Legal Services for Medical Billing Companies
False insurance claims cost our federal government tens of billions of dollars every year. These false claims expose medical providers to potential civil and criminal liability under federal law. As a medical professional, you should be properly educated about the potential effects of federal and state laws on your medical billing practices.
Which medical providers may be targets for healthcare fraud?
All medical professionals who deal with federal third-party insurance programs, including Medicare and Medicaid, may find themselves targeted. This includes:
What constitutes medical billing fraud within the healthcare industry?
Medical billing fraud is comprised of several factors, including billing for services that were not actually performed or medically unnecessary/ inaccurately charged. It also includes over-billing for services through manipulation of computer billing codes.
What are the largest medical billing companies and what do they do?
Medical billing companies have one specific function – to obtain reimbursement from third-party providers (i.e., insurance companies). The five largest companies include:
Who submits the bills?
Usually, a billing specialist sends bills for the treatment provided. In a small dentist or doctor’s office, the office manager might send the bills to the insurance companies. Bigger companies may have more employees to assist with this process.
Billing specialists often submit bills to insurance companies using specific software that contains medical billing codes. This software helps send the document showing the treatment provided and the time spent on that procedure.
Do federal laws and regulations govern medical billing fraud?
Yes, they do. Many healthcare-oriented federal laws apply specifically to medical billing fraud. As a medical professional, you must be vigilant when it comes to billing to avoid being held responsible for violating the False Claims Act outlined in 31 U.S.C. 3729.
Under this law, anyone who knowingly submits a false claim for medical services to the government may be subject to FCA liability.
Medical providers can be subject to liability if they violate the Stark Law. The Stark Law prohibits referrals to designated healthcare providers such as Medicare or Medicaid based on improper financial relationships among immediate family members under 42 U.S.C. 1395.
Additionally, 42 U.S.C. 1320 of the Anti-Kickback statute may apply to any medical professional who offers a monetary kickback to persuade another person to make referrals to any federal program such as Medicaid or Medicare.
Who may investigate medical billing fraud claims?
Many federal agencies can investigate medical billing fraud, including:
- The Department of Justice
- The FBI
- The IRS
- The Department of Labor
- The Office of the Inspector General, and your
- The State Attorney’s Office at the local level
What criminal punishment could you face if you commit medical billing fraud?
Violation of federal healthcare law may subject healthcare providers to severe criminal penalties. For example, if you are found guilty of submitting false medical claims under the False Claims Act, you may be sentenced to as many as 10 years of imprisonment.
A medical professional who refers patients to a CAT Scan or MRI facility in response to any form of payment for such referrals may qualify both the referring doctor and the facility to criminal punishment under the federal anti-kickback statute. This statute carries penalties that may result in up to five years of incarceration.
What defenses are available to healthcare professionals?
If you find yourself under investigation for healthcare fraud, you will need o speak with an experienced attorney as soon as possible. It is very important to review the allegations to form a viable defense(s).
Healthcare professionals can argue that they lacked the specific intent. For example, if you did not to knowingly or willfully file false medical claims, you may not be subject to false claims act liability. If you made an honest mistake, you might be found innocent.
When contesting evidence that is obtained without probable cause or through unlawful search and seizure, medical professionals can also invoke their rights to Fourth and Fifth Amendment defenses.
What audits or investigations might medical billing companies and medical professionals expect to undergo?
Whether you are a medical professional or a medical billing company representative tasked with submitting medical claims, you may be subject to long-term external and internal billing audits. Such audits are often conducted by contracted auditors appointed by Medicaid and Medicare.
In more serious cases, financial audits can be conducted by auditors from the Department of Justice or Office of the Inspector General. Auditors can review your financial records and billing reports, along with all other data associated with your medical claim submissions.
What is your proper response to a Medicare or Medicaid billing audit?
It is imperative that you respond properly to government healthcare audits and investigations. In case you are ever asked to respond to an audit, you should:
- Retain complete records of all of your electronically and manually stored medical claims, and all telephone entries with each carrier that include the date, time, and place of each written or oral communication.
- Gather and copy all of the records requested by the government or carrier.
- Ensure that all of your medical billing claims are accurate and completely disclosed.
- Ensure that no medical claims are deleted, altered or modified in any way that may result in your becoming subject to criminal liability.
- Avoid coding errors.
Consult with experienced healthcare counsel.
What can you do to prepare for the possibility of civil litigation resulting from a healthcare billing investigation?
It is important that you maintain proper documentation and retain counsel to ensure their ability to respond to any civil complaints or audit investigations that allege violations of the federal healthcare law.
As a medical provider, proper representation is necessary to help you avoid the potential for civil judgments and the risks.
What steps should you take to prepare for a criminal trial in a healthcare fraud case?
Simply put, all medical professionals should immediately retain experienced healthcare defense counsel who can help:
- Prepare an appropriate healthcare defense
- Prepare you to properly defend your interests in financial and medical healthcare audits
- Assist in preparing pre-trial motions in an effort to dismiss and suppress damaging evidence in advance of trial
- Retain appropriate expert witnesses to share their expertise in your defense during trial
Are there examples of medical billing healthcare fraud cases in the news?
The Department of Justice website revealed that in December of 2011, an owner of a medical billing company was indicted on 10 counts of healthcare fraud and identity theft.
The indictment alleged that Jason Townsend, as the owner of a medical billing company, called Townhall Enterprises, and submitted false medical claims for therapy services. Townsend billed for more than 400 hours of medical services when only 269 hours of service were actually provided.
The defendant faces a ten-year prison sentence, combined with more than $250,000 in fines for each count of the indictment. Townsend ultimately entered into a plea deal and received a 42-month prison sentence. His appeal was recently denied by the Fourth Circuit Court of Appeals in North Carolina on February 16, 2018.,
In another press release, the DOJ reported that a Detroit doctor and the owner of a medical billing company were indicted for a $26 million healthcare fraud scheme. Both defendants were shown to have intentionally submitted false medical bills for nerve block injections that were never provided.
Both Dr. Trotter and Elaine Lovett, the owner of the medical billing company, conspired to submit fraudulent bills to Medicare from May 2008 until May 2014. Each of them was sentenced to 15 years in jail.
Here are some recent medical fraud cases that were decided by the courts.
In Allstate Ins. Co. v. Rozenberg, a licensed neurologist was convicted of Mail and Wire Fraud, and RICO violations for conducting medical services and diagnostic tests in order to collect no-fault benefits in personal injury cases. The tests were deemed to be medically unnecessary.
Similarly, in Liberty Mutual v. Excel Imaging Inc, radiologists were charged with RICO, and false claims act violations for submitting false medical diagnostic claims in order to collect no-fault benefits for injured motorists.
Moreover, in U.S. v. Meislin, a physician and his former employee were found guilty of 23 counts of healthcare fraud for making false statements in presenting improperly coded medical bills under 18 U.S.C. 371, 1035. The court found that the bills constituted false claims as the doctor essentially over-billed patients at a pain management clinic.
The bills, submitted between 2009 and 2012, falsely stated that a licensed doctor was present during the medical procedures in question, when really no licensed doctor was present at those times. These procedures could not be appropriately billed because only the physician’s assistants and nurse practitioners were present.
On May 22, 2015, Dr. Kuthuru and his office associate, Bonnie Meislin, were issued concurrent healthcare and prescription drug fraud sentences consisting of 18 months in prison. They were also ordered to pay restitution in the approximate amount of $84,265.
Another case involving false claim act violations was brought against a Temple University doctor who was sentenced to 87 months in prison in which he was convicted of 150 counts of healthcare fraud. Dr. Kubacki, an ophthalmologist, had submitted fraudulent claims to Medicare, causing him to bill Medicare $1.8 million unlawfully.
The doctor submitted medical claims for patients whom he neither personally saw nor examined. As a result of that verdict, the defendant was ordered to pay restitution in the amount of $1,014.605.87.,
What are the most common types of medical billing fraud?
There are many different types of medical billing fraud. The most commonly charged instances of medical billing fraud involve medical companies submitting false claims as directed by other medical professionals. Such practices may involve:
- Unbundling or entering numerous codes to identify procedures that are usually described in a single code
- Upcoding or manipulating billing codes to obtain increased payments from Medicaid and Medicare deliberately
- Falsifying a patient’s diagnosis to justify medically unnecessary tests, surgeries, or other procedures
- Misrepresenting non-covered treatments as covered treatments
- Waiving patient copays or deductibles for medical or dental care
What negative effects are caused by medical billing fraud?
Medical billing fraud costs the federal government billions of dollars every year. Billings for false claims cause Medicaid and Medicare insurers to pay out vast amounts to cover unjustified medical claims that cost federal taxpayers money and increase both premiums and copays for medical insurance.
For example, a doctor and a diagnostics lab might agree to submit certain tests for payment, even though they were unnecessary or never performed.
A medical billing company’s willful agreement to participate in such a venture could create a False Claims Act liability and cost third-party insurers hundreds of thousands of dollars every time a healthcare provider engages in this type of fraud.
What resources are available to providers who require legal defense against charges of medical billing fraud?
You can contact your local and county bar associations or your medical provider network to obtain contact information for attorneys who are experienced in healthcare defense and related criminal law issues. Our healthcare law attorneys have experience defending providers in audits, investigations, and significant court proceedings.
What is the process for bringing a False Claims action?
Any private citizen may bring a False Claims Act claim against the government by filing a “qui tam” action. These lawsuits are routinely brought against medical billing companies by whistleblowers.
How is medical billing fraud reported?
Medical billing fraud may be reported by consumers, patients, or an employee of the medical billing company (referred to as a whistleblower). Any suspected fraud should be first reported to the company’s billing department, and then, if no action is taken, a report of the fraud should go up the corporate ladder to the facility’s Chief Financial Officer.
At that point, the fraud may be reported to the National Health Care Anti-Fraud Association, also known as NHCAA.
Participants covered by the Affordable Care Act can report suspected fraud by calling 1-800-318-5296, or they may report suspected Medicare Fraud to 1-800-632-4327. Medical billing fraud can also be reported to the Federation of State Medical Boards or to the fraud investigation bureau in the state where the suspected fraud is alleged to have occurred.
How can you, as a medical professional, avoid criminal and civil prosecution for healthcare fraud claims?
If you are facing an imminent risk of prosecution or incarceration for medical billing fraud, you should immediately contact our office for a free consultation with an experienced attorney specialized in healthcare fraud cases.
It is wise for all medical professionals to retain a legal adviser who can rectify inaccurate medical billing information and address all compliance issues that may arise within their healthcare organizations.
Above all, experienced legal counsel can assist you in protecting your confidential information, safeguard your patient and community perception, and ensure that your billing and reporting practices remain in consistent compliance with all of the legal requirements in the healthcare field.
Our healthcare law firm is comprised of experienced practitioners who maintain a high rate of success in defending our clients against healthcare-related claims.