The United States has filed a complaint under the False Claims Act against a medical practice and its founder and majority owner, a physician, for allegedly causing the submission of false claims to Medicare for overbilled and medically unnecessary wound care services. The practice is one of the nation’s largest specialty wound care providers and contracts with hundreds of nursing homes and skilled nursing facilities across the country to provide wound care services at patients’ bedsides.
According to the complaint, the defendants knowingly engaged in a nationwide scheme to falsely bill Medicare for surgical debridement procedures to maximize revenue. Debridement is a procedure to remove dead or unhealthy tissue from a wound to promote healing. It can be performed using both surgical and nonsurgical methods.
The complaint alleges that the defendants pursued their fraudulent scheme in three primary ways. First, the owner developed proprietary Electronic Medical Record (EMR) software that was programmed to bill debridements as surgical procedures, even when they were not. Second, the owner hired physicians without wound care expertise and trained them in ways that omitted relevant Medicare payment rules while intentionally conflating the definitions of surgical and nonsurgical debridement procedures. Third, the owner set corporate debridement targets based solely on revenue goals and pressured its physicians to meet those targets. As a result, claims were submitted for surgical debridement services that were not medically necessary, and billing codes for more complex procedures were used (a practice known as “upcoding”).
The complaint also alleges that the defendants programmed the proprietary EMR software to incorrectly apply the Modifier 25 billing code, which allowed Medicare to be charged for exams that were not separately billable from surgical debridement procedures performed on the same day. Since surgical debridements are billed as global surgical packages, which include payment for an examination, evaluation, and management (E&M) services, those services are only payable on the same day if a significant service is performed that is separate from the surgical procedure, indicated by Modifier 25. According to the complaint, the software automatically added Modifier 25 to E&M claims, regardless of whether the modifier was appropriate, leading to the submission of claims for E&M services that were not payable.
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.
- 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, Inc. for informational purposes only and is not intended to provide legal advice.*
