Fraud and Abuse by s5kG1aU


									Fraud and Abuse
       What does the government care about?

   Cost
   Utilization (medical necessity)
   Quality

   This is controlled directly
   The feds decide what they want to pay
   What are the constraints on pricing?
       Utilization (Medical Necessity)

   What are the issues we have seen on medical
      Is the treatment needed?

      Is it experimental?

      Is it effective?

      Is it covered by the policy

   What are the political constraints on the
    government in setting utilization rules?

   Does the government care about costs?
   What about when quality and cost colide?
   Should patients have a right to cheaper, lower
    quality care?
   Does the federal government directly control
      States?

      JCAHO?
       Fraud Issues

   Was the care delivered at all?
     Durable medical equipment scams

     Billing for more care that was actually delivered

   Was the care necessary?
   Was the care unbundled?
     (Charging separately for care that should be
      one charge)
   Where kickbacks paid?
       Related Laws

   General government contracting laws
   Mail and wire fraud
   RICO
   False Claims Act
      Statutory penalties - $5-11,000 per claim

      Treble damages (whichever is higher)

   Qui tam - private enforcement

   CPT codes - AMA
   Some are time based, like in the Krizek case
   Others are work-based
      You get paid more for doing more

      It does not matter how long you take

      Levels 1-5

   Is it better to see a lot of patients or do a lot to
    each you see?
       Why use Codes?

   Uniform billing for all claims
   Equalize billing across specialties
   Provide incentives for more comprehensive care
   Allows computerized payment
   Allows tracking of medical information derived
    from claims forms

   Anything that increases the payment for the
   Can be legal
      Optimizing coding

   Can be illegal
      Work that was not do, or work that was not

       properly documented
      Misstating the patient's medical condition
       Conditions of Participation (COP)

   The contract between the providers and CMS
   If you do not comply with the COP you can be
    denied payment or excluded from the program
   If you knowingly violate the provisions of COP it
    can be grounds for false claims and criminal
       US v. Krizek

   The judge thinks the doc is a good guy
   Criticizes the crazy reimbursement system
   Lets the doc put on evidence of standard billing
    practices to refute fraud charges
   Thinks the law is crazy because the feds can
    assess $81,000,000
       What did Krizek do wrong?

   Did he actually treat the patients?
   Was his treatment medically necessary?
   What were the issues in billing?
   Billed for 40-50 minute time code for everyone
     Who did this

     What was the justification?

     Did the doc know?
       Doc's Defense

   He really did spend the time, he just did not spend
    it all on the patient
   Lots of stuff you do in the office as part of the
       What is the Scienter requirement?

   Intent to defraud?
   Knowing that the claim is wrong but submitting it
   Why does the statute specifically say that there is
    no need to prove intent to defraud?
   What is the doc's certification problem?
       District Court Ruling

   Found liablity on the days when there were more
    than 12 codes for 50 minutes
   Thought that the doc was liable, but an
    unfortuante system
       Appeals Court

   Makes it clear that reckless ignorance is wrong
    and grounds for liability under the Act
   Is not sympathetic to the doc's claimed slipshod
      Is Bad Care Fraud?

   US ex Rel Mikes
   What would make the care fraudulent?
       Whistleblower Provisions

   Only protection if you bring suit
   Not a good protection
      Interesting issues

   Bribes by device and drug companies
   PATH audits (medical schools)
   HCA
       Qui Tam

   Standing in the shoes of the government
   15-20%
   Feds can march in
   May not apply to claims against states
What do you tell clients about False
Understanding Self-Referral Laws
       Physicians as Fiduciaries

   Model Penal Code
   Informed consent law
   General principles
      Knowledge differential

      Power differential
       Fiduciary Obligations

   The physician acts as purchasing agent for the
   Self-referral laws target incentives that encourage
    the physician to make certain decisions contrary
    to the patient's interests
      Order unnecessary care or tests

      Choose providers based on criteria other than

       the best interests of the patient
       Why Does the Federal Government Care?

   They claim to care about quality
      FTC undermines this with talk about the right to

       buy cheap, crummy care
   They care a lot about costs
      Unnecessary care is wasted money and bad for

       the patient
      It is assumed that if a kickback is necessary,

       the care is either worse or more expensive
       Problems with the Federal Bias

   The feds are only concerned with incentives to
    order more care or to steer care
   They do not care if there are incentives to deny
      Big issue with HMOS and other structured

      Underlines the problem with consumer directed

       The General Self-Referral Laws

   There is broad statutory authority banning deals
    that create incentives to refer business
   These deals have to be analyzed to map out the
    cash flow to determine what incentives the
    physicians see
       The Lease Scam

   Hospitals often own professional buildings
   Physicians in the professional are more likely to
    admit patients to the hospital
      Proximity

      Shared services

   Is the hospital providing incentives for physicians
    to be in their professional building?
   How do you put a fair market value on proximity?
       The Recruitment Scam

   The hospital sees that there is a need for physicians with
    specific skills in the community
   The hospital recruits a physician with a relocation
      Moving expenses

      Salary support for a period of time

   Does any of this obligate the physician to refer to that
   What if it is the only hospital in the community?
       The Lab Scam

   There is a huge amount of money in medical lab tests
      Hence my skepticism about the real causes of

        defensive medicine
   Is the lab providing incentives to the physician?
      Direct kickbacks

      Subsidized services, like renting space in the

        physician's office
      Gifts - trips to the fishing camp
       The Hospital Investment Scam

   Hospital wants to increase the flow of surgical
   Hospital sets up surgical suite as a separate
    corporation and sells surgeons shares
   Earnings are based on the capital contribution
   What is the impact of a admitting patients on the
    physician's return on investment?
       The Practice Purchase Scam

   Hospital buys the physician's practice
   Hires the physicians to deliver care in the new
    hospital practice
   Is this really a sale or just a kickback scheme?
   How was the business valued?
   What are the terms for payment?
      Is any of the payment contingent on referrals?
       The Stark Law Approach

   Start has a list of 11 defined services
   Any deals that influence the ordering of these
    services are banned
   There are a series of safe harbors for transactions
    that are not thought to be abusive
       Philosophy of Stark

   Simplify the law by clearly outlining the forbidden
   Create safe harbors that can be used as models
       Problems with Stark

   Too much money in the forbidden areas
   Doc and hospitals go the extra yard to game the
   Spotty to non-existent enforcement
      No clear boundaries

      Puts complying entities at a completive

       Exceptions to Stark

   Physician controlled ancillary services
      If the doc runs the lab and it is part of the

       practice, it is not covered by Stark
      What is the incentive?

      Is it even worse than for an outside lab?
       Analyzing Stark Transactions

   Is it a covered service?
   Does it met the ancillary service exception?
   Is there any financial linkage between the provider
    and the referring doc?
       The Integrated Provider Exception

   Integrated providers provide both medical and
    hospital and other services
   It is OK to tell employees where to refer patients
   You cannot pay employees a bonus for referrals,
    but they can share in the profits (gain share)
   Does this exception make any sense?
   Does it just provide a way for hospitals to avoid
    self-referral laws by buying physician's practices?

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