Massive Medical Fraud Take Down by DoJ – What Physicians Need to Know

by | Last updated Jan 24, 2024 | Published on Oct 5, 2016 | Medical Billing

Massive Medical Fraud
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Fraudulent billing to Medicare, Medicaid or both for treatments that were never provided is a serious crime, costing the federal government millions of dollars. Taking stern action against offenders, the DoJ has charged providers in several cases of medical billing fraud.

According to a Revenue Intelligence report, on September 7, the Justice Department announced that the U.S. filed a False Claims Act case against providers at a Tennessee-based healthcare system which submitted false claims to Medicaid and Medicare for skilled nursing home services that were either never performed or were “grossly substandard.”

In June this year, the DoJ charged hundreds of individuals across the U.S. with committing Medicare fraud worth millions of dollars, describing this as the largest take down in history both in terms of the number of people charged and the loss amount. CNN reported that the crimes included conspiracy to commit health care fraud, violations of anti-kickback statutes, money laundering, and aggravated identity theft.

Physicians need to understand how to identify “red flags” that could lead to potential allegations of medical billing fraud. The five most important federal fraud and abuse laws that apply to physicians are the False Claims Act (FCA), the Anti-Kickback Statute (AKS), the Physician Self-Referral Law (Stark law), the Exclusion Authorities, and the Civil Monetary Penalties Law (CMPL).

  • Under the FCA, physicians can be punished for submitting claims for payment to Medicare or Medicaid that they know or should know are false or fraudulent.
  • The Anti-Kickback Statute makes it illegal to pay for referrals in federal health programs. This prohibition applies also to patients so that physicians are required to collect copays from patients in Medicare and Medicaid programs require patients to pay that money. However, it is legal to provide services for those who are uninsured or cannot afford to pay.
  • Under the Physician Self-Referral Law or Stark law, physicians are prohibited from referring patients to receive “designated health services” payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies. Examples of designated health services include clinical lab services, physical and occupational therapy services, and DME and supplies.
  • The Exclusion Statute excludes individuals and entities convicted of different types of criminal offenses from participation in all Federal health care programs. Besides many others, these offenses include Medicare or Medicaid fraud and patient abuse and neglect.
  • Under the CMPL, the OIG may impose penalties for different offenses such as presenting fraudulent claims, violating AKS, providing false or misleading information, violating Medicare assignment provisions or the Medicare physician agreement, and more.

In reality, deliberate medical fraud is committed only by a small proportion of unscrupulous providers. Most physicians strive to ensure ethical work practices, provide high-quality medical care, and submit accurate and clean claims for payment. The problem is that many physicians unknowingly engage in practices that could subject them to scrutiny and lead to legal action. Partnering with a reliable medical billing company can help ensure proper medical coding and billing practices to avoid such issues. Documentation experts help providers to ensure coding and billing compliance and adhere to the requirements of CMS and commercial payers. With comprehensive medical records review and regular audits, professional medical billing and coding companies ensure that medical practitioners meet their goals of providing high quality care while maximizing reimbursement and avoiding fraudulent practices.

Julie Clements

Julie Clements, OSI’s Vice President of Operations, brings a diverse background in healthcare staffing and a robust six-year tenure as the Director of Sales and Marketing at a prestigious 4-star resort.

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