Two California sisters were sentenced on October 2, 2023, to 15 months in prison and ordered to pay over $7.5 million in restitution for healthcare fraud, US Attorney Phillip A. Talbert announced.
According to court documents, between December 1, 2015, and December 1, 2020, the defendants ran a mobile phlebotomy company (Company 1) that provided phlebotomy and other medical collection services at patients’ homes and long-term care facilities in Sacramento and elsewhere. The defendants agreed to bill Medicare for services provided that were not reimbursable by Medicare. They also agreed to bill Medicare for overstated mileage that Company 1’s phlebotomists traveled. On average, the defendants caused false billing to Medicare of over 140 miles for each patient seen by Company 1. This caused a loss to Medicare of at least $7.5 million based on false billing.
In November 2020, due to “credible allegations of fraud” at Company 1, Medicare instituted a payment suspension under which Medicare ceased paying Company 1 for the services it continued to bill Medicare.
According to court documents, between July 1, 2021, and Dec. 31, 2021, the defendants agreed to circumvent the payment suspension by representing to Medicare that services provided to Medicare patients were done by another company (Company 2), when they were in fact being provided by Company 1 through its contractors and employees from Company 1’s offices. Through Company 2, the defendants agreed to bill Medicare for a non-reimbursable service, misrepresenting that it was for another reimbursable service and overstating the mileage traveled by phlebotomists in order to receive additional money from Medicare. For example, in September 2021, Company 2 billed Medicare for 124.6 miles of travel by a phlebotomist when in fact the phlebotomist travelled 1.4 miles. The defendants caused a loss to Medicare of at least $50,000 based on false billing by Company 2.
The Federal Bureau of Investigation (FBI) and the US Department of Health and Human Services Office of Inspector General (HHS-OIG) investigated this case.
Compliance Perspective
Issue
Providers must ensure that the claims they submit to Medicare and Medicaid are true and accurate. One of the most important steps a provider can take is to have a robust internal audit program that monitors and reviews claims. If a provider identifies billing mistakes in the course of those audits, the provider must repay overpayments to Medicare and Medicaid within 60 days to avoid False Claims Act liability. Providers also can disclose billing errors to the OIG through the OIG Self-Disclosure Protocol.
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 Part A billing and supporting documentation before claims are submitted. Members of the compliance and ethics committee should periodically receive additional training on compliance and ethics issues in healthcare. 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. At least annually, reassess the effectiveness of your compliance and ethics program and address any identified areas of weakness immediately.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
