in response to tips, whistleblowing, and from irregularities for providers with a high propensity for error according to the Centers for Medicaid and Medicare Services (CMS). CMS hires contractors to conduct audits of healthcare providers. RAC auditors have the authority to request records going back for three years and can request up to 400 items every 45 days. RAC auditors are trained to reduce fraud, waste, and error in healthcare billing, and if found in violation, practices can be made to pay back what was overbilled, for starters. Having a defense attorney from the start will allow you to better negotiate and object to any auditor’s requests, and prevent the auditor from abusing their privileges. Additionally, RAC audits are subject to appeals, which are often overturned in favor of the provider (although more so in favor of hospitals than private practitioners). An attorney’s expertise will be needed for the appeal, which can be a complex process requiring in-depth knowledge of the law.

ZPIC Audits

ZPIC audits are specifically designed to identify fraud. They are not random — a provider is almost always alread the subject of a fraud investigation. Therefore, if a healthcare practitioner is notified that a ZPIC audit will be happening, they must act vigilantly and seek out the advice of an experienced medical billing defense attorney. Auditors investigate all Medicare-related fraud across all 50 states and even the U.S. territories. They have vast authority in their investigations – more than any other unit of CMS. They have no limitation as to time period for requests, nor any limitations on the number of document requests. However, with that said, legal counsel is advised in order to protect against overly broad government requests during the audit. ZPIC auditors can visit the provider on-site, without notice and can even interview the employees of the practice. Cooperating with auditors is crucial – they have the power to withhold payments from federal-funded programs while the investigation is pending. For practitioners who rely heavily on Medicare, this can be detrimental. Our attorneys are experienced in dealing with ZPIC auditors and can help you avoid this and other consequences of such an investigation.

MAC Audits

Medicare Administrative Contractors act as a middleman between healthcare providers and CMS. They process and pay claims for Part A and B services, but they can also audit claims and look for discrepancies. They can review the claims before paying, which can affect a hospital’s cash flow – they can review any claims they want, within their discretion, and refuse payment while looking into the matter. MAC decisions can also be appealed.

CERT Reviews

Comprehensive Error Rate Testing contractors were created to determine whether MAC is paying their claims properly – they serve as auditors for the auditors. Their reviews are typically random, and they will issue an alert on MAC websites. CERT investigators will typically drive the actions of MACs, so healthcare providers may be able to anticipate what areas the auditors are reviewing more closely at any given time. Our attorneys monitor trends in auditing and medical billing reviews and will be able to provide guidance to all health care practitioners who face an audit.

State Audits

The Office of Medicaid Inspector General of New York (OMIG) is the agency charged with ensuring compliance with and enforcement of state Medicaid. OMIG is also authorized to conduct audits under 18 NYCRR 517.1 et. seq. Usually, the provider will receive notice by letter, at which point, it is advised he or she seeks out legal advice. A state audit will focus on a sampling of records, and the auditors will then extrapolate the error rate using the sample to determine any overpayment and create a Draft Audit Report. The provider may submit written objections to this report, hopefully with the aid of an experienced lawyer, and then the auditors will release a Final Audit Report, which details the amount that has been overpaid to the provider if any. OMIG audits can be challenged at a hearing, but the healthcare provider bears the burden of proof to show the audit is wrong. Our attorneys have fought for our clients at OMIG audit hearings, and understand how to receive a favorable outcome.

Crimes and Sentences

Our firm defends against some of the most commonly charged medical billing fraud crimes, including:

• Fraudulent billing – healthcare providers bill insurance or Medicaid of services and treatments that the patient never received.
• Upcoding – intentionally swapping out medical billing codes to replace the service that was actually provided with a more expensive one. Patterns of upcoding often alert insurers to potential billing fraud.
• Unbundling – Charging for medical services separately can sometimes result in a higher claim, such as by spreading tests out over multiple visits. If fraudulently done, it is a crime.
• Billing for ghost patients – if the patient has died, does not attend that physician anymore, or never existed, but the company will bill for services and treatments rendered to that person.
• Misrepresenting dates or locations of service – this allows providers to bill for multiple treatments or treatments that did not occur at all.

In addition to the prison sentences and hefty fines that a medical practitioner faces if convicted, they can be expelled from both Medicare and Medicaid programs for a minimum of five years. Payments from Medicare can be suspended upon an indictment. If convicted, doctors and nurses stand to lose their license to practice medicine and work in the medical field in the future. Our attorneys understand the significance of medical billing audits and the repercussions of a conviction for our clients and are prepared to provide a strong and thorough defense at every stage of the case.

False Claims Act

The False Claims Act (18 USC 287) is frequently invoked by prosecutors against suspects accused of overcharging Medicare, Medicaid, and insurers. The act imposes civil and criminal consequences and makes it a crime to knowingly submit a false claim to the federal government. If convicted, defendants face up to 5 years in prison and a fine of $250,000.00. If a corporation is convicted, then it faces a fine of up to $500,00.00. These punishments are per occurrence, so liability for convictions of this statute can be very heavy.

Social Security Act

Sections of the Social Security Act contain provisions applicable to health care providers who knowingly or willfully make false statements to the government for services paid for by a federal health care program. (42 USC 132O-7b(a)) The government must show that statements were knowingly made, that it was false, and the provider knew the statement was false at the time he or she said it. The penalty for a conviction under these sections is a fine of up to $25,000.00 or imprisonment of up to 5 years, or both.

Federal Mail & Wire Fraud

We have also defended individuals accused of Federal Mail Fraud and Federal Wire Fraud (18 USC 1341, 1343). These statutes make it a crime to use mail or wire communications to effectuate fraudulent schemes. Many communications between a healthcare provider and their patients are done through the mail. The government must show that the provider was involved in a scheme with the intent to defraud, and mail or other wire communication (such as TV or radio) were used in furtherance of that scheme. Each use constitutes a separate offense, convictions of which are punishable by a fine of up to $1,000.00 or up to 5 years in prison, or both.

The Process

Three federal agencies are charged with enforcing Medicaid and Medicare regulations: the OIG, the Department of Justice (DOJ) and the Federal Bureau of Investigation (FBI), as well as all the state-based federally funded Medicaid Fraud Control Units. Investigations typically being with the OIG who can obtain search warrants and issue subpoenas in connection with their investigation. They are reliant on the information gleaned from medical billing auditors early on, which is why it is important to get a defense attorney as soon as you are aware of the investigation. If the investigators have reason to believe that medical billing fraud is occurring, they will report the matter to the United States Attorney General. There, the prosecutors will review the matter and determine whether or not the case should be submitted to a grand jury for an indictment. Our attorneys are prepared to resolve the matter quickly and with your best interests in mind. We understand that working with the enforcement agencies and their auditors is an effective method of ensuring our clients avoid the escalation of their case.

Defenses

Often, defenses can rest on the interpretation of a medical treatment. The rules for reimbursement for services rendered can be complex, and there can be reasonable disagreements for what is medically required, particularly when there are allegations of ‘upcharging’ involved. A strong defense attorney who understands these vagaries, and has the resources to consult with experts, could be crucial in lodging an appropriate defense.

Internal Billing Audits

Our firm strongly encourages every healthcare professional to undertake internal billing audits regularly. These audits help ensure that appropriate payments and claims are being made, as well as compliance with applicable laws. Regular monitoring of internal policies and procedures is the most effective way to prevent health care fraud. Additionally, it serves as a solid defense against any claims of health care crimes, since these crimes carry an element of intent. If you can prove that your practice regularly conducts internal billing and detected no irregularity, then it is more likely the anomaly is an accident, done without intent. If, on the other hand, the audit has revealed irregularities, then the physician would have advance notice and would be able to seek the advice of competent legal counsel to discuss options and possibilities to remedy and defend against any potential lawsuit. The Office of the Inspector General encourages medical practices to engage in internal billing audits at least once a year.

External Billing Audits

This is an audit that is done by outside professionals, who are trained and specialize In billing audits. They offer an objective analysis of a practice’s billing habits. One of the advantages of an external billing audit is that it is less prone to conflicts of interest that might compromise the doctor or internal staff. It also relieves the practice of having to do it themselves. After all, there are only so many hours in the day, and for a small medical practice, an annual audit can feel overwhelming.

Compliance Planning

Regardless of the methods chosen, in addition to an audit, physicians should get a copy of the compliance program set forth by the OIG, available here, and adapt them to their own individual practices. We consult clients to ensure their plans are in line with the applicable regulations. Additionally, developing a plan to ensure compliance is another effective defense that can be presented to show that reasonable efforts have been made by the healthcare professional to avoid fraud and other malfeasance. If you have any questions about developing an appropriate compliance plan for your practice, our attorneys stay up-to-date on the latest regulations and can give you guidance in developing your plan.

Medical Billing Audit Criminal Defense

Regardless of the methods chosen, in addition to an audit, physicians should get a copy of the compliance program set forth by the OIG, available here, and adapt them to their own individual practices. We consult clients to ensure their plans are in line with the applicable regulations. Additionally, developing a plan to ensure compliance is another effective defense that can be presented to show that reasonable efforts have been made by the healthcare professional to avoid fraud and other malfeasance. If you have any questions about developing an appropriate compliance plan for your practice, our attorneys stay up-to-date on the latest regulations and can give you guidance in developing your plan. Contact The Blanch Law Firm at (212) 736-3900.