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Fraud and the Emergency Physician

2002; Lippincott Williams & Wilkins; Volume: 24; Issue: 4 Linguagem: Inglês

10.1097/01.eem.0000334172.57221.16

1552-3624

Jonathan Glauser,

Medical Malpractice and Liability Issues

The Department of Justice reports that after violent crime, health care fraud is its top priority. Losses from fraud in the health care industry were estimated to be between $80 billion and $90 billion a year as of 1996. A 1997 report from the Department of Health and Human Services Office of the Inspector General concluded that in fiscal year 1996, net overpayments by Medicare totaled about $23.2 billion. Fraud is defined in various sections of the United States Code. For these purposes, quackery and misconduct in health care research will be reserved for another time. Fraud here will concentrate on money: “an intentional deception or misrepresentation that the individual or entity makes…that…could result in some unauthorized benefit to the individual, or the entity, or to some other party.” Many doctors may run afoul of the law without knowing it or without intending to do so The National Health Care Anti-fraud Association has placed loss to outright fraud between three and five percent of all health care spending; some organizations say it as high as 10 percent. The Health Insurance Association of America performed a survey of private insurers' health care fraud investigations, and broke it down as follows: 43 percent in fraudulent diagnoses, 34 percent in billing for services not provided, 21 percent in waivers of deductible or co-payment, and two percent in other ways. Lawyers are not immune from claims of health care fraud either. In United States v. Anderson, attorneys were charged for conspiracy to defraud the federal government in a scheme with their physician clients. In that case, the attorneys were charged with facilitating the offer and payment of monetary bribes and other remuneration by crafting sham agreements to conceal the fact that Baptist Medical Center was paying for patient referrals. That is, by structuring business ventures so that their hospital client could continue to receive patient referrals from nursing homes, the attorneys violated the anti-kickback statute. While the number of health care fraud cases pending at the Department of Justice skyrocketed from 290 cases in 1992 to more than 4,000 by 1997, this was a landmark case because the lawyers who aided physician fraud were targeted. Even scarier to physicians should be crimes involving fake medical bills for services never provided, as was reported in the New York Times in 1998. Phony bills with names of patients and unsuspecting doctors were submitted to private insurers by individuals pretending to be billing agencies or medical practices. Of course, post office or drop boxes were used for only a few weeks, and some doctors found themselves in trouble with the IRS for not reporting income they never received. Prosecuting Physicians Although there are myriad laws used to prosecute physicians, they can be separated into broad categories: ▪ Conspiracy to commit offense or to defraud the United States is the first. Mail fraud can be included here as well. In fact, it is almost incomprehensible that false, fictitious, or fraudulent claims for money or property can be made to insurers and government programs without involving the mail in some way. Under the federal mail statute, anyone who uses the mail or any private or commercial interstate carrier to defraud is guilty of mail fraud. In fact, it may be enough that the defendant knows that letters are likely to be mailed in the execution of the scheme. As for conspiracy, 18 U.S.C. section 286 reads: “Whoever enters into any agreement, combination, or conspiracy to defraud the United States, or any department or agency thereof, by obtaining or aiding to obtain the payment or allowance of any false, fictitious, or fraudulent claim, shall be fined under this title or imprisoned not more than ten years, or both.” ▪ The Medicare Anti-Kickback Act regulates self-referrals, referrals by a provider of patients to a clinic in which a physician has a financial interest, and payments for referrals of patients or medical business by one provider or another. Notice of a conviction is sent to licensing boards and professional societies. ▪ Theft of public money, property, or records covers a broad range of sins. If a doctor steals less than $100 or tongue blades from a government hospital, then the maximum sentence would be one year and a fine. Otherwise, misappropriation of funds or property carries a maximum imprisonment of ten years. ▪ False claims for payment fall under the False Claims Act. Services may not actually have been performed or there may have been false representations about the necessity for the medical procedures. These are the qui tam cases, which may get relators up to 30 percent of the settlement, if they prosecute the case themselves. ▪ The Racketeer Influenced and Corrupt Organizations Act (RICO) was a statute passed to penalize members of organized crime. It has been used to prosecute physicians who conspire with attorneys and patients to submit false claims to insurers for fictitious automobile accidents. United States v. Console was a case in which a New Jersey physician referred victims of automobile crashes to a specific law firm for legal services. In return, the legal firm referred their clients to this doctor for medical services. It was found that the law firm's clients' medical bills were inflated, patient bills and charges were falsified, fraudulent insurance claims were generated, and the law firm took a share of the recovery. Physicians and attorneys may be subject to charges of racketeering, even if this was not the main thrust of RICO legislation (especially in New Jersey). Table: Private Insurers' Health Care Fraud InvestigationsState laws vary about whether attorneys must make disclosures to prevent criminal fraud. Attorneys in Ohio must disclose client confidences to rectify a crime or a fraud. Witch Hunts There is an atmosphere in which many physicians must feel that all of their behavior is suspect. It is apparent that doctors may run afoul of the law without knowing it or without intending to do so. For example, regarding kickbacks, it is illegal to “solicit, pay, offer, or receive any remuneration, in cash or in kind, for the referral or to induce the referral of a patient, or for ordering, providing, recommending, or arranging for the provision of any service payable by federal health care programs.” Waiving deductibles and co-payments for Medicare payments are prohibited. Obtaining free or discounted office space in return for hospitalizing patients is proscribed as well. Penalties may be imposed if the doctor “should have known” he was committing fraud. Any variety of practices construed to induce patient referrals may run afoul of the law unless the patients are indigent. On the other hand, to be safe, transactions such as rental charges are consistent with fair market value, and should not consider the volume or value of any referrals or other Medicare business between the two parties. Examples cited include: ▪ A local hospital offers a physician discounted office space and free training for CPT coding and laboratory techniques. This is likely considered illegal remuneration to induce future referrals. ▪ A physician may invest in publicly held securities, even if the stocks include a hospital he refers patients to, as long as market price is paid and the entity has shareholder equity of at least $75 million over the past three years. It has been recommended that physicians develop a process for internal review to ensure compliance with the law and proper billing. Compliance programs may convince government prosecutors that the physicians committed simple errors rather than fraud. These programs obviously involve lawyers funded by the health care entity itself to ensure that the law is not broken. One must wonder how arcane laws must be for intelligent people to be forced to expend money on legal help to figure out whether they are running afoul of the law. As of 1997, the Office of the Inspector General was giving advisory opinions about whether certain activities were illegal — for a $250 processing fee and a charge of $100 per hour. Without consulting the OIG, elements of a compliance program include: ▪ Evidence that the organization is committed to standards of behavior. ▪ Effective training and education for everyone in the organization to ensure accurate billing. ▪ Regular monitoring of the organization's activities. ▪ A way for anyone in the organization to confidentially report practices deemed to be inappropriate. ▪ The ability to respond to such reports and take corrective action. A compliance program, headed by a compliance officer, therefore, is created to systematically assure the organization that it is in compliance with all of the rules and regulations. Joint ventures between hospitals and physicians may be legitimate and beneficial. The ones recognized by Health and Human Services as lawful commercial arrangements are accorded “safe harbor” status. Anti-Kickback Laws In general, emergency physicians are limited in ways to generate self-referrals. Waiving Medicare co-payments and deductibles falsely understates fees, and is considered fraudulent. It generally violates the terms of physician contracts with insurance companies as well as falsely represents the provider's actual charges. It is acceptable to waive deductibles only if the following apply: an agreement exists with the payer defining the conditions under which deductibles and co-payments can be waived, the cost of collecting is disproportionate to the amount potentially collected, or financial hardship to the patient. The best known qui tam action against an emergency physician is probably that of Emergency Physicians Billings Services, Inc., in Oklahoma in 1998. The case was a qui tam action brought by a former, presumably disgruntled, employee of the group. It involved the emergency department evaluation and management services, with charges of upcoding. Recall that these criteria, established in 1992, are based not only on what service was provided but also on what was documented. Worse, training tapes were produced demonstrating that the CEO of the billing services group instructed coders that documentation was unnecessary and a red tape issue, and that they should code charts without regard to the documentation in the medical record. Note that because the government requested damages in the EPBS case of at least $90 million, with civil penalties approaching $1 billion, the relator could reap tens of millions of dollars (15–25% of the recovery), although it is doubtful that the billing service had those kinds of assets. The False Claims Act was passed in 1863 to address dishonest defense contractors during the Civil War, and was known as Lincoln's Law. Take-Home Lessons As always, money rules. The government in 1992 gave five evaluation and management codes which held out the carrot that emergency physicians could maintain or even increase their income if they could jump through the hoops that level 4 or 5 visits entailed. After all, if doctors and billers couldn't stay one step ahead of government bureaucrats, emergency physicians were really pathetic creatures. Dictation systems proliferated, as did charting systems that could generate the required information for coders to interpret. Never mind that the record might be incomprehensible. Of course, emergency physicians have become less productive with increased administrative burdens and reduced reimbursement for clinical services. Regarding kickbacks, any discount given to a patient is suspect. Third-party payers and the government want their discounts as well. For all practical purposes, “professional courtesy” may become a thing of the past unless the total fee is discounted or reduced. Anyone can be a relator, including physicians who may be unhappy with services provided by a managed care plan for their patients. Private investigators, government auditors, competitors, and present and past employees may all be qui tam relators. For the chunk of settlement dangling in front of them and prohibition against retaliation against them by the Civil False Claim Act, it is clear that fraud is not something to be taken lightly. Next month I will discuss other ways in which EPs and teaching hospitals have been affected by fraud.