For more than a decade, state and federal agencies have made the prosecution of fraud and abuse in government healthcare programs a top priority, second to violent crime. Recent events in California show that law enforcement activity remains undiminished. The following two examples are illustrative.
Approximately two years ago, scores of armed FBI agents executed search warrants in Redding, California against the Redding Medical Center and several doctors’ offices. The hospital and at least one heart surgeon and cardiologist were targets of the investigation based on allegations of Medicare and Medicaid fraud arising from allegedly unnecessary heart surgeries and invasive cardiac procedures. Teams of agents from the FBI, the U.S. Department of Health and Human Services, and the Internal Revenue Service were involved in the investigation, which is ongoing. More recently, in September 2004, the Medi-Cal Fraud Unit of the California Attorney General’s office filed criminal charges in Stanislaus County against twenty-one dentists alleging they had committed systematic fraud against the Medicaid Program known in California as the "Denti-Cal" program. People v. Kyon Maung Teo, DDS, et al.
These are notorious cases. They represent a consistent pattern of highly aggressive law enforcement. In the past three years, several state agencies including the California Department of Health Services and a special unit in the California Attorney General’s office, joined forces to intensify the investigation and prosecution of Medicaid fraud. In addition, federal and state agencies are now sharing information. A physician, clinic, or laboratory under investigation by a state agency may also become the subject of civil or criminal prosecution by the U.S. Attorney. Both state and federal agencies are particularly aggressive in pursuing allegations of unnecessary treatment; illegal self-referrals or kickback arrangements, which can create incentives to unnecessary treatment; and any identifiable pattern of upcoding claims.
The clear message to all health care providers who participate in the Medicare or Medicaid programs is that a provider puts his or her professional reputation on the line with every bill submitted to the government. Whether an incorrect billing will be treated as an innocent mistake or a conscious attempt to commit fraud depends upon the perspective of the beholder. For this reason, every Medicare or Medicaid provider should make it a high priority to clearly and correctly document his or her services to Medicare and Medicaid beneficiaries, and to carefully review their compensation arrangements.
In sum, the best approach to avoid an enforcement action is to maintain legible, comprehensive medical records, and to ensure that all claims for reimbursement are supported by the medical records. Given the complexity of reimbursement rules and the severe consequences for improper compensation arrangements and incorrect billing, it is imperative that all staff are properly trained and that they have regular continuing education. The most obvious demonstration of a provider’s commitment to proper billing is to put in place a compliance plan. A compliance plan does not need to be complex, but it should be tailored to the specific healthcare provider.
With careful attention to compliance with the reimbursement rules, providers can avoid unwanted and undeserved problems with the government.