Physician Fraud

Fraud by physicians and other providers, such as nurse practitioners and physician’s assistants, includes billing for medically unnecessary services, for services that were not actually provided, and for services that were rendered at a higher reimbursement level (upcoding). Obviously, submitting claims for these services violates the False Claims Act. In addition to those more straightforward fraud schemes, physicians may participate in financial relationships with pharmaceutical and device companies, and with hospitals, that violate the False Claims Act because they also violate the Antikickback Statute (AKS) or the Stark Law. Some of the most common fraud schemes engaged in by physicians are described below in more detail.

Billing For Medically Unnecessary Services

Physicians may bill for services that are medically unnecessary in order to increase their reimbursement. Under the Medicare and Medicaid programs, as well as other government health benefit programs, payment is limited, by statute to services that are “medically necessary” and “reasonable.” Billing for medically unnecessary services can range from billing for tests that are not needed to implanting devices in a patient that are not medically required. The cardiac stenting cases at hospitals in Maryland and elsewhere, for example, revealed that cardiologists across the country frequently implanted stents in blood vessels that did not actually need treatment. Exposing patients to unnecessary procedures is costly and wastes limited health care resources. It can also be harmful if patients are exposed to unnecessary radiation or to invasive procedures which may carry risks. To read more about the Maryland investigation into medically unnecessary stenting which led to a settlement with St. Joseph’s Medical Center, Towson, click here.

Billing for Services Not Rendered As Described

Physicians may also defraud federal health benefit programs by billing Medicare and Medicaid for services that were actually rendered at a higher reimbursement level. This fraud, known as upcoding, is extremely widespread. A physician might, for example, see a patient in his office for a simple medical issue, but bill the visit as a much more complicated one, by simply exaggerating the amount of time he or she spent with a patient or the complexity of the medical decisionmaking to gain a higher reimbursement. The physician may bill as if he saw the patient when, in fact, the patient was seen by a nurse practitioner or physician’s assistant. Or, a physician may commit fraud by coding a non-covered service as if it were a covered service, by simply using a different code. To read more about Healthcare Law Group founder Jamie Bennett’s work on an upcoding investigation an orthopedic group click here.

Supervision Fraud

Under the Medicare and Medicaid program many services performed in a physicians’ office are billed as “incident to” the services of the physician. Some of these services, such as infusion therapy for chemotherapy for example, require that a physician actually be present in the office when the service is being provided. If a physician is not present, or not providing the appropriate level of supervision, submitting claims for services as if they provided under the supervision of a physician, or “incident to” his services, is a violation of the False Claims Act.

Financial Relationships with Hospitals and Pharmaceutical and Device Companies

Providers may violate the False Claims Act by entering into financial relationships with hospitals, pharmaceutical companies and device manufacturers that do not comply with the Antikickback Statute or Stark Law. If a provider accepts payments from a pharmaceutical manufacturer or a device company that are intended to induce referrals and those payments do not fit within a AKS safe harbor, all claims submitted by that physician or hospital to Medicare or Medicaid are false as a matter of law. Financial relationships between hospitals and physicians may also implicate the AKS or violate the Stark Law. Hospitals often engage physicians to serve as medical directors, or in other consulting positions, for very good reasons. But agreements under which no services are actually rendered, or under which the payments are in excess of Fair Market Value, with the expectation that the physician will refer lucrative procedures to the hospital violate the False Claims Act. To read more about pharmaceutical fraud, click here. To read more about physician relationships with hospitals, click here.

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