On October 23, a New York doctor was charged in federal court in Boston for allegedly receiving kickbacks in exchange for ordering medically unnecessary brain scans. He has agreed to plead guilty to one count of conspiracy to commit healthcare fraud.
According to the charging documents, the defendant, an internist in Long Island, NY, was a licensed medical doctor in the State of New York for approximately 47 years. It is alleged that from approximately June 2013 through December 2019, he conspired with others, including a principal for a mobile medical diagnostics company that performed transcranial doppler (TCD) scans, and a salesperson for the company, to order hundreds of medically unnecessary TCD scans in exchange for kickbacks.
The defendant and his co-conspirators allegedly used false diagnoses to order the unnecessary brain scans. A co-conspirator would then submit claims to Medicare and other insurance companies, including private insurance companies, on behalf of the medical diagnostic company for payment. In exchange, the defendant was paid cash kickbacks of approximately $100 per test. According to the charging documents, the scheme resulted in fraudulent bills of approximately $891,978 to Medicare and private insurance companies.
The charge of conspiracy to commit healthcare fraud carries a potential sentence of up to 10 years in prison, three years of supervised release, and a fine of up to $250,000. Sentences are determined by a federal district court judge based on the US Sentencing Guidelines and relevant statutes.
Compliance Perspective
Issue
All medical services performed for residents must be medically necessary to bill Medicare, Medicaid, or private insurance companies. A service is considered medically necessary if its results are essential for diagnosing or treating an illness, injury, condition, disease, or its symptoms. Submitting claims for unnecessary services may violate the False Claims Act, resulting in fines, criminal charges, and other sanctions. Under federal and state anti-kickback statutes, it is illegal to offer, pay, solicit, or receive anything of value to induce or reward referrals for federal or state healthcare program business. While some industries permit referral rewards, such practices are criminal in healthcare. This prohibition applies to both the individuals providing kickbacks and those accepting them. Kickbacks can take various forms, including bribes or rebates, and may be given in cash or other benefits. Failing to report a kickback promptly can lead to significant legal repercussions, including lawsuits, fines, and additional sanctions.
Discussion Points
- Review and update your policies and procedures for medical testing services, including billing practices and protocols for preventing and reporting false claims and anti-kickback statute violations.
- Train appropriate staff on how to determine if services each resident is receiving are reasonable and necessary. Train all staff on the Anti-Kickback Statute and what can be considered a kickback. Ensure appropriate staff monitor for potential false claims related to unnecessary or inappropriate services that are unsupported by documentation. Include information on how to report concerns and suspected violations, and that prompt reporting is mandatory. Document all training sessions and maintain records in individual employee files.
- Conduct audits to ensure staff understand procedures for reporting suspected unnecessary services or illegal kickbacks. Emphasize that reporting is essential regardless of whether the actions were intentional or unintentional.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*
