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Dynamic Chiropractic – February 22, 1999, Vol. 17, Issue 05

Protecting Yourself against Health Care Fraud

By Michael Stoller
Editor's Note: Michael Stoller has worked with chiropractors and health care providers for the last 13 years in civil, criminal and licensing matters. He has developed a team of health care consultants, investigators and experts.

As an honest and responsible chiropractic practitioner, what worse nightmare could there be than being notified of being indicted and prosecuted for health-care insurance fraud? A notice of indictment would only be the beginning of the horror. You could expect to spend large amounts of time and money to defend your innocence, to say nothing of the emotional toll. Your hard-earned reputation could be irreparably damaged even if you were exonerated of the charges levied against you. This is obviously a scenario to be avoided, if at all possible.

Some of you think that it can't happen to me because we maintain records or we've trained our staff and have safeguards to ensure we are doing things properly. However, don't be lulled into a false sense of security, because even a simple innocent administrative mistake may lead to indictment and even prosecution.

I have been representing chiropractic and other health care providers in civil and criminal cases for over 13 years. Our office is in California, but I have represented doctors in various states throughout the country, including matters before various state licensing boards. During the past three years, I have observed the government's interest in health care change dramatically.

The Heat Is on from the Government

Health care fraud is one of the top political issues. In this country, there are a number of organizations with varying roles and degrees of responsibility in the investigation and prosecution of health care insurance fraud. First, there are the insurance companies themselves, and the U.S. legal system in general, which have obvious roles in the pursuit and prosecution of health care insurance fraud. Beyond these, there are also governmental agencies and private organizations which concern themselves specifically with these issues. So that you realize who is looking over you shoulder, here is a quick list:

  • Health Fraud Task Force
  • National Health Care Anti-Fraud Association (NHCAA)
  • Department of Health and Human Services (HHS)
  • Food and Drug Administration (FDA)
  • National Council Against Health Fraud (HCAHF)
  • American Medical Association (AMA)

President Clinton also created a special Department of Justice task force ("Operation Restore Trust") which is comprised of approximately 800 agents from the criminal investigation division of the Internal Revenue Service and Department of Justice to investigate all areas of health care fraud. One must wonder why so much of the government's resources and taxpayer monies are required for such a mobilization when there already exists plenty of investigative agencies. Clearly, health care reform is a top political priority for this president. You may recall, during the last election, Senator Dole accused President Clinton of being soft on drug enforcement. The reason for this statement was President Clinton changing the traditional priorities of the Justice Department's enforcement role, dropping drug enforcement from #2 to #4, and bringing health care fraud up to #2. This task force has recovered $42 million in its first year and grown to $1.2 billion in its second year.

Now you know why the heat is on. You need to protect yourself because even a simple, innocent mistake can lead to indictment and prosecution. These 800 agents may have quotas to meet.

According to Ronald Schwartz, former deputy inspector general of the DHHS, the workers in the MFCU (Medicare and Medicaid fraud control units) have traditionally worked on a merit pay/bounty system. The workers are on a quota system. A "numerical goal is set for each of the offices. The auditors were told that they needed to produce x millions of dollars in findings; investigators were told that they had to get x number of providers thrown out of Medicare or Medicaid, x dollars of civil money penalties, and x number of convictions." These agents know their promotions are dependent on how many convictions they get.

According to Donald Zerendow, JD, former director of the Massachusetts MFCU, the MFCU's "ability to flourish is based on a simple equation: to the extent that Congress and state legislators can be convinced that fraud is rampant, funding for the investigative staffs is assured; to the extent that good 'statistics' (i.e., convictions, exclusion and monetary recoveries) are produced, program funding will increase." He continues: "From this perspective, every misplaced file or poorly documented record represents a service that was not delivered; all recurrent treatment is overutilization; any procedure that cannot be easily pigeon-holed into an arbitrarily defined code is a source of overpayment; fraudulent billing; and exceeding computer parameters is a flag of guilt."

These statements tell us that the investigators in the MFCU are highly driven to find fraud, perhaps where it doesn't even exist, and are willing to examine every detail to accomplish these goals. They have quotas to meet. Indeed, based on the government's success, it has expanded federal funding and resources as it moves to its next phase.

Based on my experience in successfully litigating such matters, here are some observations and insights which may be helpful. Here is an example of a case presently pending: The RVS and CPT codes are largely incomprehensible, and often do not readily apply to given services. A client contacted us regarding billing in a field in which the codes were not directly applicable, but in which they were used simply out of custom and shorthand. The doctor submitted bills for medical and chiropractic services which included an RVS code that was commonly used in the industry for certain services. The bill contained a description of the service, which removed any ambiguity about was actually done. Finally, a report was submitted contemporaneous with the bill which provided details about the nature of the service rendered.

While the code chosen was used throughout the industry and appears to even have been used by defense doctors, and that there were descriptions on both the bill and in the accompanying report, this doctor is being prosecuted, in part, on the use of the RVS code.

Most physicians are geared to provide treatment and care and are not focused on billing and accounting practices. Decisions of how and what to bill are often left to a staff with a smattering of experience who often pick up bad habits from other offices and use them in their new employment. A provider who acts in complete good faith with regard to the provision of treatment or care, and who in good faith relies on a person with some background or experience in the area of billing, may be open to a criminal prosecution because a prosecuting agency determines that there was a misuse of an appropriate coding system. These kinds of mistakes cannot only be costly to defend, but can have disastrous consequences on the provider's license.

How to Avoid the Simple Innocent Mistakes That May Lead to Indictment and Prosecution

Since there are quotas in place, practitioners with larger client bases (and therefore larger total dollars of insurance claims) are probably more at risk. To make their quotas, investigators may well start with a list of which practitioners have the highest number of dollars in insurance claims each year. That way, if they "catch a fish," it's likely to be a big fish bringing them more quickly towards their quota requirements. Larger recoveries lead to more funding and faster promotion. Why waste your time on the small stuff when you can get all you need with one large score? So larger, more successful and visible (i.e., marketing and advertising) practices may need to be that much more careful in their billing, record keeping, protocol and so forth. In the event you are reading this too late and are in the midst of one of these nightmares, there are steps you can still implement that may mitigate or even resolve your problems while still maintaining your license and livelihood.

All businesses, regardless of their size, should have a quality control division which is geared to inspect, detect and correct the operation of the office and its personnel. Doctors are sensitive to malpractice issues, but they are not as sensitive and aware of the changing laws and regulations which affect the operation and administration of their office such as billing, reports and personnel issues. Having a lawyer inspect, detect and correct your office is the only safe way to know if you have any hidden liabilities. Once a chronic problem has been detected and corrected, you still need to have a maintenance program to keep the practice in optimum legal shape. This can be quarterly or yearly depending on the size of the practice.

Second, those who collect from Medicaid, in addition to or instead of Medicare, may have to be more careful than those who deal with Medicare alone. Medicare has only one reimbursable chiropractic service: spinal manipulation. There is therefore no danger of confusion or codes in the Medicare system. There is only one service to be reimbursed for and therefore one corresponding code. Red flags go up when bills are received with more codes than are customary.

Medicaid, however, offers reimbursement for more than one service, depending upon which state you practice in. Therefore, if you perform one reimbursable service and enter the wrong code accidentally, this can lead to claims of fraud. Likewise, if you perform a service that doesn't fit into a precise category or coding and then attempt to claim under another coded service because it is the closest monetary fit, you could also be opening yourself up to claims of fraud. Knowing the biases of the system, certainly the best idea is to be very careful not to leave any openings for questioning. Make sure you use the correct code for the service provided and document whenever the code fails to cover the treatment provided.

Watch for offering the free initial consultations, exams, x-rays, etc. If you advertise that a service is free and then attempt to obtain reimbursement for it from insurance, you could be liable for fraud. Some state associations, despite the legality of such marketing campaigns, feel that the services provided have value and that the "free offers" violate this concept. An appropriate way to circumvent both the legal issue and the potential policy violation issue would be to offer services with no out-of-pocket expense to the patient, or at no cost to the patient. But watch out! Illinois, for example, has outlawed even this type of offer.

Another possible way to make introductory offers successful and legal is to have the prospective patient sign an informed consent form. If you are careful, you can usually find an appropriate method to make introductory offers and not open yourself to insurance fraud prosecution or ill will from your state chiropractic association.

One of the newest bright ideas to the age old problem of discrimination against chiropractors is the MD/DC practice model. There are several programs for chiropractors to choose from that use a chiropractor providing care in conjunction with a medical doctor. Not all programs are alike, therefore you should proceed with caution and do a thorough legal quality assurance check with an independent counsel before proceeding. The government is looking at this model as a potential source for their quotas.

A fifth issue and area of concern occurs when a "patient" comes in and attempts to involve you in some sort of illegal activity. They may have a sympathetic story which plays on your good nature and perhaps gets you into the "I can help them out" mindset. It may even seem like a too-good-to-be-true situation. Don't do it! A situation where someone presents you with an illegal scheme should immediately raise a red flag for you, no matter what the reason. You should practice defensive chiropractic in this situation since there's always the possibility that the "patient" is an undercover investigator trying to see what you are willing to do. Don't fall for it! An ethical practitioner would throw them out the door.

Also, if you as a practitioner have more than one company name and/or more than one insurance account with the same provider, a special issue can be raised. If your claims are split for any particular patient such that some billing is paid to you under one company name and other billing is paid to you under another company name, you may be prosecuted for fraudulent multiple claims. This could be so even if the insurance company themselves issued you the different claim numbers under their own impetus. Where possible, it is best for you to avoid any appearance of impropriety by making sure that you don't have claims for the same patient on multiple accounts. If you do, proper documentation and cross-referencing is vital.

Given this environment and having the knowledge that some of those with influence consider chiropractic to be their enemy, it is best to be careful and protected. To be sure that the nightmare doesn't show up in your dreams, it's best to be aware of the potential problem spots and take steps to avoid any trouble beforehand as opposed to having to deal with an unwanted situation once it has arisen. The legal quality assurance checkup is one that will allow you focus on providing the best health care to your patients.

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