Everything You Need to Know About Medicaid Fraud
How Medicaid Fraud Can Impact on Your Practice
As enrollment expands and the number of Medicaid claims continues to rise, the focus on fraud and abuse of the government program increases. The government’s ongoing search for mistakes, fraud, abuse and waste makes all medical providers – particularly physicians who routinely submit Medicaid claims – vulnerable to accusations and charges of Medicaid fraud.
Both Medicaid and Medicare appear prominently on the U.S. Government Accountability Office’s High Risk List which identifies the government programs most susceptible to fraud. Medicaid’s diversity of recipients, state involvement and extensive growth – 72.2 people were enrolled as of 2016 – places it squarely among the government’s top priorities.
What does that mean for you, as a medical provider or practitioner?
In a single year, the number of individuals receiving Medicaid rose 25%, placing tremendous burdens on the joint federal and state programs. As a result, enforcement agencies and investigative teams are taking note of the seemingly inevitable fraud and abuse that accompany Medicaid’s growth. Each year, Medicaid Fraud Control Units launch thousands of investigations and win hundreds of convictions.
In New York alone, Medicaid fraud charges have led to 707 investigations, 120 convictions, and the recovery of more than $228,000,000 in damages. Texas had 1,367 investigations that resulted in more than $128,00,000 being recovered in a single year, and Ohio’s 1,460 investigations resulted in 126 convictions and more $64,000,000 in recovered losses.
If you are being investigated by a government agency or have been formally charged with a crime related to your health care practice we are here to help. We can connect you with an experienced health care attorney and work to protect your rights.
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Exactly What Constitutes Medicaid Fraud?
Knowingly Misrepresenting a Medical Bill, Procedure, or Diagnosis
Medicaid fraud occurs anytime a practitioner knowingly misrepresents a medical bill, procedure, or diagnosis to obtain an undeserved benefit from the Medicaid program. Other than in very rare situations, Medicaid fraud results in a financial windfall to a medical provider.
Abuse may take the form of processes or actions that unnecessarily increase costs for a patient’s treatment or ongoing care. These include actions taken outside acceptable medical practices or those that intentionally manipulate fiscal practices to raise medical costs and increase the amount of claims submitted to a Medicaid program.
State Determines Processes and Penalties Imposed on Practitioners
While Medicare is a federally-funded and provided program, Medicaid is a state-provided governmental health insurance program that is incentivized by federal funding. State money supplements the amounts allocated by the federal government and directs the implementation and management of the program. State involvement also determines the processes and penalties imposed on practitioners who are convicted of either criminal or civil Medicaid fraud.
To you, as a medical practitioner, this means you may be susceptible to accusations of one or more of three separate bad actions related to your Medicaid-related billings, including fraud, abuse, and waste.
Definition of “Waste”
Lastly, waste is defined as knowingly inputting inaccurate payments and/or using unnecessary resources in medical treatment.
What Laws Regulate Medicaid Fraud?
Federal Medicaid Fraud Laws
As with Medicare fraud and other forms of healthcare fraud and abuse, several federal laws make it illegal, unlawful, and even criminal to commit Medicaid fraud.
Federal False Claims Act (FCA)
The FCA isn’t a healthcare specific statute, but instead creates a civil right of action against any company or individual that overcharges or commits fraud against the federal government. Specific to medical practitioners the FCA is applicable when a Medicaid bill is submitted for treatment that wasn’t medically necessary, for a ghost or non-existent patient, under the incorrect billing code, or for treatment that was never provided.
The Stark Law, otherwise known as the Physician Self-Referral Law, was specifically passed to prevent Medicare and Medicaid fraud against federal and state governments. The law prevents practitioners from referring patients to a medical practice or group in which the practitioner has a financial interest. The Stark Law also prevents referrals to a medical practice in which the practitioner’s family member has an interest in the practice. Certain exceptions to the Stark Law apply.
Anti-Kickback Statute (AKS)
The AKS is perceived as a similar statute to the Stark Law, but makes it a criminal offence and civil action in a slightly different manner. Under the AKS, it is illegal to provide, accept, offer, or agree to exchange anything of value, including money, free rent, medical equipment, or personal property, for patient referrals. In terms of Medicaid fraud, the unlawful referrals must be for Medicaid patients and Medicaid-available treatment.
Other referrals aren’t allowed, but would be considered Medicare fraud or insurance fraud, depending on the circumstances.
State Medicaid Fraud Laws
Several states also regulate fraud and abuse against Medicaid programs. These statues are substantially similar from state to state, including the implementation of laws to prevent false and fraudulent claims. Certain state have also implemented anti-kickback statutes and statutes that specifically make it illegal to defraud a state healthcare program.
The following are examples of the different laws states have enacted to prevent Medicaid fraud in a specific state. The law in your state could differ from these examples. The advice of a Medicaid fraud defense lawyer is necessary to parse the applicable law in your state.
New York False Claims Act
One of the most stringent false claims acts at the state level is in New York. Found in Article 13 of the State Finance Law, the New York False Claims Act makes it illegal to present knowingly present a false record for payment or knowingly use or make a false record to support a false claim.
Texas Patient Solicitation Act
In Texas, the Patient Solicitation Act prohibits physician and other medical referrals similar to the federal Stark Law discussed above. The Texas Patient Solicitation Act is found at Chapter 102 of the Texas Occupations Act, part of the general state statutes. While known as the “Texas Stark Law” the act specifically make it illegal in Texas to knowingly offer or accept any remuneration, whether cash or other value, in return for soliciting a patient from a person, “licensed, certified, or registered by a state health care regulatory agency.”
Washington Anti-Rebating Statute
As in the other two states, several state laws make Medicaid fraud illegal, including the Washington Anti-Rebating Statute. The issue with using this state law, instead of the federal Anti-Kickback Statute, is that it’s substantially more vague. Despite this fact, the impact for practitioners is the same with the law aimed at the prevention of unearned payments in return for medical services.
State Licensing Boards
State medical boards and other licensing agencies have regulations and professional codes of conduct. Medicaid fraud or abuse often constitutes professional misconduct. In these cases, the the medical practitioner may or may not face criminal or civil charges in court, but can still be punished under the licensing board’s administrative procedures.
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Punishments and Penalties for Medicaid Fraud Charges
Federal & State Statutory Punishments
Each of the federal statutes imposes a different statutory punishment. The laws with a criminal cause of action, such as the AKS, contain punishment through incarceration in federal prison and steep criminal fines. Federal statutes with a civil cause of action are punishable through a steep fine, often more than double the total amount of fraud committed by a medical practitioner.
Specifically, the FCA allows for civil fines totaling three times the amount of financial damages sustained by Medicaid due to the practitioner’s fraud and an additional $21,916 per false claim submitted to Medicaid.
The Stark Law imposes civil fines totaling $24,253 per service, treatment, or claim that arose from an improper referral. It’s essential to note that punishment under the Stark Law isn’t per referral, but per treatment, service or claim. Therefore, a single referral could result in several different subsequent treatments, and each would impose a $24,253 fine.
Exclusion from Medicaid Programs
The federal Exclusions Statute, located in the United States Code at 42 U.S.C. § 1320a-7, practitioners convicted of Medicaid fraud must be excluded from federal healthcare programs. When the Office of Inspector General (OIG) employs the Exclusion Statute for a conviction of Medicaid fraud, the practitioner is prohibited from participation in all federal healthcare programs, including Medicare, TRICARE, and Veterans Health Administration.
As well, the Exclusion Statute prevents a medical practitioner convicted of Medicaid fraud from contacting or working with a medical practice that provides Medicaid treatments, or treatments under any other federal healthcare program. Finally, the Exclusions Statute also prevents an excluded practitioner from submitting claims under a different medical license or approval. This means that an excluded practitioner can’t work in a different medical profession, for example prohibiting an excluded doctor from working as a nurse in a practice that submitted Medicaid claims.
Loss of Ability to Work in Medical Field
Loss of licensure and ability to practice medicine is a major concern for any practitioner investigated or charged with Medicaid fraud. As discussed earlier, Medicaid and other healthcare fraud is considered professional misconduct by most state licensing boards.
Through administrative proceedings, these boards can suspend or revoke a practitioner’s license, thus preventing you from any further work in the field.
Who Investigates Medicaid Fraud in Each State?
Medicaid fraud is investigated by a wide range of federal agencies, including the Federal Bureau of Investigations, Office of the Inspector General, Centers for Medicare and Medicaid Services, Internal Revenue Service, and Office of the Attorney General. Prosecutions for Medicaid under federal laws are similarly handled by the Office of the Attorney General and Department of Justice.
However, the majority of investigative and prosecutorial actions for Medicaid fraud involve or are run entirely by state agencies and prosecutors.
State Medicaid Inspector General Offices
As the issue of Medicaid fraud gained more attention on the national and local scale, states began to take more action against medical practitioners involved in these fraudulent activities. The inspector general’s office in each state started taking responsibility for investigation into potential Medicaid fraud and bringing more cases. Now, many states including New York, Texas, Florida, Illinois, Georgia, Kansas, and New Jersey have independent Medicaid inspector general offices.
Medicaid Fraud Control Units
All states have an investigative unit dedicated to identifying and collecting evidence of Medicaid fraud in the state. The responsibilities and authority of each Medicaid fraud control unit is different. For example in Colorado, the unit employs a several criminal investigators, an auditor, nurse investigator, and team of prosecutors. The unit has authority not just to investigate, but also prosecute those suspected of Medicaid fraud. In Florida, the Medicaid Fraud Control Unit has similar investigative and prosecutorial powers. The Florida unit also accepts reports and information from whistleblowers.
Another cost-effective and efficient way for states to uncover Medicaid fraud is through whistleblowers. Most state Medicaid Fraud Control Units and other fraud detection agencies have a backlog of information and reports to investigate, which could expose the government to substantial losses. This is where whistleblowers are useful.
Nearly every state has enacted some form of whistleblower action. A whistleblower is an individual unrelated and unattached to the state government that collects and reports evidence of Medicaid fraud to the state’s inspector general, Medicaid Fraud Control Unit, or attorney general for investigation and prosecution. In return, the whistleblower receives a percentage of the civil fines recovered by the state government.
Forming a Defense to Medicaid Fraud
An experienced Medicaid fraud attorney can assess the investigation, subpoena, or charges against you and determine the best strategy for defense to the fraud accusations. There are several strategies available to a skilled attorney. Your attorney may consider the following Medicaid fraud defense, but will ultimately build a defense based on the specific circumstances of your situation.
If the government has a weak case for Medicaid fraud, hasn’t uncovered documentation of fraudulent claims, or is in the early stages of a state agency audit, a defense to Medicaid fraud is actual innocence. A Medicaid defense attorney will argue that there is no evidence linking a medical practitioner to the suspected fraud, and the reason for this lack of evidence is that the fraud didn’t occur.
Lack of Intent
Many of the statutes, both federal and state, that prohibit Medicaid require knowledge of the fraudulent conduct. A medical practitioner that unknowingly or mistakenly submitted an inaccurate claim or bill is not guilty of Medicaid fraud. Often, the government uses a pattern of fraud, such as multiple claims for the same treatment that isn’t medically necessary in any of the instances.
Mistake or accidental error also form the basis of another defense to Medicaid fraud, administrative error. The government argues that the medical professional is responsible for overseeing and confirming Medicaid billing codes and claims, but in reality administrative personnel handles the submission. If a medical professional can show that a set of compliance procedures were in place, and the administrator intended, but failed to follow those procedures, it could be a valid defense.
Medicaid Fraud in the News
In an investigation assisted by the New York Medicaid Attorney General’s Office, the federal Medicare Fraud Strike Force levied $125 million in fraud charges against three doctors, a chiropractor, three physical therapists and two medical company owners for fraud against Medicaid and Medicare.
Announced in September 2017, the charges included defrauding Medicaid through payment of kickbacks to physicians in exchange for sending Medicaid patients to the practice and submission of claims for medically unnecessary physical therapy and services. These charges focused on illegal activity that involved elderly and especially needy patients – clearly demonstrating New York’s commitment to addressing Medicaid fraud that targets the most vulnerable patients.
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What to Do If You Are Investigated for Medicaid Fraud?
If a state or federal agency launches an investigation or audit into your medical practice and Medicaid claims, your first steps are incredibly important. The specific advice of your Medicaid fraud attorney always receives first priority, and if there is any conflict between the steps provided and counsel of your lawyer, always listen to legal advice provided.
When you first learn of an investigation for Medicaid fraud, start by:
Discussing the Implications with Your Medical Group
The results of an investigation or audit will impact all practitioners in your medical group or practice. It’s necessary that all doctors and licensed professionals involved in the medical group are involved in early discussions and aware of the investigation. A strategy for defense should include all practitioners, with a focus on those that could be directly involved or implicated by a government investigation.
Performing an Internal Investigation
Once all medical practitioners in your medical group are briefed and aware of the nature of a government investigation, you must determine the level of exposure and risk. The best strategy is an internal investigation into the documentation and practices that could indicate or suggest Medicaid fraud.
Ceasing Any Improper or Questionable Activities
Your practice should always have a proper compliance plan in place for all Medicaid claims and billing. Practitioners and administrative staff should follow this plan in all instance, but if there are variations or inconsistencies in actual practice, they should be corrected quickly.
Hire an Attorney
The sooner you engage legal counsel to guide your defense against money laundering, the better strategy you can expect for your case. A Medicaid defense lawyer can help determine how to handle an audit, what information to provide during an audit, and how to respond to subpoena questions, should the situation arise.
Consider Your Community and Patient Impact
Criminal charges draw unwanted and negative attention by media outlets, social media channels, and from your patients. You want to minimize the impact of this information by working closely with your attorney and other relevant parties.
If You’re Charged with Medicaid Fraud in Any State
Whether you’re embroiled in a government investigation by Medicaid Fraud Control Units or already facing criminal charges by a state attorney general’s office, you need the assistance of legal counsel. In fact, to protect your medical license and future employment, you need the best possible Medicaid fraud defense available to you.