A California doctor and his medical practice have agreed to pay $11,388,887 to resolve allegations that they violated the False Claims Act by submitting millions of dollars of false claims to Medicare, Medi-Cal, and the Oregon Medicaid program for medically unnecessary skin biopsies, spinal cord stimulation surgeries, and urine drug testing, US Attorney Phillip A. Talbert announced on July 11, 2023.
The settlement resolves allegations that, from 2016 to 2021, the doctor and his practice performed medically unnecessary skin biopsies to test patients for small fiber neuropathy. As part of the settlement, they acknowledged that the doctor created what he named an “Artificial Intelligence Team” of non-provider staff who were required to order at least 150 skin biopsies per week for patients without the consent of the patients’ treating providers at the medical center. Each biopsy order stated that the patient had identical symptoms of small fiber neuropathy, yet those symptoms were generally inconsistent with those patients’ actual symptoms. The doctor and his practice also acknowledged as part of this settlement that, if a patient refused a skin biopsy, the practice told the patient that they would reduce their opioid medication and instructed the patient’s provider to immediately taper the patient’s medication.
The settlement also resolves allegations that, from 2018 to 2021, the doctor and his practice performed medically unnecessary surgeries to implant spinal cord stimulators, which is an invasive surgery of last resort for the treatment of chronic pain. The doctor paid a psychiatrist to state to Medicare and Medicaid insurers that the psychiatrist had performed a necessary psychological evaluation on each patient prior to receiving the surgery and that the patient did not have any preexisting psychological or active substance abuse disorders that would adversely affect their response to the surgery. But the doctor and his practice knew that the psychiatrist did not perform in-person psychological evaluations of any patients and ignored indications that many patients suffered from psychological or substance use disorders before receiving spinal cord stimulation surgery.
Finally, the settlement resolves allegations that, from 2017 to 2021, the doctor and his practice performed medically unnecessary definitive urine drug testing, which identifies the concentration of specific medications, illicit substances, and metabolites in urine samples. Blanket orders of urine drug testing—identical orders for all patients without regard to each patient’s individualized medical necessity for the test—are not covered by Medicare. The doctor and his practice acknowledged that they made identical orders of urine drug tests for all patients to be tested every four months and ordered the maximum number of drug panels for each patient, using Healthcare Common Procedure Coding System Code G0483. The practice’s CEO stated to the doctor that performing urine drug tests on all their patients “[s]hould be a big money maker” and called it “Operation GO483!” When a new consultant for the practice told the doctor that it was “medically unnecessary but also wasteful” to order the maximum number of drug panels for each patient, the doctor directed an executive from the practice not to contact the consultant “because she might report us. For anything.”
The United States alleges that the doctor’s and his practice’s conduct relating to these three procedures violated the False Claims Act. The settlement amount of $11,388,887 is based on their ability to pay and includes proceeds from the doctor’s sale of a remotely operated underwater vehicle. As part of the settlement, the doctor has also agreed to a voluntary exclusion from federal healthcare programs for five years.
“Healthcare providers, including physicians, who perform medically unnecessary procedures to boost profits undermine the public’s trust in the healthcare system and exploit taxpayer-funded programs,” stated Special Agent in Charge Steven J. Ryan of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Working with our law enforcement partners, HHS-OIG is committed to protecting the health of patients and the integrity of federal healthcare programs serving them.”
Compliance Perspective
Issue
It is illegal to submit claims for payment to Medicare or Medicaid that you know or should know are false or fraudulent. Filing false claims may result in fines of up to three times the programs’ loss plus $11,000 per claim filed. Under the civil False Claims Act, each instance of an item or a service billed to Medicare or Medicaid counts as a claim, so fines can add up quickly. Facility staff should be knowledgeable in how to report suspicious billing practices. A nonretaliatory environment for reporting suspicious billing practices is mandatory for all facilities.
Discussion Points
- Review your policies and procedures for preventing and reporting a false claim and for conducting a Triple Check Process to verify accuracy of Medicare claims. Ensure that your policies are reviewed at least annually and updated when new information becomes available.
- Train all staff upon hire and at least annually on your compliance and ethics policies and procedures and on what can be considered a false claim. Provide training to appropriate staff on the Triple Check Process for ensuring accuracy of all Medicare billing and supporting documentation before claims are submitted. Document that these trainings occurred and file the signed document in each employee’s education file.
- Periodically perform audits to ensure all staff are aware of compliance and ethics concerns and understand their responsibility to report any potential compliance and ethics violations to their supervisor, the compliance and ethics officer, or via the anonymous hotline. Audit to ensure that the Triple Check Process is being followed each month before claims are submitted to Medicare, and that any identified irregularities are corrected.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
