For example, last Wednesday I posted on how health care reform legislation should focus on combating fraud as a way to reduce the rapidly escalating costs of care. On Thursday, during the National Summit on Health Care Fraud held in Bethesda, Maryland, Attorney General Eric Holder disclosed that Justice Department records show that efforts to combat health care fraud have stalled in the past two years.
Holder stated that two years after the federal government ramped up its efforts to combat Medicare fraud, the number of people charged with such fraud has barely changed. Specifically, federal prosecutors have charged 803 people with defrauding medical insurers in FY 2009. (Nearly all of the charges involved Medicare fraud.) This number represents a mere 2 percent increase since the government began deploying “strike forces” to target fraud in 2007.
The 2007 strike force targeted fraud in Miami, and following the inception of the Miami program the number of people charged with health care fraud leaped nearly 35 percent. The strike force program, also known as the Health Care Fraud Prevention & Enforcement Action Team or HEAT, has since been expanded to six other cities (Detroit, Houston, Los Angeles, Baton Rouge, New York, and Tampa). Strike force efforts in the latter three cities began in December of 2009.
Notably, according to Louis Saccoccio, head of the National Health Care Anti-Fraud Association, many of the charges constitute “low hanging fruit” and while the government has generally done a good job targeting fraud, there are many undiscovered cases.
During the Summit, Attorney General Holder noted that fraud costs Medicare an estimated $60 billion a year. This is number is significantly higher than reports from the FBI, which estimates that combined fraud in all health care programs eats up 3-10 percent of total health care spending. Since the operating costs for the Medicare program in FY 2008 ran around $460.9 billion, $60 billion in losses would mean that fraud accounts for 13 percent of the Medicare budget.
After the jump - where anti-fraud efforts will be directed
]]> Such numbers affirm the need to take additional steps to ensure that not just the most blatant fraudsters are discovered, but that unscrupulous providers who normally fly under the radar are apprehended as well. During the Summit, officials from the Departments of Justice and Health and Human Services met in “workgroups” to focus on:- Use of technology to prevent and detect health care fraud and improper payments
- Role of states in preventing health care fraud
- Development of effective prevention policies and methods for insurers, providers and beneficiaries
- Effective law enforcement strategies
- Measuring health care fraud, assessing recoveries and determining resource needs
Summaries of the workgroup discussions will be compiled in a publicly available report, to be released at a later date. The Health Care Lawyer Blog will continue to follow such developments.
What’s devastating and frustrating is that while everyone agrees the current health care system doesn’t work, apparently no one will agree or take action on how to fix it. Even the anti-health care fraud legislation introduced last year by Senators Ted Kaufman (D-Del.) and Charles Grassely (R-Iowa) hasn’t advanced since October 28 and November 16, respectively, when the bills were referred to Senate committees. Is America so far politically divided that we can’t even agree that unscrupulous practitioners stealing health care funds is wrong and needs to be stopped?
After the jump - why health care fraud affects everyone
]]> Ramping up anti-fraud efforts hurts no one (except, of course, the wrongdoers) and helps everyone. Importantly, the health care providers who routinely bilk Medicare, Medicaid and private insurers are not only stealing money – they are draining patients’ time, health, and general well-being. Immoral physicians lie to their patients and tell them they need invasive and dangerous medical procedures when they are in fact unnecessary, such as Dr. Mark Midei, a Maryland physician who is accused of implanting medically unnecessary coronary stents in dozens of patients. Drug companies push drugs with dangerous (and undisclosed) side effects onto vulnerable elderly patients. And last week, a nationwide dental management company paid $24 million to resolve allegations that it caused bills to be submitted to state Medicaid programs for medically unnecessary procedures performed on children.With the current political climate, Congress may not be able to pass a massive, expansive piece of legislation overhauling every aspect of the health care system. However, in the interim, we can focus on reducing the costs of health care by stopping monies from being squandered and stolen by wrongdoers. Congress should take immediate action on Senate Bills 1959 and 2774 and help protect our country’s financial resources, as well as its citizens.
The proposed 2010 cuts apply to all practice areas, although those expected to be the most affected include reumathologists, surgeons, pain management specialists, radiologists, and non-invasive cardiologists. For example, payments for echocardiography procedures are expected to plummet 35.5 percent, and payments for MRI spine lumbars will drop around 20.93 percent.
Groups such as the AMA and AARP claim (not surprisingly) that linking physician reimbursement to the country’s gross domestic product growth is a mistake – specifically, such groups argue that the cost of running a medical practice typically grows at a higher rate than the GDP.
The versions of the House and Senate health care reform bills both replace versions of the MPFS with raises – 1.2 percent and .5 percent, respectively. The Senate bill is a one-year “patch” which only defers the program cuts to 2011. The House bill essentially erases accumulated SGR debt and gives physician a 1.2 percent raise based on the Medicare Economic Index, which measures inflation in physician-practice costs. This solution would add more than $200 billion to the federal deficit by wiping out the accumulated SGR debt.
With fate of both the House and Senate health care reform bills unclear after last week’s Massachusetts election, a separate vote may be needed to delay or cancel the 21.2 percent cut. The Senate is expected to vote on a debt-ceiling bill that would contain a permanent fix to the SGR and repeal the physician payment formula.
]]>One notable cut took place Saturday, when Nebraska Democratic Senator Ben Nelson agreed to drop the federal subsidy for Nebraska’s Medicaid program. Dubbed the “Cornhusker Kickback”, the subsidy gave special treatment to Nebraska’s Medicaid program in order to induce Nelson to cast the all-important 60th vote needed to defeat a Republic filibuster and pass the Senate health care bill. Given that the CBO estimated that the “Kickback” would cost taxpayers an additional $100 million over ten years, the compromise was not a popular one. Nelson agreed to drop the subsidy, reasoning that it had become a “sticking point” in the negotiations.
Despite winning Nelson’s vote, the Senate may have more problems ahead. Polls show that Massachusetts Attorney General Martha Coakley, the Democratic candidate running for the late Ten Kennedy’s (D-Mass) Senate seat, is slightly behind her Republican opponent, Republican State Senator Scott Brown. If Brown wins and Kennedy’s seat goes to a GOP member, the Senate may again lack the 60 votes needed to pass the health reform bill when it comes out of committee.
After the jump - House/Senate compromises continue
]]> In the interim, House Speaker Nancy Pelosi has told her House colleagues that they will have something they can “sink their teeth into” this week. One contested issue has been how to structure the “insurance exchange”, where private health plans would compete for customers.House lawmakers have called for a national exchange (i.e., where private health plans would have a network of providers with doctors/hospitals in every state and compete with a nation-wide, government-run public insurance plan), while the Senate has called for state-based exchanges (where plans would be restricted to individual states and regions, allowing individual states to opt-out of a nationwide plan). Plans offered on the exchange would be issued by private insurers who must meet government requirements such as offering minimum benefits packages, levels of allowed cost-sharing through co-payments and deductibles, etc.
Other hot button issues include abortion coverage, the availability of health care to immigrants, and whether health insurance companies should be stripped of their anti-trust exemption. Currently, health insurance and medical malpractice insurance companies are excluded from the scope of federal laws prohibiting price fixing, bid rigging, and market allocation. Instead, regulation of insurance companies has been left to the individual states.
The Health Care Lawyer Blog will continue to keep readers updated as developments unfold.
The crime groups then use patients' medical insurance data and social security numbers to bill Medicare (and private insurers too) for drugs, equipment and treatment which was never actually prescribed. To collect the money, the fraudsters set up "shell" companies which can dissapear easily at the hint of a government investigation. Some criminals even sell patient insurance information to uninsured individuals who are desperate for medical care.
If there are no unscrupulous providers around to sell the information, many crime groups hack into digital medical records in order to siphon patient information. Unfortunately, such crime trends may be on the rise as the use of electronic health records increases.
Bottom line - we not only have to worry health care fraud, but identity theft too. Here's hoping that the increased HIPAA penalties will encourage health care providers to keep patient information safe.
]]>The Centers for Medicare and Medicare Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC) issued two proposed regulations December 30, 2009 outlining the terms of the EHR incentive programs, and identifying how providers can make “meaningful use” of EHR and the standards and specifications that will be used to develop “certified” EHR technology.
Both regulations are open to public comment until on or about March 2, 2010 and will take effect sometime in early 2010.
Here are some highlights from the regulations:
Definition of Meaningful User
CMS’s proposed rule defines the term “meaningful user” as an eligible professional or eligible hospital that, during the specified reporting period, meets the following three requirements:
(1) Demonstrates use of certified EHR technology in a meaningful manner;
(2) Demonstrates to the satisfaction of the Secretary that certified EHR technology is connected in a manner that provides for the electronic exchange of health information to improve the quality of health care such a promoting care coordination, in accordance with all laws and standards applicable to the exchange of information; and
(3) Using its certified EHR technology, submits to the Secretary, in a form and manner specified by the Secretary, information on clinical quality measures and other measures specified by the Secretary.
Both the CMS and ONC guidelines make clear that a major consideration of whether “meaningful use” is achieved will be a provider’s ability to securely exchange information among providers, and between providers and patients, using standardized data elements and technologies. The interim final rule issued by ONC set forth these standards and specifications on how to achieve meaningful use; for example, one recognized problem is how providers using EHR actually report patient data. For instance, one provider’s EHR program may list patient demographic information as (PatientAge, Patient Sex, Patient Address), while another provider’s may list similar information in a different way (Date of Birth, Gender, City/State). In order to achieve maximum interoperability, these information models must be reconciled.
After the jump - a phased approach to implementation
]]> Moving Ahead With the Incentive ProgramCMS’s proposed rule creates three “phases” for eligible professionals, eligible hospitals, and critical access hospitals to demonstrate meaningful use. Under this phased approach, CMS will update the criteria of meaningful use through future rulemaking (the initial CMS/ONC meaningful use criteria – i.e. the proposed rule and interim final regulation released on Dec. 3 – is referred to as “Phase One”). Stage 2 criteria is currently slated to be released by the end of 2011 and Stage 3 by 2013.
The current State 1 criteria focuses on electronically capturing health information in a coded format; using that information to track key clinical conditions and communicating that information for care coordination purposes; implementing clinical decision support tools to facilitate disease and medication management; and reporting clinical quality measures and public health information.
The Stage 2 criteria is expected to expand upon the Stage 1 criteria to encourage the use of health IT for continuous quality improvement at the point of care and the exchange of information in the most structured format possible, such as the electronic transmission of orders entered using computerized provider order entry (CPOE) and the electronic transmission of diagnostic test results (such as blood tests, microbiology, urinalysis, pathology tests, radiology, cardiac imaging, nuclear medicine tests, pulmonary function tests and other such data needed to diagnose and treat disease).
Finally, the Stage 3 criteria will focus on promoting improvements in quality, safety and efficiency, focusing on decision support for national high priority conditions, patient access to self management tools, access to comprehensive patient data and improving population health.
Alright, Already – How EXACTLY Do I Become “Meaningful” EHR User?
The CMS Proposed Rule contains a proposed Federal Regulation, §495.6, which lists the Meaningful Use Objectives and Measures for eligible professionals, eligible hospitals, and critical access hospitals. These include implementing drug-drug, drug-allergy, and drug formulary checks; maintain active medication lists; recording and charting changes for certain vital signs; etc.
The complete Meaningful Use and Objectives list can be found on pages 467-476 of CMS’s proposed rule, which is available online at: http://www.federalregister.gov/OFRUpload/OFRData/2009-31217_PI.pdf
ONC’s Interim Final Regulation is also available online at: http://www.federalregister.gov/OFRUpload/OFRData/2009-31216_PI.pdf
Given that a medical records security breach is enough to send even the most seasoned health care provider into a panic, practitioners should familiarize themselves with the HIPAA breach notification requirements and establish written policies and operating procedures before a breach occurs. Importantly, providers who fail to adhere to the HIPAA breach notification requirements may face penalties of anywhere from $100 to $1.5 million, depending on the nature of the breach and the mental state of the provider.
After the jump - a crucial checklist for providers
]]> The following is an outline of steps health care providers should take to determine if a breach has occurred, and what needs to be done in that event. (Providers should take note that this is only a general outline, and that such analysis may vary depending on the unique characteristics of each practice.)Step #1 – Did a Breach Occur?
First, providers need to remember that not every improper disclosure of patient information is a reportable breach. A true “breach” is defined as “the acquisition, access, use or disclosure of unsecured protected health information (not otherwise permitted under the HIPAA rule) which compromises the security or privacy of the protected health information.” Additionally, the phrase “compromises the security or privacy” means that the breach poses a significant risk of financial, reputational, or other harm. Therefore, the mere fact that protected health information (PHI) has been disclosed does not automatically trigger the breach notification requirements.
Whether or not a breach has occurred can be analyzed using the following questions:
Question 1 – Was the disclosure authorized by the patient, and/or is it for treatment, payment or health care operations? The full list of permitted uses and disclosures are found in the HIPAA statute. If the disclosure is authorized or permitted, no breach has occurred.
Question 2 - Is the PHI “unsecured”? “Unsecured” essentially means that the PHI has not been rendered unusable, unreadable or indecipherable to unauthorized individuals. Although Health and Human Services has issued specific guidance, in a nutshell, this means that electronic PHI must be encrypted or encoded, and that non-electronic PHI (i.e. paper charts and files) are shredded or otherwise destroyed.
Questions #3 – Does a HIPAA exception apply? In addition to the permitted uses and disclosures described above, there are three main circumstances where an unauthorized disclosure will not count as a breach. The first is an unintentional acquisition by an otherwise authorized person, where the PHI is not further disseminated. An example of this would be a biller typing in a social security number incorrectly and accessing the record for Patient X instead of Patient Y. (Note that this “mistake” must be unintentional – covered entities and their employees do not have unfettered access to peruse patient records out of boredom or curiosity.)
The second exception is an inadvertent disclosure to a person otherwise authorized to access the information (i.e., a nurse handing the wrong chart to a doctor.)
The third exception is a disclosure made to someone “not reasonably able to obtain such information.” An example of this may be an accidental disclosure to a small child or developmentally disabled person who is incapable of further disseminating the information.
Question 4 – Does “breach” compromise security or privacy? Specifically, does the breach pose a significant risk of financial, reputational, or other harm? The Department of Health and Human Services has said that providers must carefully analyze each potential breach situation to determine whether or not a reportable breach has occurred. For example, the disclosure of a patient name and the fact that he/she has received services from a certain facility may (taken by itself) not be a breach. However, if the disclosure reveals that a patient received a specialized kind of care (for example, from an oncology clinic or HIV clinic) or discloses information that is potentially financially threatening such as social security numbers, credit card numbers, etc., then this is likely to be a breach.
Step #2 – Who Should Be Notified?
Once a provider has determined that a breach has occurred, certain steps must be taken in order to comply with HIPAA guidelines. Specifically, providers are required to issue notification of the breach to the individuals affected, the Department of Health and Human Services, and possibly the media, depending on the number of individuals impacted. Notification must be issued “without unreasonable delay” but no later than 60 calendar days after the breach is discovered.
First, providers must notify all affected patients of the breach. The notification should be sent by first class mail (the HIPAA rule provides for alternative methods of notification if agreed to in advance or if certain conditions are met) and include information on the nature of the breach, the information disclosed, the steps being taken to correct the breach, how individuals can protect themselves, and list either a phone number, website, or email address where the patient can receive additional information.
If breach involves more than 500 residents of a state or jurisdiction, notice must be given to “prominent media outlets” serving the state or jurisdiction. A breach of this scale also involves immediate notice to the Secretary of Health and Human Services. (Note that if the breach involves less than 500 individuals, then providers are only required to submit a log of all breaches to Health and Human Services by March 1 for the previous calendar year.)
As a general precaution, providers should establish written emergency procedures to be followed in the event of a breach, ideally created with the assistance of legal counsel, information technology consultants, or both. These guidelines should be disseminated to all employees and posted in a conspicuous area, and include, at a minimum:
o Phone numbers to local police departments to report thefts or break-ins;
o Phone numbers to information technology consultant who can take proactive steps to halt PHI from being further disseminated if a computer server is “hacked” or otherwise breached;
o Names of designed individuals responsible for contacting patients and issuing other notifications, if needed, and;
o Contact information for other individuals who can assist in the event of a breach, such as a post-breach services provider or cyber-liability insurance carrier.
While crimes and mistakes do happen, it is important for providers to take the necessary precautions to protect both their patients and businesses.
In the hours after the vote, defeated GOP Senators such as Minority Leader Mitch McConnell (R-Kentucky) lambasted the legislation, citing poll figures which show a slight majority of the public is opposed to the Senate Bill.
“There is widespread opposition to this monstrosity,” McConnell said after this morning’s vote. “The fight isn’t over.”
Legislation which appeases everyone is, in most cases, impossible and there are bound to be dissenters in any Congressional action. However, given the unusual levels of misunderstandings, rumors and public outcry which has surrounded the health care reform debate, one can’t help but wonder – is the American public really opposed to the actual content of the health care reform legislation as it stands, or are they just opposed, period?
After the jump - reflections on the health care reform debate
]]> I bring this up only because the news events of the past year have shown that a sizable portion of the American populace appears to be woefully misinformed about health care reform and what it actually means. Incidents such as the “Keep your government hands off my Medicare” town hall meeting, Sarah Palin’s tirade about death panels, and the "_blank">Massachusetts woman’s comments to Representative Barney Frank about why he supports Obama’s “Nazi policies” (to which he mockingly responded “Let me ask you – on what planet do you spend most of your time?”) indicate that although health care is an issue that impacts every person in this county, many are waging a war against an enemy they can’t visualize and don’t understand. However, because health care is something that impacts everyone, everyone has formed an opinion but few have taken the time to consider what it actually means.President Obama made an interesting statement during an NPR interview broadcast yesterday . In response to a reporter’s inquiry on why so many agree the health care system is broken but so few agree on ways to fix it, Obama observed that many have the mentality that “the devil I know is better than the devil I don’t.” In other words, a bad situation which is familiar is still better to many than taking a risk.
I understand there are those who have legitimate oppositions to some legislative provisions such as how to pay for reform, whether a public option will work or not, etc. However, for the most part I am concerned that too few people have taken the time to really educate themselves on the problems in the health care system, listen to proposed resolutions, and form well-reasoned opinions about what needs to be done. Instead, I fear that many are content to parrot sound bites on the news about “socialized medicine” and “pulling the plug on grandma.”
Case in point – Monday morning’s cloture vote was a historic event acting as a gateway to one of the most significant policy changes in our county’s history. Certainly, the populace would be interested in learning about the next step and what health reform will mean for them and their families, correct?
Instead, the tickers on CNN.com and several other news sites showed that the Congressional vote was not the hot topic of the day – in fact, it was not even close. The day’s top story? The death of actress Brittany Murphy.
*The opinions expressed in this post are solely those of the author, and do not necessarily reflect the opinions of other attorneys at Frank, Haron, Weiner and Navarro.
]]>The hotly-contested Senate bill, which does not contain the “public option” insurance coverage provision in its House counterpart, was heralded by President Obama this morning as “a big victory for the American people.” However, given the call for bi-partisanship that emanated from last year’s presidential election, the vote was not a political victory. The vote was so evenly divided down party lines, with every single Republican Senate member opposing the bill, that Democrats were forced to coax votes from waffling Senators such as Joe Lieberman (I-Conn.) and Ben Nelson (D-Neb.) by slicing provisions from the legislation. Specifically, in order to garner Nelson’s vote, amendments were made to the bill’s abortion provisions and a provision was added requiring the federal government to cover Nebraska’s costs for expanded Medicaid coverage after 2016. (No other state is currently slated to receive this benefit.) Additionally, the public option and Medicare expansion program was jettisoned to appease Lieberman and middle-of-the-road Democrats.
The Senate will hold additional procedural votes on the health care bill this week, and a final vote is scheduled for Christmas Eve. If the bill passes (as expected), the Senate version will then head to a conference committee, where it will be merged with a House health care bill passed last month. Both the House and Senate will then have to approve the final version before it goes to President Obama to be signed into law.
Comparing the House and Senate Versions
Both the House and Senate versions require nearly all individuals to maintain a minimum level of health insurance or pay a penalty, with the House version calling for a penalty of 2.5 percent of adjusted gross income over a certain level ($9,350 for singles and $18,700 for couples). Individuals who cannot afford health insurance will receive subsidies to do so. The House bill provides for the creation of a single-payor, government run insurance plan where individuals can obtain coverage; the Senate bill would instead create new nonprofit private plans overseen by the federal government.
After the jump - comparing the House and Senate bills (continued)
]]> Employers also face a much stricter penalty in the House version for not providing insurance coverage to employees. The House bill requires companies with a payroll of more than $500,000 to provide insurance, or face a penalty of up to 8 percent of their payroll. The Senate bill requires companies with more than 50 employees to pay a fee of up to $750 per worker if any of its employees rely on government subsidies to purchase coverage.Under both versions, insurers would be barred from charging higher premiums based on a person’s gender or medical history (i.e., pre-existing conditions). The Medicaid program would also be significantly expanded under both versions.
The House bill is, overall, the more expensive piece of legislation. The House package finances subsidies by a combination of tax surcharges on wealthy Americans (individuals with annual incomes over $500,000 and families earning more than $1 million would face a 5.4 percent income tax surcharge) and new Medicare spending reductions. The Senate bill also cuts Medicare by approximately $500 billion, and instead of a tax increase for the wealthy imposes a 40 percent tax on insurance companies that offer “Cadillac” (i.e. high end health plans). The Senate bill additionally increases the Medicare payroll tax for those earning more than $200,000.
The “Tab” for the Bills
The non-partisan Congressional Budget Office has said that the Senate bill will reduce the deficit by $132 billion in the first ten years, and another $1.3 trillion between 2019 and 2029. The initial price tag for the Senate bill has been estimated at $849 billion over the next decade. CBO estimates for the House bill have hovered around $1 trillion over the next ten years.
In an interview Sunday with “Face the Nation,” Lieberman claims that provisions in the bill which expand the Medicare program, create a national public option, and begin a new publicly administered long-term care insurance program are thwarting the legislation. If left out, however, Lieberman said the bill could gain votes. He added that even if the provisions were dropped, the remaining legislation is solid enough to improve the health care infrastructure and make significant changes.
Sen. Ben Nelson (D-Neb.) also appeared with Lieberman on “Face the Nation” and echoed the independent senator’s sentiments. Nelson added that he is concerned that a Medicare buy-in provision (i.e., allowing adults in their 50s and early 60s to buy into Medicare as a way to expand their coverage options) would be a “forerunner of [a single-payor program]” and that stronger anti-abortion language is needed in order to gain his vote.
Effective May 1, 2010, all restaurants and bars in the state will be required to be smoke-free following legislation that was passed by the Michigan House and Senate Thursday. The bill (H.B. 4377) is headed to the desk of Governor Jennifer Granholm, who has stated that she intends to sign it.
Efforts to pass the non-smoking legislation were log-jammed for years by groups who claimed such laws would affect business owners’ autonomy, or have an adverse impact on casino business. The approved bill does not apply to Indian gaming casinos, and allows smoking on the gaming floors of other casinos, but not in casino bars, restaurants or hotels. Also exempt are tobacco specialty shops and existing cigar bars that have humidors and derive at least 10 percent of their revenue from the sale of cigars. The legislation does not permit new cigar bars to open.
Affected establishments are required under the legislation to remove all ashtrays from the business premises by May 1, and post signs that smoking is not allowed. In the event a patron does choose to light up, the penalties will be assessed against the smoker, and not the establishment. Violating the smoking ban counts as a civil infraction, with the first violation resulting in a $100 fine and subsequent violations in a fine of up to $500.
After the jump - author's comments on the legislation.
]]> As someone who has been following this legislation closely for about two years now, what has intrigued me about the debate are the arguments that if smoking is banned, smokers will flee like lemmings from bars and restaurants and such establishments will be forced to shutter their doors. Not only does this argument (to me, at least) seem ridiculous given that 37 other states have passed similar bans, and the bar/restaurant scene in places like New York and Washington D.C. hardly seem to be suffering, but it also ignores the overpowering benefits of the legislation – better health and reduced health care costs for everyone. According to the American Cancer Society, smoking-related medical costs (treatments for conditions such as lung cancer, emphysema, or chronic obstructive pulmonary disease – “COPD”) averaged more than $100 billion nationwide each year between 2000 and 2004. This translates into $2,197 in extra medical expenses for each adult smoker per year as of 2004, a number which has undoubtedly increased in recent years.Surely, a law which will allow restaurant and bar employees to work in a cleaner, healthier environment and perhaps encourage others to quit smoking will be a huge step in the right direction towards reducing the costs of medical care and making Michigan a healthier state.
*The opinions expressed in this post are solely those of the author, and do not necessarily reflect the opinions of other attorneys at Frank, Haron, Weiner and Navarro.
]]>In Martinez, the Federal Bureau of Investigation (FBI) began investigating the defendant anesthesiologist, Dr. Jorge A. Martinez, for health care fraud in the summer of 2002. Martinez operated a pain-management clinic in Parma, Ohio, where he regularly prescribed controlled substances and administrated injections for pain relief and billed private insurance carriers, Medicare, Medicaid, and the Ohio Bureau of Workers’ Compensation. The Government’s investigation revealed that Martinez engaged in fraud by omitting physician examinations, giving his patients more injections than were medically necessary or advisable so as to boost billings and leave them dependent on such drugs, and conducting “quickie” office visits where he saw a patient for only 2 or 3 minutes then billed for a much longer visit.
At trial, the government presented evidence that Martinez’s administration of injections to patients far exceeded the state average for pain-treatment doctors in Ohio. The Government also showed that on the days the patients received injections, Martinez only gave his patients an average of 4.14 shots in one visit, while the statewide average was 1.18; and that Martinez saw many more patients per day than other doctors, which evidenced that Martinez provided substandard medical care. This was supported by numbers from practice sign-in sheets, and testimony from Martinez’s staff saying that he frequently spent only two to five minutes with patients during appointments. An expert also opined that a doctor who was properly treating patients for pain could not possibly see that number of patients each day.
The Court noted that while Section 1347 is silent on the issue, other federal statutes elevate punishment when certain willful crimes “result in death.” For example, 18 U.S.C. §242 allows for a life sentence if death results from certain intentional civil rights violations. Courts have previously interpreted 18 U.S.C. §242’s requirement for enhanced punishment to be met when the defendant’s willful violation of the statute is a “proximate cause” of the victim’s death.
Using this standard of review, the Court concluded that the death of John Lancaster was a “reasonably foreseeable consequence” of Martinez’s treatment, since the evidence demonstrated that Martinez treated Lancaster nearly every week for two years, provided him with excessive injections and prescriptions, inadequately monitored him, and failed to provide him with individualized care. Although Lancaster exhibited warning signs such as a raging temper and exhaustion, Martinez failed to remedy or alter the care provided.
Similar evidence was presented with respect to patient Blair Knight – the record showed that during the two weeks preceding Knight’s death, he visited Martinez twice in extreme pain and was so bloated he could not wear socks or shoes and was covered in a rash. There was no evidence or support that Martinez altered his treatment of Knight in any way, even though such symptoms were indicative of drug use.
After review, the Sixth Circuit affirmed Martinez’s conviction under 18 U.S.C. §1347. (Other issues in the case, though not addressed here, include the propriety of the admission of a video portraying a non-witness physician performing medical procedures; sufficiency of the evidence to support Martinez’s convictions of 8 counts of distribution of controlled substances; 15 counts of mail fraud, 10 counts of wire fraud; and 21 counts of healthcare fraud; and whether Martinez’s sentence was both procedurally and substantively reasonable.)
Sadly, however, these numbers lack any real punch in the big picture of health care expenditures. For starters, the first half of FY 2009 reported $274.8 million in audit receivables and $2.2 billion in investigative receivables, which means numbers for the second half of the FY are down $57.6 million and $400 million, respectively. Secondly, the OIG report also disclosed that for the FY 2008, the cost of the Medicare and Medicaid programs (for the federal government and states) was a combined $812.9 billion. Given that the FBI estimates that approximately 3-10 percent of health care spending each year is wasted on fraud and abuse, this means the OIG should be able to recoup roughly $24 billion to $81.29 billion each year.
While the OIG recoveries are a step in the right direction, it is clear that any effective health care reform plan must include extensive pro-active measures to help combat fraud and abuse. Otherwise, expanding health care coverage will only mean increased opportunities for unscrupulous individuals to take advantage of the system.
]]>The lawsuit was filed on May 18, 2005 by the law firm under the qui tam provisions of the federal False Claims Act (31 U.S.C. 3729 et seq.) on behalf of Teri Hall-Dutts, R.N., Robert Kuzina and Donna Rudolph, R.N., in the U.S. District Court for the Eastern District of Michigan in Case No. 05-40351. On July 26, 2006, Christine Paulus and Angela DeGrez, represented by Patricia Stamler of the Bloomfield Hills, Michigan law firm, Hertz Schram, filed a similar lawsuit in Case No. 06-13393. The cases were consolidated in September, 2007 and the settlement announced here resolves both cases.
The settled law suits claimed that, between October 1, 2004 and September 30, 2005, SCCI submitted claims to the Medicare Program for services provided by SCCI Detroit which were not medically necessary because they were provided beyond the date when the patient should have been discharged, or because the patient did not meet admission criteria for an LTACH. SCCI, headquartered in Houston, Texas, operates Long-Term Acute Care Hospitals in several states but the subject matter of the lawsuits were the operations of its facility in Detroit, Michigan. SCCI previously settled another suit in 2007 for $75 million for conduct from 1996-1999 involving numerous Texas locations.
The Relators will share an award of 20.5 percent of the settlement or $170,184.11. The defendant also agreed to pay $107,983.89 for Relators’ expenses and attorney fees. In settling the suit the defendant neither admitted liability nor did the government conclude that the claims were not well founded.
After the jump - why the FCA is crucial to combating fraud
]]> The False Claims Act and similar state Acts, such as the Michigan Medicaid False Claims Act provides incentives to private citizens, called "relators", who discover fraud against the federal or state governments and who bring their information to the government and help pursue the defrauding entities. The qui tam provisions allow Relators to represent the interests of the government to seek damages and civil penalties for a violation of law, and if the action is successful, to receive a portion of the recovery is provided to the Relators.The federal False Claims Act and its twenty-four state counterparts represent the most effective civil fraud-fighting tools the government has to protect the Medicare and Medicaid programs, where it is estimated by the FBI and other governmental agencies that fully 3-10 percent of the nearly $1 trillion annual expenditures are lost to fraud, waste and abuse.
Monica P. Navarro, Maro E. Bush and David L. Haron of Frank, Haron, Weiner and Navarro represented their Relators in this litigation in cooperation with Eastern District AUSA Leslie Wizner, whose dedicated and constant efforts led to this favorable resolution.
“Not only does fraud drive up the cost of health care for all of us, but schemes such as that alleged in these complaints threaten the integrity of the health care system and target the most vulnerable in our society—the elderly and poor,” said Navarro. “We are proud of our courageous clients and proud of the effort we all undertook to recover these funds and to deter future conduct by the defendant and others in the industry.”
]]>However, Congress has already intervened – on November 19, the U.S. House passed legislation which would allocate $210 billion over the next 10 years to prevent the reductions to physicians participating in the Medicare program. The bill (H.R. 3961), which still needs Senate approval, would create a new formula would actually boost doctors’ payments by 1.2 percent, instead of the 21 percent reduction now scheduled to take effect.
According to House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.), the proposed Fee Schedule formula is too low and “would bring about havoc in the Medicare program.”
While the Obama administration has endorsed the plan (a Nov. 19 statement from Press Secretary Robert Gibbs called the measure “an important step forward”), the future of the bill in the Senate is not so certain. For starters, the Senate will begin debates this week on the passage of the Senate’s health care reform bill, the “Patient Protection and Affordable Care Act.” With the Patient Protection Act guaranteed to seize the spotlight, it is likely that little attention will be given to the H.R. 3961. Additionally, the Senate already blocked a similar proposal last month.