Four Michigan hospitalist companies (defendants) have agreed to pay a total of $4,384,618 to the United States and the State of Michigan to resolve allegations that they violated the False Claims Act by upcoding inpatient hospital services, allowing their doctors to bill for more services than they could possibly provide in one day, and billing for services not rendered, announced United States Attorney Dawn N. Ison. The State of Michigan will receive $606,483 of the settlement amount based on its share of alleged damages to the Medicaid program. The defendants are related companies that employ and provide hospitalists to Michigan hospitals. Hospitalists are doctors whose focus is the general medical care of hospitalized patients.
The settlement was announced on October 17, 2023, and resolves three sets of allegations. The first is that the defendants’ doctors regularly upcoded certain Current Procedural Terminology (CPT) codes typically used to report the most complex services relating to the evaluation and management of hospitalized patients. Upcoding is alleged fraudulent medical billing in which a claim is submitted for payment regarding a service that is more expensive than the service that was actually performed.
The second set of allegations is that the defendants allowed their hospitalists to regularly bill for impossible days within the State of Michigan. An impossible day occurs when a hospitalist purports to provide such a high volume of inpatient services or procedures in one day that there is no way the hospitalist reasonably could have performed them all.
The third set of allegations concern services and procedures purportedly rendered by the same provider, on the same day, and billed to the Medicare and Medicaid programs for beneficiaries located in Michigan and Indiana, which the government contends were not rendered to the Michigan-based beneficiaries.
“The False Claims Act is an important tool to deter and hold accountable those who submit fraudulent medical claims to the government,” said US Attorney Dawn N. Ison for the Eastern District of Michigan. “Any allegation that a provider is billing for services not actually provided will be vigorously investigated by our office.”
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.*
