The scope of “designated services” is very broad:
- Clinical laboratory services;
- Physical therapy, occupational therapy, and outpatient speech language pathology services;
- Radiology and certain other imaging services;
- Radiation therapy services and supplies;
- DME and supplies Osuch as when a urology group sells urinary catheters)
- Parenteral and enteral nutrients, equipment, and supplies;
- Prosthetics, orthotics, and prosthetic devices and supplies;
- Home health services;
- Outpatient prescription drugs; and
- Inpatient and outpatient hospital services.
There are both criminal and financial penalties for a Stark violation. A Stark violation will trigger sanctions under 42 USC 1320a-7, the Federal Exclusion Statute. And .... even if you were fooled by a slick business partner, you the physician, are still personally on the hook. The Stark law is a strict liability statute, which means proof of specific intent to violate the law is not required. If you are stuck in a business relationship where your license is embroiled in the Stark violating business, we can (at times - no guarantees !) extricate you and save your license.
In terms of sentencing the USSC (United States Sentencing Commission) has outlined key facts that increased the sentence for health care fraud and one factor that decreased the sentence. The percentages indicate the percentage of sentences that were enhanced or decreased due to this factor. The average sentence for health care fraud was 30 months.
What Happens to Doctors Charged with Healthcare Fraud?
Factors that Increased the Federal Sentence
♦ the number of victims or the extent of harm to victims (16.9%); ♦ conviction of a federal health care offense involving a government health care program and a loss or more than $1 million (32.6%); ♦ using sophisticated means to execute or conceal the offense (20.2%);5 ♦ using an unauthorized means of identification (4.5%); ♦ leadership or supervisory role in the offense (25.2%); ♦ abusing a public position of trust or using a special skill (34.4%); ♦ obstructing or impeding the administration of justice (8.5%).
Factors that Decreased the Federal Sentence
Sentences were decreased for: ♦ minor or minimal participation in the offense (6.1%)
Cooperation
Attorneys pay attention to “cooperation”. This is a key sentencing factor in federal cases. Cooperation means you admit what you did early in the process and assist in prosecuting other persons involved. 40.7%f the persons sentenced received a substantial assistance departures. This means 40% cooperated with authorities against others.
United States Sentencing Commission - Quick Facts re: Health Care Fraud Sentencing
Daniel Horowitz is a physician lawyer. He is not a hospital lawyer and never will be. Your medical practice and your hard earned professional integrity deserve respect and protection. Daniel Horowitz is dedicated to the individual doctor and small-medium sized medical groups. Our main office is in Lafayette, California (Contra Costa County). We represent doctors throughout the state of California and in federal courts nationwide.
What is the AKS (Anti Kickback Statute)
The Anti-Kickback Statute (AKS) is simpler and easier to understand compared to the Stark Law. This federal law prohibits the exchange of anything of value to induce or reward the referral of federal healthcare program business. Essentially, it means you cannot give or receive something in return for a federal healthcare payment.
Purpose of the AKS
The AKS aims to prevent fraudulent and abusive practices in the healthcare industry, ensuring that medical decisions are based on patient interests rather than financial incentives. For example, a medical group that heavily advertises but provides minimal actual care might refer patients to other doctors based on who pays the most, rather than the quality of care.
Subtle Kickbacks
There are many subtle ways to give a kickback. For instance, if a physical therapist refers patients for surgery, and the surgeon then refers their patients back to the therapist for post-surgery rehab, is this an AKS violation? The AKS makes it illegal to offer, pay, solicit, or receive anything of value (remuneration) in exchange for referrals or recommendations for services covered by federal healthcare programs like Medicare and Medicaid. Is this a quid pro quo, or is it mutual respect and responsible medical referral?
Fairness of the AKS
The AKS is fair in that there is no violation unless there is actual proof of a knowing and willful intent to break the law. However, ignorance of the law is no excuse. If you violate the AKS, you are guilty even if you did not intend to break the law. Physicians conducting worker’s compensation evaluations are sometimes scrutinized for AKS violations if there is an implication that favorable evaluations are traded for more client/patient referrals.
18 USC 1347 the Federal “Catch-All Fraud Statute
Billing fraud and more generally health care fraud, is a overly broad area. There are thousands of pages of rules and regulations and many other relevant statutes. These include 18 USC 1347 (Plain Vanilla Health Care Fraud), 18 USC 1349 (Conspiracy related to Health Care Fraud), 18 USC 1035 (Health Care related false statements) and 18 USC 1956 (money laundering related to health care fraud).
Danger Areas
Upcoding, unbundling, self referral – the list of billing fraud landmines seems endless. Often normal billing is seen as billing fraud when a disgruntled employee or competitor makes a complaint. Even anonymous complaints to the medical board or chiropractic board can trigger a criminal investigation. Worker’s Compensation is a current hot spot for investigations. Fraud investigators are using computer programs that track usage of billing codes (charted against CPT code use in the general practice population for your area).
California “Hot Button” – Physician’s Rx Network
Physicians Rx Network provides creams and medications for physician’s patients. They provide the materials, bill and keep 20% of the gross revenue. They also provide urine testing for drug use, prescription compliance. For a variety of reasons, the use of this service is placing physicians under an investigative microscope. Has the physician disclosed his/her profit in the prescription filling process ? Is the prescription truly medically necessary ? With urine tests there are inquiries along the same lines. Is there a payment for the referral ? Are referrals necessary ? Is the referring MD making a large profit by reviewing the results ? Beware the non-physician run profit centers that may give even the appearance of impropriety.
WHY HIRE DANIEL HOROWITZ ?
Does Your Case Justify Hiring a Specialist ?
Daniel Horowitz is a criminal defense law specialist. That certification is granted by the State Bar of California Board of Legal Specialization. There are many excellent criminal defense attorneys who have not obtained this certificate but consider this; to be a specialist, a criminal defense lawyer must “survive” peer review, judicial review, pass a comprehensive written exam, and have practical experience significantly above that of the average defense lawyer. To maintain the certificate, the criminal defense attorney must complete advanced level continuing education courses that focus on the criminal defense specialty. Daniel Horowitz has been a certified specialist for over 20 years. As of 8/23/2017 there was only 1 criminal defense specialist in Walnut Creek, California, 2 in Lafayette and approximately 200 statewide. This expertise and extensive healthcare fraud experience, makes the Horowitz office a first choice for those wrongfully accused.
STARK LAW PITFALLS & IN HOUSE STARK EXCEPTIONS
Another puzzle. Various websites and local groups encourage cross-referrals between local businesses. That’s fine between an attorney and a stationary store, but what if you are a physician and you agree to cross referrals with a particular MRI facility ? We are not aware of any prosecutions based upon this type of referral, but the possibility is there and are tracking the law on this subject.
And what do you do when you want to sell urinary catheters, back braces, skin cream or provide in house massage, in house physical therapy and other "in house ancillary services? Click the button below to learn some of the critical exceptions to the Stark Law Prohibitions.
Computers Used to Track Medical Billing (Fraud?)
The Journal of the American Academy of Psychiatry and the Law published an article in 2009 titled “Health Care Fraud: Physicians as White Collar Criminals.
In 2008, the Journal of Healthcare Information Management published an article detailing how billing tracking by computer (via the National Health Information Network, was a new tool to uncover fraud. <<Read IT Fraud Article Abstract>> Many years later, billing tracking by computer has led to increase in investigations and a focus on computer identifiable fraud as the focus of physician based, criminal investigations.-
The SIU units often focus on the higher end billing codes e.g. 99215, 99245. Even though they claim to apply the AMA CPT code rules for their review, they DO NOT. The insurance company’s presume that a 99215 or 99245 actually took 40 minutes / 80 minutes (respectively). The CPT codes require levels of complexity and the time component is an alternative. However, the insurers find suspect visits that do not include a time documentation as well.
HEALTH CARE CRIMES & PROBLEM AREAS FOR BILLING FRAUD
The list seems endless. Here are more state and federal health fraud laws and some common “hot button” areas for medical practices.
1. California Penal Code Section 550 (Similar as a “catch-all” to 18 USC 1347, the Federal Health Care Fraud statute)
In California, Penal Code section 550 is used as a catch-all provision for health fraud by physicians, providers of ancillary services and even attorneys representing injured workers.
(a) It is unlawful to do any of the following, or to aid, abet, solicit, or conspire with any person to do any of the following:
(1) Knowingly present or cause to be presented any false or fraudulent claim for the payment of a loss or injury, including payment of a loss or injury under a contract of insurance.
This section is often used in very creative and aggressive ways. Minor violations and billing disputes are rocketed into a felony charge (PC 550) because any error or minor infraction can be deemed a “false claim” once it is put in the form of a bill sent to an insurance company.
Chiropractors forming medical corporations with physicians are often charged with this section and with practicing medicine without a license. Physicians and chiropractors may see this charge filed in the context of anti-kickback or self referral charges made more serious by being charged under this felony section. Physicians operating physical therapy centers and chiropractors who do more than simple adjustments are the targets of special scruitiny.
2. Beneficiary Inducement Statute
The beneficiary inducement statute (42 U.S.C. § 1320a-7a(a)(5)) imposes financial penalties on Medicare / Medicaid providers if they pay patients to use their practices. Seems easy to avoid. But what is payment ? Does your medical practice provide free ancillary services that medical other practices bill for ?
What about free diagnostic services provided by an imaging center for you and your office staff? How many chiropractic offices advertise free diagnostic exams or free massage with treatment ? Can you waive copayments for client’s having financial difficulties ?
3. Stark Law
Stark is a trap for the entrepreneurial MD. A violation of Stark does not require bad motives. A simple misreading of the law can lead to massive civil penalties.
Stark creates liability for self referral of clinical laboratory services, physical therapy, radiology, MRI’s, prosthetics, orthotics, outpatient Rx’s, and many other services.
Reading the statute is not enough to answer “self referral” questions. A lot of times, you have to press forward without knowing whether or not you have violated the law. Even reliance on advice from an attorney may not be a defense. As written and enforced, Stark is often a great wet blanket over health care innovation.
The penalties are financially crushing. A medical practice that submits a Medicare claim in violation of Stark will have to pay back the entire amount of the claim. This is true even though the patient got real, medically necessary treatment. Parties that knowingly violate Stark will have (potential) False Claims Act liability and “program exclusion”.
4. Modifier 25
The use of Modifier 25 is often the subject of upcoding claims. Modifier 25 allows additional payment for a separate E&M service rendered on the same day as another procedure. Upcoding and billing fraud, can be alleged if Modifier 25 is used when the additional care is not significant. If you ask, what is or is not “significant”, the cynical lawyer’s answer is this.
“It depends upon how often you use the modifier and what a paid government (hired gun) expert says is the norm.”
5. Rosacea & Other Problem Conditions
Are lasers legit for treating rosacea ? Can you bill an insurance company for it? The answer is, “Yes” then “No”. It depends upon when you ask the question. And even if it were reimbursable, “what is rosacea”? What is treatable “rosacea”? For acne and other conditions, who can treat ? A PA ? An esthetician ?
Medical judgments will be questioned. Poor SOAP notes, lack of photos documenting the diagnosis, angry fired staff – can all cause an avalanche of misery for even an honest practitioner. Here is one clue. Does your practice on average, bill higher per patient ? Does your practice utilize a certain profitable procedure, cost saving delegation of tasks, more than a typical practice of your type ?
6. Big Pharma is the New Boogeyman
Everyone knows that drug companies are evil and are ripping off the public. Or so that meme “informs” public opinion.
So, how does that impact an honest medical practitioner ? Not much if you simply prescribe. But if you engage with and interact with pharmaceutical companies, you may get some scrutiny.
Is a pharmaceutical or device company giving your consulting or speaking fees ? Great ! ….. but is there a connection between those fees and your use of their products ? Check out this website “Dollars for Docs” that tracks drug company payments to MD’s. There is no similar website (that we know of), that tracks payments by herbal remedy companies or homeopathic (we are only selling placebo water !) companies. In Dan Horowitz’ opinion, you are safer promoting “natural”, “herbal remedies”, than you are promoting medications that are double blind tested and subject to rigorous testing. It is a strange time to be an evidence based physician.
The dividing line between your being a valuable consultant and being paid off is not always clear. For organized confusion read the OIG Compliance Program Guidance for Pharmaceutical Manufacturers. Federal Register
7. Obvious Red Flags
Some red flags are obvious. SIU healthcare fraud investigations often follow complaints by vengeful employees or patients. Many SIU investigators rely upon reviews of spreadsheets or complex computer fraud models.
Grey areas of practice like in office physical therapy (PT) and use of laser in treatments and procedures, as well as delegation of work to nurse practitioners (NPs), physician assistants (PAs), aestheticians, are all potential SIU fraud triggers. If you have a feeling that your bills are being handled more slowly, that strange patients are presenting with peculiar symptoms, if you recently fired a staff person …. be wary. The vague parameters of the Chiropractic Initiative Act make scope of practice determinations very subjective. The use of low frequency sound waves may be outside the scope of chiropractic but high frequency sound may be within the scope.
Your Arrest May Help A Politician
Remember that Medicare billing fraud is the focus of many federal investigations. Workers compensation fraud is a major focus of many state insurance commissioners. In California the catch all fraud provision (Penal Code Section 550) is sometimes used to bootstrap misdemeanor offenses into felony fraud charges. Fraud defense lawyers know that politics drive medical fraud prosecutions. Many practices have grey areas and if your “grey” is in the political cross hairs, be cautious.
