Healthcare

Fraud Trends

Module 5

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Christopher Cannell DMSc, MPAS, PA-C, DFAAPA�Emergency & Hospital Medicine | Orthopedics �Emergency Medicine CAQ

President of PAs in Legal Medicine

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Michael Cohen DHSc, JD, PA-C

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IN PARTNERSHIP WITH CM&F GROUP

Introduction to Healthcare Fraud

Module Objectives

• Define healthcare fraud and identify common fraudulent practices

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• Examine the legal ramifications of healthcare fraud for PAs
• Develop strategies to mitigate risks associated with fraud in healthcare

Healthcare Fraud

Legal Consequences

• Definition: Healthcare fraud involves intentional deception or misrepresentation by medical providers, patients, systems, or enterprises to receive illegal benefits or payments.

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• Fraudulent actions are inconsistent with sound fiscal, business, or medical practices.

• Unnecessary costs or reimbursements for services that are not medically necessary.
• Failure to meet professionally recognized standards for healthcare.

Impact of Healthcare Fraud

Financial Burden:

• Healthcare fraud is estimated to cost the U.S. healthcare system $100-$300 billion annually.
• DOJ and NHCAA estimate 3% to 10% of healthcare spending is lost to fraud.

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Consequences:

• Involvement in fraud leads to significant fines, imprisonment, and loss of licensure.
• Healthcare fraud is a felony with severe legal repercussions.

DOJ = Department of Justice NHCAA = National Healthcare Anti-Fraud Association

Examples of Healthcare Fraud

• Billing for Services not Provided: Charging for medical services that were never rendered.

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• Misrepresentation of Services: Coding a service as more expensive than what was actually provided (upcoding).

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• Unnecessary Procedures: Performing medically unnecessary services for financial gain.

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• Documentation Errors: Intentional falsification of medical records to justify higher reimbursement.

Case Study

Fraudulent Genetic Testing

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Situation: A PA in North Carolina was sentenced to 72 months in prison for involvement in a $10 million Medicare fraud scheme.

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The scheme involved signing prescriptions for unnecessary genetic testing.

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The PA had no patient/provider relationship with the patients but received $12-$15 per consultation, totaling significant personal gain.

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Source: Candello Report on Medical Professional Liability

$3.6 million in restitution.

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Significant damage to the healthcare system and public trust.

Outcome

Common Types of Healthcare Fraud

• Fraudulent Billing Practices:
• Phantom billing: Charging for services never provided.
• Upcoding: Assigning higher-cost procedure codes.
• Overcharging: Billing patients and insurers excessively.

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• Kickbacks:
• Prohibited under the Anti-Kickback Statute.
• Incentives to providers for referrals or exclusive product use.

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• False Claims:
• Submitting fraudulent claims to federal programs like Medicare or Medicaid.

Legal Ramifications of Healthcare Fraud

• False Claims Act (FCA):
• Imposes liability for knowingly submitting false claims to the government.
• Penalties include fines up to three times the damages and additional civil penalties.

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• Anti-Kickback Statute:
• Prohibits the exchange of remuneration for referrals.
• Penalties include criminal fines, imprisonment, and exclusion from federal healthcare programs.

Case Study

Telemedicine Fraud

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Situation: A PA electronically signed fraudulent orders for unnecessary cancer genetic testing through a telemedicine scheme.

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Medicare was defrauded of $7.3 million.

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The PA received $212,000 in payments.

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• Guilty plea to federal charges.

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• License revoked and sentencing of up to 10 years imprisonment.

Outcome

Risk Mitigation Strategies

Follow CMS Coding Guidelines:

• Ensure accurate billing practices.
• Avoid upcoding or assumptions in documentation.

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Verify Documentation:

• Complete, accurate records reflecting actual services provided.

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Participate in Compliance Programs:

• Consult compliance officers for guidance.

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Whistleblower Protections:

• Report fraudulent activities without fear of retaliation.

Case Study

Whistleblower Example

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Situation: An oncology practice in Texas violated the FCA and Anti-Kickback Statute.

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A whistleblower reported illegal referral payments between the practice and a diagnostic lab.

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• $4 million settlement.

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• Whistleblower awarded a percentage of the recovery under the FCA.

Outcome

Summary

1. Fraud undermines healthcare integrity and patient trust.
2. Legal, financial, and professional consequences for involvement in fraudulent activities are severe.
3. Ethical and transparent practices are essential to maintaining the credibility of the healthcare system.

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Key Takeaways

1. Healthcare fraud involves billing for services not rendered, upcoding, and receiving kickbacks.
2. Fraud results in civil and criminal penalties, including imprisonment and loss of licensure.
3. Maintain accurate documentation and use whistleblower protections to prevent involvement in fraudulent activities.

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Centers for Medicare & Medicaid Services (CMS): Compliance and fraud prevention guidelines - https://www.cms.gov

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· U.S. Department of Justice: Overview of the False Claims Act - https://www.justice.gov/civil/false-claims-act

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· Office of Inspector General (OIG): Anti-Kickback Statute information - https://oig.hhs.gov/compliance

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Resources for Further Reading:

1. Szewczyk T, Sinha MS, Gerling J, Zhang JK, Mercier P, Mattei TA. Health Care Fraud and Abuse: Lessons From One of the Largest Scandals of the 21st Century in the Field of Spine Surgery. Ann Surg Open. 2024;5(2):e452. Published June 18th, 2024. doi:10.1097/AS9.0000000000000452
2. NHCAA. The Challenge of Health Care Fraud. https://www.nhcaa.org/tools-insights/about-health-care-fraud/the-challenge-of-health-care-fraud/. Accessed December 20th, 2024.
3. National Health Care Fraud Enforcement Action Results in Charges Involving over $1.4 Billion in Alleged Losses. The Department of Justice website. Last updated September 17, 2021. Accessed December 20th, 2024. https://www.justice.gov/opa/pr/national-health-care-fraud-enforcement-action-results-charges-involving-over-14-billion
4. North Carolina Physician Assistant Sentenced To Six Years In Prison For Role In $10 Million Telemedicine Fraud Scheme. Department of justice website. October 4, 2024. Accessed December 23, 2024. https://www.justice.gov/usao-wdnc/pr/north-carolina-physician-assistant-sentenced-six-years-prison-role-10-million
5. FBI. Health Care Fraud. FBI website. June 01, 2016. Accessed December 20th, 2024. https://www.fbi.gov/investigate/white-collar-crime/health-care-fraud.
6. Fraud and Abuse Laws. Office of the Inspector General website. Accessed 12/20/2024. https://oig.hhs.gov/compliance/physician-education/fraud-abuse-laws/#:~:text=Criminal%20penalties%20for%20submitting%20false,fraudulent%20claims%2C%20as%20discussed%20below.
7. Wool HS, Barrett D. AVOIDING SELF-REFERRAL: UNDERSTANDING THE STARK LAWS. Med Econ. 2015;92(7):40-41.
8. Huttinger R, Aeddula NR. Stark Law. [Updated 2022 Oct 6]. In: StatPearls [Internet]. Treasure Island (FL): StatPearls Publishing; 2024 Jan-. Available from: https://www.ncbi.nlm.nih.gov/books/NBK559074/

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• Florida Physician Assistant Pleads Guilty to a $7.3 Million Health Care Fraud Conspiracy. US attorney’s office district of New Hampshire. December 3rd, 2024. Accessed December 19th, 2024. https://www.justice.gov/usao-nh/pr/florida-physician-assistant-pleads-guilty-73-million-health-care-fraud-conspiracy
• Podberesky, M, Fry, T. Eleventh Circuit Affirms Order for $1.195 Million in Restitution and 48 Month Sentence in Commercial Insurance Healthcare Fraud Case. The FCA Insider website. July 25, 2023. Accessed December 20th, 2024. https://www.thefcainsider.com/2023/07/eleventh-circuit-affirms-order-for-1-195-million-in-restitution-and-48-month-sentence-in-commercial-insurance-healthcare-fraud-case/
• 18 U.S. Code § 1347 - Health care fraud. Legal information institute website. March 13, 2010. Accessed December 23, 2024. https://www.law.cornell.edu/uscode/text/18/1347
• Policies and Procedures for PA Disciplinary Matters. NCCPA website. Last Revised: November 2020. Access December 20th, 2024. https://www.nccpa.net/wp-content/uploads/2020/09/Policies-and-Procedures-for-PA-Disciplinary-Matters.pdf
• Former physician's assistant sentenced for health care fraud after posing as a licensed practitioner. US attorney’s office Northern District of Georgia. 4/18/2023. Access 12/19/2024. https://www.justice.gov/usao-ndga/pr/former-physicians-assistant-sentenced-health-care-fraud-after-posing-licensed
• Kim, S. Physician’s Whistleblowing Leads to $4 Million False Claims Act Settlement Over Kickback Allegations. Whistleblower network news website. April 9th, 2024. Access December 20th, 2024. https://whistleblowersblog.org/false-claims-qui-tam-news/physicians-whistleblowing-leads-to-4-million-false-claims-act-settlement-over-kickback-allegations/

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References