Every day physicians hear horror stories about the latest fraud and abuse statistics. For example, in 2009 whistleblowers received $163 Million in Rewards. The National Health Care Anti-Fraud Association estimates annual Medicare fraud at $68 Billion. In 2010, the U.S. Government collected more than $4 Billion in settlements and judgments in health care fraud cases, the OIG excluded 3,340 individuals and organizations from federal health care programs (9 per day).
As of January 2011, there were 1,341 False Claim Act “whistle-blower” lawsuits under seal. Closer to home, in 2010 the U.S. Attorneys’ Office in Birmingham obtained criminal judgments of nearly $2.1 Million and Alabama Medicaid suspended 132 providers.
Notwithstanding all of the statistics, there are simple steps physicians can take to protect themselves from becoming subjects of lawsuits or losing substantial revenue. These steps include conducting background checks of staff and other physicians, notifying CMS of the practice's change in information, conducting billing audits and properly transitioning the practice when a physician leaves the practice.
It is common knowledge that no federal health benefit payments are permitted for services furnished by persons excluded by CMS. Additionally, the government may impose a civil monetary penalty of up to $10,000.00 for each item or service furnished during the exclusion period. Considering this prohibition, the number of physician practices hiring excluded individuals is surprising. Checking an employee's or physician's background status for exclusion is relatively simple and there are readily available sources of information to review. These include the OIG Exclusion List and Excluded Parties List System located at http://oig.hhs.gov/fraud/exclusions.asp; http://www.epls.gov and the Alabama Medicaid Exclusion List which can be found at http://www.medicaid.alabama.gov/CONTENT/7.0_Fraud_Abuse/7.7_Suspended_Providers.asp.
Both lists are updated frequently and provide enough information to determine if a candidate has been excluded or if additional research is needed. Other readily available sources of information are the Alabama Board of Medical Examiners (www.albme.org) and the Alabama Board of Nursing (www.abn.state.al.us).
Another area that has caused physician practices to lose large sums of revenue is the failure to notify CMS of a change in information. A CMS contractor may deactivate a provider's Medicare billing privileges when a provider fails to report a change in the information supplied on the enrollment application typically within 90 calendar days of when the change occurred. Examples of changes that must be reported within 90 days include a change in practice location, a change of any managing employee and a change in billing services. A provider must also report a change in ownership or control in the practice within 30 calendar days, such as when a physician buys the physician practice.
If a provider has their billing privileges revoked they are barred from participating in the Medicare program from the effective date of the revocation until the end of the re-enrollment bar. The re-enrollment bar is a minimum of 1 year, but not greater than 3 years depending on the basis for revocation. Consequently, although the deactivation of Medicare billing privileges is technically slightly different than the termination of a Medicare provider agreement, Medicare will not pay a provider for a period from 1 to 3 years, which will have the same devastating financial impact on the practice.
With the ever increasing number of alphabet soup audits by Medicaid and Medicare such as RAC, ZPIC, etc., billing audits are more important than ever. Although providers must be extremely careful when structuring billing audits of their practices, a properly structured audit will lead to positive returns for the practice. Properly billing and coding is essential to a healthy practice and will help eliminate many sleepless nights - neither up coding nor down coding is appropriate for physician practices. While the exposure created by up coding is obvious, many physician practices down code out of an abundance of caution. As a result, many practices' revenues are substantially smaller than what is justly earned by the physicians.
A properly structured audit program may include a review of payer mix, analyze evaluation and management codes for correctness and consistency, identify and eliminate causes of rejected charges and develop an expedited system for resubmission. The investment in a sound audit program will not only help reduce or eliminate recoupments by Medicare or Medicaid it will also help the physician practice collect revenue it is legitimately entitled to collect.
Another area that has led to an abundance of legal disputes involving physician practices in recent years is the result of physician practices expanding and disbanding. Many issues arise over the departure of a physician, including the proper accounting of the departing physician's compensation, particularly if based on the physician's accounts receivable. It is important for the practice to either use a simple compensation formula upon departure by a physician or maintain sound financial records so it can prove the proper compensation payable to the departing physician.
Another area of heated dispute involves the patients - whose patients are they, the practice's or the individual physicians and who is responsible for notifying the patients of the physician's departure. If the departing physician plans on remaining in the area arguments often times arise between the departing physician and the remaining physicians because each wants to keep the patients.
The Alabama Board of Medical Examiners ("ABME") requires that "when a physician retires, terminates employment or otherwise leaves a medical practice, he or she is responsible for ensuring that active patients receive reasonable notification and are given the opportunity to arrange for the transfer of their medical records." The reason behind the rule is to alert patients of their treating physician's departure to prevent the disruption of the patient's continuum of care.
Legal disputes often arise over who are "active" patients, who should send the notification and how to arrange the transfer of medical records. Although most employment contracts contain a standard provision that states all patients treated by the physician while an employee of the practice are patients of the practice, often times the departing physician has the personal relationship with the patients and when asked the patients chose to follow the departing physician. Thus, it is helpful to define the parties' responsibilities in the employment contract upon the departure of a physician.
With proper planning and attention to details, physician practices can avoid the harsh results of fraud or abuse allegations and the disruption to the practice caused by a departing physician.
Jim Hoover is a partner in Burr & Forman LLP's health law section who represents many healthcare providers in healthcare compliance efforts and legal disputes. This article has been summarized from a segment on ResultsMatterRadio recorded on July 8, 2011. To listen to the segment and other segments please visit www.resultsmatterradio.com.
