President Obama’s 2011 Funding Request Provides for Expansion of the HEAT Program to Additional Cities
(October 4, 2010): As DOJ has recently noted in its own blog, over the last Fiscal Year, DOJ (including its 94 U.S. Attorneys’ Offices), HHS’ Office of Inspector General (HHS-OIG), and the Centers for Medicare and Medicaid Services (CMS), have been extraordinarily active in jointly pursuing health care providers allegedly engaging in fraud as part of the HEAT program. As DOJ notes, the mission of the HEAT program is:
- To marshal significant resources across government to prevent waste, fraud and abuse in the Medicare and Medicaid programs and crack down on the fraud perpetrators who are abusing the system and costing us all billions of dollars.
- To reduce skyrocketing health care costs and improve quality of care by ridding the system of perpetrators who are preying on Medicare and Medicaid beneficiaries.
- To highlight best practices by providers and public sector employees who are dedicated to ending waste, fraud and abuse in Medicare.
- To build upon existing partnerships that already exist between the two agencies, including our Medicare Fraud Strike Forces to reduce fraud and recover taxpayer dollars.
Together, DOJ, HHS-OIG and CMS have accomplished the following over the last Fiscal Year:
- Filed charges against more than 800 defendants.
- Obtained 583 criminal convictions.
- Opened 886 new civil health care fraud matters.
- Obtained 337 civil administrative actions against parties committing health care fraud.
Through these coordinated efforts, more than $2.5 billion was recovered. Importantly, these successes have not gone unnoticed. President Obama’s FY 2011 budget request includes an additional $60.2 million in funding for the HEAT program initiative.
Commentary: In light of the government’s continuing efforts, we strongly recommend that our clients review their current compliance efforts to ensure that they take into account any and all risk areas that have been identified or associated with their areas of practice. Providers should work to ensure that their operations and billing activitivies fully comply with applicable statutory and regulatory billing and coding requirements.
Should you have questions, please give us a call for a complimentary consultation. We can be reached at 1 (800) 475-1906.
(August 31, 2010):
I. Introduction — Regional Health Care Fraud Summits:
Last week, department heads of the U.S. Department of Justice (DOJ) and the Department of Health and Human Services (HHS), met in Los Angeles, CA and conducted the second of a planned series of “Regional Health Care Fraud Prevention Summits.” Following-up on a similar conference held in Miami, DOJ Attorney General Eric Holder HHS Secretary Kathleen Sebelius discussed a number of ongoing concerns and remedial steps that are being taken to identify, investigate and prosecute instances of Medicare fraud. In addition to these agency heads, participants learned of current and additional planned fraud enforcement initiatives from Federal and State law enforcement officials.
II. Health Care Fraud Issues Discussed at the Summit:
As Attorney General Holder discussed, the administration’s current enforcement actions were having a significant impact on health care fraud. In fact, additional funding has been allocated to expand the HEAT program to additional cities:
“. . . Last year brought an historic step forward in this fight. In May 2009, the Departments of Justice and Health and Human Services launched the Health Care Fraud Prevention and Enforcement Action Team, or “HEAT.” Through HEAT, we’ve fostered unprecedented collaboration between our agencies and our law enforcement partners. We’ve ensured that the fight against criminal and civil health care fraud is a Cabinet-level priority. And we’ve strengthened our capacity to fight health care fraud through the enhanced use of our joint Medicare Strike Forces.”
This approach is working.
In fact, HEAT’s impact has been recognized by President Obama, whose FY2011 budget request includes an additional $60 million to expand our network of Strike Forces to additional cities. With these new resources, and our continued commitment to collaboration, I have no doubt we’ll be able to extend HEAT’s record of achievement. And this record is extraordinary.
In just the last fiscal year, we’ve won or negotiated more than $1.6 billion in judgments and settlements, returned more than $2.5 billion to the Medicare Trust Fund, opened thousands of new criminal and civil health care fraud investigations, reached an all-time high in the number of health care fraud defendants charged, and stopped numerous large-scale fraud schemes in their tracks.
We can all be encouraged, in particular, by what’s been accomplished in L.A. Criminals we’ve brought to justice here – in the last year alone – include the owners of the City of Angels Hospital, who pleaded guilty to paying illegal kickbacks to homeless shelters as part of a scheme to defraud Medicare and Medi-Cal; a physician in Torrance who defrauded insurance companies by misrepresenting cosmetic procedures as “medically necessary”; an Orange County oncologist who pleaded guilty to fraudulently billing Medicare and other health insurance companies up to $1 million for cancer medications that weren’t provided; a Santa Ana doctor who pleaded guilty to health care fraud for giving AIDS and HIV patients diluted medications; and a ring of criminals who defrauded Medi-Cal out of more than $4.5 million by using unlicensed individuals to provide in-home care to scores of disabled patients, many of them children.“ (emphasis added).
As HHS Secretary Sebelius further noted:
“In March, we gave him some help when Congress passed and the president signed the Affordable Care Act — one of the strongest health care anti-fraud bills in American history. Under the new law we’ve begun to strengthen the screenings for health care providers who want to participate in Medicaid or Medicare. And I am proud to announce that CMS is issuing a final rule strengthening enrollment standards for suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).
This rule and others coming soon mean that only appropriately qualified suppliers will be enrolled in the program. The days when you could just hang a shingle over a desk and start submitting claims are over. No more power-driven wheelchairs for marathon runners. Under the new law, we’re also making it easier for law enforcement officials to see health care claims data from around the country in one place, combining all Medicare-paid claims into a single, searchable database. And we’re getting smarter about analyzing those claims in real time to flag potential scams. It is what credit card companies have been doing for decades: If 10 flat screen TV’s are suddenly charged to my card in one day, they know something’s not quite right. So they put a hold on payment and call me right away.
We should be able to take the same approach when one provider submits ten times as many claims for oxygen equipment as a similar operation just down the road. It’s about spotting fraud early before it escalates and the cost grows. As we step up our efforts to stamp out fraud, we’re holding ourselves accountable. The President has made a commitment to cut improper Medicare payments in half by 2012.”
While DOJ Attorney General Holder’s and HHS Secretary Sebelius’ presentations provided an overview of law enforcement’s current and future efforts, the comments of DOJ Assistant Attorney General for the Criminal Division, Lanny A. Breuer, were especially enlightening in terms of how providers are being identified and targeted for investigation. As Mr. Breuer discussed:
“In 2007, the Criminal Division of the Justice Department refocused our approach to investigating and prosecuting health care fraud cases. Our investigative approach is now data driven: put simply, our analysts and agents review Medicare billing data from across the country; identify patterns of unusual billing conduct; and then deploy our “Strike Force” teams of investigators and prosecutors to those hotspots to investigate, make arrests, and prosecute. And as criminals become more creative and sophisticated, we intend to use our most aggressive investigative techniques to be right at their heels. Whenever possible, we actively use undercover operations, court-authorized wiretaps and room bugs, and confidential informants to stop these schemes in their tracks.” (emphasis added).
As Mr. Breuer’s comments further confirm, health care providers are being identified based on their billing patterns. Through the use of data-mining, providers who coding and billing practices identify them as “outliers,” are finding themselves subjected to administrative, civil and even criminal investigation.
As counsel for a wide variety of health care providers around the country, we are especially concerned that honest, hard-working health care providers are finding themselves and their practices / clinics under investigation merely because: (1) their productivity is higher than that of their peers, or (2) their focus is specialized and often treats a higher percentage of seriously sick patients which ultimately requires a more detailed or comprehensive examination than one might normally find. Ultimately, through our representation of health care providers who have been targeted through data-mining, we believe that it is fundamentally unfair to investigate a provider merely on the basis of statistical data which can be manipulated in a thousand different ways in order to justify going after a specific provider or a type of practice.
On the administrative side, when data-mining is used as a targeting tool, providers are being audited and pursued by ZPICs, PSCs and RACs – each of is incentivized (either because they receive a percentage of any overpayment OR they are under contract with CMS to find overpayments and wrongful billings) to find fault with the provider.
IV. Continuing Health Care Fraud Concerns:
Under the current system, providers targeted through data-mining are likely to be saddled with extrapolated damages which can easily run into the millions of dollars, regardless of the fact that a large percentage of these providers are eventually exonerated (either fully or partially) when the case is heard by an Administrative Law Judge.
Health care providers subjected to an administrative audit (by a ZPIC, PSC or RAC), civil investigation (such as a review by the DOJ for possible False Claims Act liability), or criminal investigation (by DOJ or a State Medicaid Fraud Control Unit) should immediately contact your counsel. Extreme care should be taken when making statements to Federal or State investigators. Should the provider make a statement that is false or misleading, such comments could be used as the basis for bringing a separate cause of action. Your legal counsel may choose to handle all contacts with the government.
Robert W. Liles serves as Managing Partner at Liles Parker. Should you need assistance in connection with Medicare matters and cases. Should you have questions regarding these issues, give us a call for a free consultation. Call us at: 1 (800) 475-1906.
(July 12, 2010): A ZPIC’s use of extrapolation can be a surefire way of destroying a provider’s practice. We’ve known it for years and yet the government’s passion for statistical sampling only seems to be growing. This makes it essential for providers to involve experienced counsel as soon as possible after the audit has been conducted.
“Extrapolation” is the process of using statistical sampling in a review to calculate and project (extrapolate) alleged overpayments made in connection with Medicare claims. Basically, ZPICs seek out errors in an alleged “statistically relevant sample” of the provider’s Medicare claims and then calculate and apply the “error rate” to the entire universe of claims covering a given period of time. This long-standing practice allows ZPICs to grossly inflate the monetary demands on their audit targets while avoiding actually reviewing each of the Medicare claims in the universe for which they are seeking recoupment or offset.
The practice dates back twenty years to a decision by the Secretary of Health and Human Services (HHS) to authorize the use of statistical sampling in lieu of engaging in onerous claim-by-claim reviews. In Chaves County Home Health Services v. Sullivan, 931 F.2d 914 (D.C. Cir. 1991), the district court upheld extrapolation as being within the Secretary’s discretion.
In 2003, after years of protest, physicians groups and others succeeded in convincing Congress to place some limitations on the use of extrapolation. Under Section 935 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), before an auditor can employ extrapolation, there must be either a determination of a sustained or high level of payment error, or documentation that educational intervention has failed to correct the payment error. While this opens the door to challenging an extrapolation, we also work with a statistical expert to identify other errors made by the ZPIC when conducting an extrapolation.
Over the years, Liles Parker has worked with a number of the best statisticians in the country, challenging the extrapolation and having it invalidated at either the Qualified Independent Contractor (QIC) level or at hearing before an Administrative Law Judge (ALJ). If your practice or clinic is audited by a ZPIC, we strongly recommend that you engage experienced legal counsel to represent your interests during this complex process. The legal arguments utilized are driven by the facts in each case. As a result, you should retain counsel with extensive real-world knowledge of how to best challenge the use of statistical sampling by ZPICs and PSCs.
Should you have any questions regarding these issues, don’t hesitate to contact us. For a complementary consultation, you may call Robert W. Liles or one of our other attorneys at 1 (800) 475-1906.