Health Care Lawyer Blog

The Troy, Michigan law firm of Frank Haron Weiner, PLC, in conjunction with the United States Department of Justice and the Texas Attorney General’s Office, today announced a settlement of $2,470,000, plus statutory attorney fees of $130,000, with the City of Dallas to resolve allegations of improper Medicare and Medicaid billings.

The settlement stems from a lawsuit filed by the firm in 2009 under the qui tam provisions of the federal False Claims Act and the Texas Medicaid False Claims Act. The federal False Claims Act (and similar state legislation, such as the Texas Act) allows private individuals with knowledge of fraud against the government to file lawsuits on the government’s behalf. If the case is successful, the private plaintiffs, known as “relators,” are entitled to a percentage of the monies recovered by the government.

Relator Douglas Moore’s complaint, filed in the U.S. District Court for the Northern District of Texas, alleged that from January 2006 to May 2010, the City of Dallas knowingly defrauded the Medicare and Texas Medicaid programs by improperly billing for certain ambulance transport services. Specifically, Moore alleged that the company hired by the City of Dallas to perform ambulance-service billing, Southwest General Services of Dallas, LLC, coded 100 percent of the City’s 911-dispatch ambulance transports at the Advanced Life Support (“ALS”) level, regardless of whether the patient’s medical condition justified the claim or if an ALS-level service was actually furnished. Relator alleged that many runs should have been coded and billed as basic life support (“BLS”), which is reimbursed at a lower rate by both Medicare and Medicaid. Accordingly, Moore alleged that the City received higher Medicare and Medicaid reimbursements than it was entitled to and was at all times aware of Southwest General Services of Dallas, LLC’s activities.

Continue reading "FHW False Claims Act Lawsuit Results in $2.4M Settlement For Ambulance Overbilling" »

Today's post was authored by FHWN law clerk Scott Malott

Doctors and patients that rely on Medicare for health care coverage can breathe a sigh of relief today, as the United States Senate has voted to delay a 23% pay cut for Medicare services by one month. The reduction was set to take effect on December 1, 2010, and the Senate has delayed it to January 1, 2011, which it hopes will allow enough time to develop a more permanent solution.

Extending the pay cut is nothing new, however; these are the same pay cuts that the federal government extended by six months in June, by two months in April, and by one in March. In fact, the legislature has been delaying these cuts since they were set to take effect in 2002. The cuts are due to a 1990s budget balancing law that created the Medicare sustainable growth rate (SGR) formula, which was intended to control Medicaid spending by imposing annual reductions. That formula called for a 4.8% cut in 2002, and because of the repeated delay, the necessary reduction to meet the formula’s guidelines is now 23%.

While Senators Baucus and Grassley have stated that they hope to pass a mutually acceptable 12-month postponement by the end of this year, the American Medical Association (AMA) is stumping for repeal of the SGR formula altogether. The AMA says that its members simply cannot afford the pay cuts, and many doctors have said that they may stop accepting Medicare patients if the pay cuts go through. While both Democrats and the newly empowered Republicans agree that there needs to be a solution, the difficulty comes in how to pay for it. The one-month delay that the Senate agreed to this week comes at a cost of $1 billion over the next 10 years. To completely repeal the formula, the legislators will have to come up with an estimated $300 billion over the next 10 years.

Whatever the solution, this discussion is bound to arise again before the new scheduled pay-cut date of January 1.

The U.S. Senate left for a long weekend Friday without tying up one major loose end – the so called “doc fix” which would prevent a 21 percent cut in Medicare reimbursement to physicians.

House Bill 4213, which would give physicians a 19-month reprieve before the pay cuts went into effect, was passed by the U.S. House of Representatives in May but has not yet been approved by the Senate. The repeatedly delayed cut technically took effect June 1, 2010, but the Centers for Medicaid and Medicaid Services again announced that contractors would not process claims for services delivered on the first 10 business days of the month. However, this “grace period” ends June 15. Therefore, unless the Senate swiftly passes the Bill and President Obama approves, physicians will see a significant reduction in Medicare pay rates.

AMA President J. James Rohack has lambasted the Senate for its failure to act, claiming that seniors are being hurt by the cuts in that physicians are being forced to limit the number of Medicare patients they can treat. According to Rohack, one in five physicians say they are already limiting the number of Medicare patients in their practice due to reduced payment rates, and the resulting impact on seniors' health care will be dramatic.

The U.S. House of Representatives voted 289-112 this morning to approve H.R. 4851, the Continuing Extension Act of 2010. The bill, which was approved by the Senate yesterday and sent back to the House for a final vote on amendments, will delay the proposed 21 percent cut in Medicare Physician rates, as set out in the 2010 Medicare Physician Fee Schedule (MPFS). President Obama is expected to sign the bill later today.

The House vote represents the third delay in implementing the 2010 MPFS, and it is suspected that doctors might never actually experience the effects of the cuts. Earlier this month, the Senate recessed without voting on H.R. 4851 and in order to avoid having the cuts take immediate effect, the Centers for Medicare and Medicaid Services instructed contractors to avoid proceesing Medicare claims for 10 business days. The last-minute Senate voted spared physicians from seeing reductions to processed claims.

Each year, the proposed Medicare Physicians Fee Schedule (MPFS) rates threaten to take a nosedive, and each year Congress has stepped in to prevent those cuts from occurring. The 2010 MPFS (originally slated to take effect January 1, but subsequently delayed until February 28) contain cuts of 21.1 percent, which are the most significant since 1992. The Fee Schedule is based on Medicare’s sustainable growth rate (SGR), a formula which is based on the economy’s health and has threatened cuts to physician payments every year since 2003.

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.

Last Wednesday the Centers for Medicare and Medicaid Services (“CMS”) published the final rule (subject to comment period) for the 2010 Medicare Physicians’ Fee Schedule. (See 74 FR 61738, Nov. 25, 2009.) Notably, the Fee Schedule includes a proposed decrease of 21 percent in the physician fee schedule conversion factor, meaning reimbursements for many procedures will drop significantly under the new rule. The most affected practitioners will be rheumatologists, surgeons, pain management specialists, radiologists and non-invasive cardiologists. For example, reimbursement costs-for-procedure for echocardiography will drop roughly 35 percent under the proposed rule.

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.

As lawmakers scramble to devise ways to fund the health care overhaul, a recent estimate from the Federal Bureau of Investigation shows there may be a cool $75-$250 billion floating about in the health care system.

It may not be easy to recoup, but that’s the amount that could be saved each year by eliminating fraud and abuse in public and private health care programs. The estimate, which appears as part of an article published by HHS OIG chief counsel Lewis Morris in the latest issue of “Health Affairs” (September/October 2008, Vol. 28, No. 5) also means that roughly 3-10 percent of total health spending is wrongfully siphoned away by fraudsters.

Given that Medicare is expected to cost the federal government $503.1 billion in fiscal year 2009 (and Medicaid is anticipated to cost federal and state governments $386 billion), these numbers make clear that health care fraud is not just committed by a few scattered criminals masquerading as health care providers. Instead, such fraud is pervasive and extends all the way from Pfizer boardrooms to infusion clinics.

While combating such fraud may seem daunting, the article identifies several ways in which fraud can be controlled:

Five ways to combat health care fraud after the jump:

Continue reading "3-10% of Health Care Funding Lost to Fraud Each Year" »

Monica Navarro pointed out to me that WPS Medicare Part B e-News today reported that independent laboratories may no longer (for dates of service on or after July 1, 2008) bill Medicare for the technical component (TC) of physician pathology services furnished to patients of a covered hospital, regardless of the beneficiary's hospitalization status (inpatient or outpatient) on the date that the service was performed.

WPS indicated that this ruling has its genesis In the final physician fee schedule regulation published in the Federal Register on November 2, 1999, where the Centers for Medicare & Medicaid Services (CMS) stated that it would implement a policy to pay only the hospital for the TC of physician pathology services furnished to hospital patients. Prior to this proposal, any independent laboratory could bill the carrier under the physician fee schedule for the TC of physician pathology services for hospital patients. At the request of the industry, to allow independent laboratories and hospitals sufficient time to negotiate arrangements the implementation of this rule was administratively delayed. Subsequent legislation formalized a moratorium on the implementation of the rule. As such, during this time, the carriers and, more recently, Medicare Administrative Contractors (MAC), have continued to pay for the TC of physician pathology services when an independent laboratory furnishes this service to an inpatient or outpatient of a covered hospital.

The most recent extension of the moratorium was established by the Medicare, Medicaid, and SCHIP Extension Act (MMSEA). Section 104 of the MMSEA expired on June 30, 2008, thus ending the moratorium.