The owner and the medical director of a Kentucky pain clinic were recently sentenced for their respective roles in a scheme that defrauded Medicare, Medicaid, and commercial insurance companies of over $4 million for medically unnecessary urine drug testing.
The clinic’s medical director (Defendant 1) was sentenced to one year and six months in prison and ordered to pay $1,968,763.10 in restitution. The clinic’s owner, who was also a licensed chiropractor (Defendant 2), was sentenced to two years and six months in prison and ordered to pay $3,773,569.30 in restitution.
According to court documents and evidence presented at trial, the defendants orchestrated a scheme in which clinic staff billed for urine drug tests that were not medically necessary but were lucratively reimbursed by taxpayer-funded insurance providers like Medicare and Medicaid. They continued in their scheme even as their expensive drug testing machine malfunctioned because it was not properly maintained, which caused the machine to produce results that falsely suggested patients were testing positive for street drugs like ecstasy or heroin. Insurance proceeds from urine drug testing ended up comprising three-quarters of the clinic’s revenue.
“Healthcare providers who cause the submission of Medicare and Medicaid claims for medically unnecessary services pose a significant risk to these programs and the patients who rely on them,” said Special Agent in Charge Tamala E. Miles of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “These sentences exemplify how HHS-OIG works diligently with our law enforcement partners to hold accountable individuals who, to satisfy their own greed, exploit federal healthcare programs.”
Compliance Perspective
Issue
Ordering and billing for medications, tests, and procedures that are not medically necessary can be seen as fraudulent billing or submission of false claims. It is illegal to submit claims for payment to Medicare, Medicaid, and private insurance that you know or should know are false or fraudulent. 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 on determining if services for residents are necessary. Also review policies and procedures for preventing and reporting false claims and suspicious billing practices.
- Train appropriate staff on how to determine each resident’s level of care and if services provided are reasonable and necessary. Include information on how to report concerns and suspected violations, and make sure staff know that prompt reporting is mandatory. Document that the training occurred and place in each employee’s education file.
- Periodically audit to ensure that medical tests, procedures, and prescriptions meet the criteria for medical necessity and that they have been approved by the resident’s primary physician. Survey professional staff on their knowledge of what can be considered a medical necessity.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
