Largest Takedown in History for Medicare Fraud: HIPAA & HITECH Act Blog by Jonathan P. Tomes

JonTomesAt first blush, Medicare fraud may seem unrelated to HIPAA. Such, however, is not the case, although the HIPAA crimes discussed in this post are not the typical HIPAA crimes made punishable by 42 U.S.C. 1320d-6.

The Medicare fraud that is perhaps most closely related to HIPAA is upcoding. Upcoding is a fraudulent practice in which provider services are billed for higher Current Procedural Terminology (“CPT”) codes than those for the services that were actually performed, resulting in a higher payment by Medicare or a third-party payer, according to the 2002 edition of the McGraw-Hill Concise Dictionary of Modern Medicine.

This past week, the FBI arrested 243 people, including 46 doctors and nurses, in the largest Medicare fraud bust ever for allegedly billing Medicare for $712 million worth of patient care that was never given or that was unnecessary.

In one of the worst of these cases, owners of a mental health facility in Miami billed tens of millions of dollars for psychotherapy sessions based on treatment that was little more than moving patients to different locations. Four people were charged for mass-marketing a talking glucose monitor and sending the devices to Medicare patients who did not need the devices and/or had not requested the devices. They billed Medicare for the devices and received more than $22 million.

In some cases, health care providers paid kickbacks to identity thieves who could get their hands on Medicare patients’ personal information. They would then use that information to bill Medicare for bogus care. This practice would, of course, violate 1320d-6 directly by misusing individually identifiable health information for personal gain.

Seven people were charged in connection with home health care schemes. In one scheme, six owners and operators of a physician house call company submitted nearly $43 million in billings under the name of a single doctor, regardless of who actually provided the service. The company also significantly exaggerated the length of physician visits, often billing for 90 minutes or more for an appointment that had lasted only 15 or 20 minutes.

Sometimes, fraudsters, known to the feds as “patient recruiters,” went to places like homeless shelters and soup kitchens and offered money to those who would share their Medicare patient numbers, a Department of Justice spokesman said.

Another case involved a Michigan doctor who would unnecessarily prescribe narcotics to his patients in return for the patients’ identification information, which was then used for the fake billing. These patients then became addicted to the prescribed drugs and found themselves bound to the scheme by the sheer need of accessing these narcotics.

As noted above, upcoding is a fraudulent practice in which provider services are billed for higher Current Procedural Terminology (“CPT”) codes than using procedure codes for services that were actually performed, resulting in a higher payment by Medicare or third-party payers. This practice has criminal HIPAA implications because of the need to use the standard transactions and code sets and the new International Classification of Diseases, 10th ed. (“ICD-10”), for transmitting such data in electronic format. The ICD-10 will approximately quadruple the disease codes, greatly increasing the potential for upcoding.

In health care IT, meaningful use refers to meeting certain requirements regarding the electronic reporting of patient records in order to be fully reimbursed under the electronic health records (“EHR”) incentive program. Requirements include capturing essential patient information, reporting quality measures to the Centers for Medicare and Medicaid Services (“CMS”), electronically transmitting prescriptions to pharmacies and claims to insurance carriers, and sending patient reminders. See also, EHR Incentive Program and Healthcare IT, Computer Desktop Encyclopedia, copyright ©1981-2015 by The Computer Language Company Inc.

Note that inaccurate reports could themselves constitute Medicare fraud. Covered entities should seriously consider the need for a billing consultant and a meaningful use audit to achieve compliance and avoid penalties.

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