As a Memphis, Tennessee qui tam and whistleblower attorney, I wanted to make you aware of certain provisions that preclude a doctor and hospital from receiving illegal kickbacks in violation of federal law.
As a whistleblower attorney, we are interested in speaking with persons willing to make known the truth about company practices and are willing to file a qui tam or whistleblower action.
The Medicare Program which provides federal reimbursement for medically necessary services and supplies used by eligible persons or Medicare beneficiaries was established in 1965 by Title XVIII of the Social Security Act, 42 U.S.C. §1395 et seq. Medicare health reimbursement is governed by statute and by regulations issued by HHS, the United States Department of Health and Human Services. CMS, the Centers for Medicare and Medicaid is responsible for the administration of the Medicare program and contracts with private companies in each state known as intermediaries and carriers to administrator Part A and Part B of the Medicare Program respectively. Medicare allows payments under Part A to acute care hospitals, based on annual cost reports filed with intermediaries citing to claims for services rendered to federal payer program beneficiaries and based on the designation as a certified federal payer program provider. Payments for claims for services are based upon appropriate diagnostic related groupings for inpatient stays, on the basis of a fee for service arrangement based on prevailing charges established by the intermediaries for services and based on the admission meeting generally accepted admission criteria.
Medicare allows payments under Part B (supplementary medical insurance for the aged and disabled) to cover non-institutional services such as physician services and said payment is customarily made on a reasonable charge basis only when medical necessity criteria are met. Individual physicians and group practices of physicians request payment for Medicare Part B for services provided to Medicare beneficiaries, the individual physicians or group practices of physicians are required to submit their application or claim for payment to the Medicare carrier on a proper claim form designated by CMS. 42 CFR Part 424.32.
42 U.S.C. §1320(a-7(b)(b)(1)(2) and (3), the anti kick-back statute, prohibits anyone from knowingly and willfully making or causing to be made any false statement or representation of a material fact in any application for any benefit or payment under a federal healthcare program.
Since January 1, 1997, when the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) became effective, anti kick-back rules were extended to all federal programs, including tri-care and Medicaid, except for the Federal Employee Health Benefit Program. Effective July 1, 1995, 42 U.S.C. §1395(n)(n), commonly known as “Stark II”, prohibits a physician from referring Medicare and Medicaid patients for designated health services to entities in which the referring physician has a financial relationship. Conversely, the acceptance by a hospital of a Medicare or a Medicaid patient as a result of a referral from a physician having a “financial relationship” with the entity providing healthcare is unlawful. Stark II prohibits a hospital (or other healthcare provider) from submitting Medicare claims for payments based on such referrals. The statute also expressly prohibits the payment of any Medicare claim submitted in violation of 42 U.S.C. § 1395(n)(n)(a)(1).
42 U.S.C. 1395(n)(n)(b) provides 10 general exceptions which allow referrals between physicians and such entities which maintain financial relationships. If the financial relationship between the physicians and entities does not fall within one of the exceptions, then a physician may not make a referral to any entity with which the physician may have a financial relationship for the furnishing of designated health services, which consists of (a) clinical laboratory services, (b) physical therapy services, (c) occupational services, (d) radiology or other diagnostic services, (e) radiation services, (f) durable medical equipment, (g) internal nutrients, equipment and supplies, (h) prosthetics and prosthetic devices, (i) home health services, (j) outpatient prescription drugs and (k) in-patient and out-patient hospital services. Moreover, the regulations implementing 42 U.S.C. § 1395(n)(n) expressly require that any entity collecting payment for a service performed under a prohibited referral must refund all collected amounts on a timely basis.
The applicable provisions of Stark II specify financial arrangements as “an ownership or investment interest in the entity to which a referral is made” or a “compensation arrangement between the physician and the entity.” If the financial arrangement consists of a compensation arrangement as it does, Stark II provides that the physician or entity which is a party to the compensation agreement in which submits a bill for services is in violation of Stark II unless the terms of the arrangement meets certain requirements. The terms of such personal service arrangements are permissible under Stark II if the arrangement is set out in writing, signed by the parties, specifies the services covered by the arrangement, the arrangement covers all services to be provided by the physician to the entity, the aggregate services do not exceed those reasonable and necessary for legitimate business purposes, is for a term of at least one year, the amount of the reimbursement is commensurate and reasonable and “does not exceed fair market value.”
As a condition of participation in the Medicare program, healthcare providers accepted the responsibility for ensuring “(a) adherence to all Medicare laws and guidelines which dictate the proper operation of their businesses, (b) adherence to guidelines as outlined by the federal government, and (c) that there would be no prohibited referrals nor prohibited billings to Medicare. As a further condition of participation in the Medicare program and as a condition precedent to the receipt of reimbursement for Medicare costs incurred for treating and providing care to Medicare beneficiaries, healthcare providers are required to complete and have actually completed on an annual basis cost reports on CMS Form 2552 which will contain representations and certifications by healthcare providers that it was “familiar with the laws and regulations regarding the provision of healthcare services and that the services identified in this cost report were provided in compliance with such laws and regulations.” The submission of such form and information contained therein is an essential element in the Medicare claims process. It should be noted that the CMS claims form contains language similar to the following:
Misrepresentations or falsification of any information contained in this cost report may be punishable by criminal, civil and administrative action, fines and/or imprisonment under federal law. Furthermore, if services identified in this report were provided or procured through the payment directly or indirectly of a kick-back or otherwise illegal, criminal, civil and administrative action, fines and/or imprisonment may result.
Most hospitals operate under the perspective payment system (PPS) for cost reporting periods occurring on or after October 1, 1983. Under the PPS Medicare pays a fixed amount of money for hospital admissions of Medicare beneficiaries determined by the diagnostic related group (DRG) into which the beneficiaries fall. This means that a pre-determined, fixed and set all or nothing Medicare payment is made to hospitals based on the DRG assigned to the specific beneficiary so long as the hospital admission is medically necessary.
Workers and persons all across the country witness actions at their work that may be unlawful or even corrupt. Unfortunately, some employees and workers feel that they will be fired, terminated, harrassed or punished if they report an unlawful or corrupt action. These reporters, however, are protected by the law as a Whistleblower and can receive compensation because of the False Claims Act or the Medicaid False Claims Act. If you have reported actions that may be fraudulent, then you should talk to a Whistleblower or qui tam lawyer about your facts.
Whistleblowers help the government to get back billions of dollars each year with the help of the False Claims Act. In fact, fraudulent Medicaid claims are also caught by whistleblowers having the Medicaid False Claims Act on their side. If you report a false claim or fraudulent action to the government, then the government will give you, the whistleblower, a part of the money that gets recovered. This is because of qui tam requirements. Qui Tam means that a person files a lawsuit for the king and also for him or herself. These requirements and lawsuits were made popular during the Civil War when many people were getting away with fraudulent actions against the government. In 1986, the False Claims Act was amended to raise the total compensation given to people who reported fraudulent actions, or whistleblowers. If a whistleblower works with a lawyer then it may be possible for them to get three times the amount the government would get in damages and also get additional compensation for general fines.
For more information, please contact whitsleblower and qui tam attorney Ed Wallis at 1-800-632-1404 or send Mr. Wallis an email below for a free initial consultation.
