With the passing of the Affordable Care Act in 2010, provisions were made to add an additional $350 million to all federal fraud and abuse programs in an effort to increase scrutiny of claim payments. The federal government, along with the Department of Health and Human Services, created a detailed plan to decrease government spending mainly due to fraud and abuse within the Medicare program.
Multiple laws and regulations have been put in place to fight these abuses, and it’s important for physician practices to understand these regulations, which can be costly for noncompliance. Violations of any part of the healthcare law can result in criminal penalties, loss of medical license, stricter civil fines and exclusion from the federal healthcare programs, as well as new requirements for providers to return any overpayment within 60 days.
More than ever, it is vital that providers be knowledgeable about the regulatory programs that oversee and enforce these guidelines. Regardless of the practice size or the specialty, all providers must be aware of the guidelines that have increased auditing rules and guidelines.
Several government entities oversee audits, and monitor for fraud and abuse in physician practices. These entities have different processes, structures and goals to ensure compliance to standards within government and payer standards. Enforcement of these laws is carried out by various agencies, including the Department of Justice, the Department of Health and Human Services, the Office of Inspector General (OIG) and the Centers for Medicare and Medicaid Services.
The OIG, which is the enforcement agency of the HHS, lists the five most important fraud and abuse laws applicable to physicians as: the False Claims Act (FCA); Anti-Kickback Statute; Physician Self-Referral Law, also known as the Stark Law; Exclusion Statute; and the Civil Monetary Penalties Law. It’s vital for providers and their staff to understand what is included in these laws in order to avoid violations.
False Claims Act [31 U.S.C. §3729–3733]
The civil FCA generally protects the government from being overcharged or charged with procedures that are not medically necessary. This law works in conjunction with other fraud and abuse laws. If a claim results from a kickback or is made in violation of the Stark Law, it may be considered false or fraudulent, which would create liability under the civil FCA, as well as the Stark Law.
Fines for filing a false claim can add up to three times the programs’ loss, which is defined by the Agency, plus $11,000 per claim filed. Keep in mind, under the civil FCA, each item or service billed to Medicare counts as a claim so the fines can add up quickly. On the other hand, criminal penalties are applicable to the FCA which includes imprisonment and criminal fines.
Anti-Kickback Statute [42 U.S.C. §1320a-7b(b)]
The Anti-Kickback Statute is a criminal law that prohibits knowing and willful remuneration for patient referrals or generation of payable services by federal healthcare programs (e.g., drugs, supplies or healthcare services for Medicare or Medicaid patients). Remuneration or compensation includes anything of value, such as cash, free rent, expensive hotel accommodations, meals or excessive compensation for medical management, partnership or consultations.
Criminal penalties for violating the Anti-Kickback statute include fines, jail terms, and exclusion from participation in the federal healthcare programs.
Physician Self-Referral Law [42 U.S.C. §1395nn]
The Physician Self-Referral Law, commonly known as the Stark Law, prohibits physicians from referring patients to receive “designated health services” payable by Medicare or Medicaid from entities in which the physician or an immediate family member has a financial relationship—unless an exception applies.
The Stark Law is a strict liability statute, which means proof of specific intent to violate the law is not required. The Stark Law prohibits the submission, or causing the submission, of claims in violation of the law’s restrictions on referrals. Penalties for physicians who violate the Stark Law include fines, as well as exclusion from participation in the federal healthcare programs.
Exclusion Statute [42 U.S.C. §1320a-7]
The OIG is legally required to exclude individuals and entities from participating in any federal healthcare programs who have been convicted of criminal offenses, such as Medicare or Medicaid fraud; patient abuse or neglect; other healthcare-related fraud or theft; or the unlawful manufacture, distribution, prescription or dispensing of controlled substances.
Providers are responsible for appropriately reviewing providers and not employing or contracting with excluded individuals or entities. Excluded individuals are prohibited from furnishing any type of service, including administrative and/or management services. This responsibility requires screening all current and prospective employees and contractors against OIG’s List of Excluded Individuals and Entities. This online database can be accessed from OIG’s Exclusion website (http://exclusions.oig.hhs.gov). If you employ or contract with an excluded individual or entity, at minimum, you may be subject to a civil monetary payment of $10,000 for each item or service furnished during the period that the person or entity was excluded from the federal program.
Civil Monetary Penalties Law
There are a wide variety of provider conducts in which the OIG can apply civil monetary penalties. These penalties range from $10,000–50,000 per violation, and the OIG has the authority to seek penalties in amounts based on their assessment of the type of violation.
The OIG may seek civil monetary payments from any person who:
- Presents claims to a federal healthcare program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent;
- Violates the Anti-Kickback Statute by knowingly and willfully offering or paying compensation to persuade the referral of business in federal programs or soliciting/receiving payment in return for the referral of any federal healthcare program business; and
- Presents a claim that he/she knows or should know is for a service for which payment may not be made under the physician self-referral or Stark Law.
Physicians are responsible for ensuring that each claim submitted accurately reflects the services provided in the practice. Each time a claim is submitted on the CMS 1500 form, it certifies that the provider knows and understands the requirements for billing the services to a payer. Each year, the OIG Work Plan is released and lists the priorities for that year, giving providers insight into areas that are being in jeopardy. It is imperative to know and understand the work of the OIG and what areas they are targeting, which will allow you to set priorities in your practice.
In its 2014 Work Plan, the OIG is targeting improper payments in key areas:
- Evaluation and management services, this is mainly due to Medicare contractors who have noted an increased frequency of medical records with identical documentation across services;
- Imaging services in regard to billing and payments directly related to practice expense. The OIG will focus on the practice expense components, including the equipment utilization rate;
- Payments for outpatient drugs and administration of drugs that received Medicare payments for certain medications (e.g., chemotherapy drugs) that have been identified and determined as vulnerable to incorrect coding. The OIG will be reviewing claims with the administration of these drugs to determine whether Medicare overpaid providers because of incorrect coding or overbilling of units.
The government is continuously making changes to the federal fraud and abuse laws in compliance with the healthcare reform law. It is imperative providers understand these laws and the potential financial ramifications on the practice. To ensure your practice is complying with the regulations and guidelines, it is recommended you evaluate the practice’s compliance level and identify any risk areas for noncompliance.
Recommendations for practice compliance review include:
- Audit and monitor identified risk areas
- Develop processes and procedures for dealing with risk areas
- Document practice policies and procedures
- Designate a compliance officer
- Provide compliance education for staff members
- Develop a corrective action plan to respond to any offenses
The ACR is committed to helping rheumatology practice with coding and billing compliance. The certified coding and healthcare auditors on staff are available to assist with conducting sample audits of charts to monitor coding compliance and education. For questions or additional information, contact Melesia Tillman, CPC, CPC-I, CHA, CRHC, at [email protected] or Antanya Chung, CPC, CPC-I, CRHC, CCP, at [email protected].
