It’s no secret that fraud and abuse actions have seen a significant uptick in recent years with the government reporting that for fiscal year 2023, settlements and judgments under the False Claims Act alone were the highest they had been in a single year, exceeding $2.68 billion. Because of increasing focus and scrutiny in the healthcare industry, it is crucial to understand fraud and abuse laws, how they apply to your healthcare organization and educating staff and responsible team leaders on ways to spot issues that can result in potential violations.

The primary healthcare fraud and abuse laws include the False Claims Act [31 USC §§ 3729-3733], the Anti-Kickback Statute [42 USC §§ 1320a-7b(b)], the Physician Self-Referral Law (Stark Law) [42 USC § 1395nn], the Exclusion Statute [42 USC § 1320a-7] and the Civil Monetary Penalties Law [42 USC § 1320a-7a]. The importance of compliance with these laws stems most obviously from striving to operate ethically and efficiently, but violations of these laws can lead to criminal penalties, fines, and even loss of Medicare certification or medical licenses. Additionally, certain areas of healthcare receive heightened scrutiny from the government because they are seen as high risk for fraud and abuse, as highlighted in the summaries below. Therefore, it is important to regularly evaluate your practice for conformity with all applicable laws and rules.    

Telehealth

In a recent telehealth matter, the government alleged that psychiatric providers submitted improper and false claims for “telehealth originating site facility fees.” A telehealth visit involves an exchange between a patient at an originating site (e.g. a nursing home) and a physician, or other qualified healthcare professional, at a distant site. The applicable billing rules and guidance allows payment for a “telehealth originating site facility fee” in addition to the professional fee for the underlying service being provided. However, as in this case, the codes can only be billed by the originating site when the facility provides administrative and clinical support for a patient receiving services via telehealth. The government alleged that the psychiatric providers submitted, or caused to be submitted, improper and false claims for “telehealth originating site facility fees,” which should only have been billed by the nursing homes. The government settled with the psychiatric providers for $4,595,739.

Takeaway: Ensure proper billing and coding of claims and perform audits to ensure compliance. 

Medically Necessary Services

Another prominent area of risk is medically necessary services. In a settlement for $14,902,000, the government settled with a physician group in a matter alleging that the group knowingly submitted claims for certain Evaluation and Management (E&M) codes for services related to the management of chronic care patients in assisted living and other care facilities that were not provided in conformity with applicable federal requirements. The settlement resolved allegations that the physician group knowingly submitted claims that did not support the level of service provided.

Takeaway: Ensure services rendered meet the requirements for the level of service billed. “Upcoding” is a high-risk focus area. Again, periodic auditing of claims could identify potential issues.

Kickbacks

A hospice company in Georgia, along with its owners and managers, agreed to pay $1.4 million to resolve allegations that they violated the False Claims Act by entering into kickback arrangements with medical directors in exchange for referrals of hospice patients. A former employee of Tapestry filed a whistleblower complaint alleging that the hospice paid kickbacks to medical directors to induce them to refer patients to the hospice company. According to the government, these alleged kickbacks included monthly stipends and a signing bonus paid to the medical directors, and the compensation allegedly increased when the medical director referred more patients and decreased when the medical director failed to make referrals.   

Takeaway: Closely evaluate when accepting goods and services or when entering into compensation arrangements to ensure commercial reasonableness and fair market value.

Final Takeaway – Compliance Programs

As mid-year approaches, now is a good time to evaluate your practice policies and procedures to avoid running afoul of fraud and abuse laws. Perhaps the most beneficial advice to help avoid fraud and abuse is to establish and strictly follow a compliance program. A good compliance program has several facets and there are numerous resources to assist providers in developing effective programs. As an initial matter, internal auditing to identify key risk areas is important for developing measures for a compliance program geared toward your particular area of healthcare. When implementing standards, designating a compliance officer to coordinate and oversee the program and to provide appropriate education for other employees is vital. With education on compliance, employees should be encouraged to have more open lines of communication and be well-versed on disciplinary standards if compliance is not upheld.

Even with knowledge on compliance programs, you may still be asking yourself, “What do I do if I find there’s a problem regarding fraud or abuse within my organization?” First, stop the potential activity that could be in violation of the law. Next, seek legal counsel from attorneys that are well-versed in your healthcare field. Seeking out legal help can aid you in determining whether a violation has occurred, whether corrective action is needed, such as whether an overpayment has been made, and potentially reporting the issue to the proper entities. Taking proactive steps can also improve the organization’s position and potentially mitigate any enforcement. 

Finally, there are a number of resources available to assist in developing compliance programs.  The Office of Inspector General is a good place to start, and it recently issued general compliance guidance for health care providers (https://oig.hhs.gov/compliance/general-compliance-program-guidance/).