General Surgery Coding Alert

Compliance:

Increase Your PHE Fraud Awareness With This OIG Report Overview

Published on Thu Aug 18, 2022

Feds Focus on PHE Tricksters and Recover Pay.

COVID-19-related fraud and abuse are the prime target of recent audit and enforcement action by the Department of Health and Human Services (HHS) Office of Inspector General (OIG). Let us walk you through some findings and enforcement actions that may be relevant to your general surgery practice.

Context: The OIG’s Semiannual Report to Congress identifies fraudulent and abusive behavior that impacts federal healthcare programs. The agency’s most recent report focuses on incidents and actions from Oct. 1, 2021 to March 31, 2022 that involve exploiting the COVID-19 public health emergency (PHE).

“OIG continues to prioritize work related to COVID-19 response and recovery. With 70 audits and evaluations underway …, and the issuance of fraud alerts, OIG continues to advance the four goals … with respect to HHS’s COVID-19 response and recovery,” notes Inspector General Christi A. Grimm in the report. “These goals are to: (1) protect people, (2) protect funds, (3) protect infrastructure, and (4) promote effectiveness of HHS programs, now and into the future,” she adds.

Statistics: During the report timeframe, OIG highlights great strides made through audits, enforcement, and recoveries while working in tandem with its partners at the Department of Justice (DOJ), State Medicaid Fraud Control Units, and other federal, state, and local law enforcement. Here’s a breakdown of the report numbers:

Audits: OIG released 47 audit reports and 14 evaluations. It expects to recover more than $1.14 billion from its audit work. The agency also questioned more than $1.6 billion in costs, too.
Investigative recoveries: OIG anticipated its investigative recoveries at $1.44 billion during the reporting period.
Criminal actions: The federal watchdog brought criminal actions against 320 individuals and entities.
Civil actions: OIG levied civil actions against 320 individuals and entities.
Exclusions: The feds excluded 1,043 individuals and entities from federal healthcare programs over the time period.

Check Out These Top Medicare Enforcement Cases

In the Semiannual Report, OIG both offers advice, insight, and cost-saving measures to HHS and its auxiliary agencies while also informing legislators of fraud and abuse in the federal healthcare spectrum. During the current period, big investigations of Medicare-related fraud included kickback and bribery schemes involving durable medical equipment (DME) and telemedicine.

Read on for a brief overview of the top cases.

Telemedicine: Flexibilities in place to address COVID and help Medicare beneficiaries were exploited by one telemedicine company and its partners for profit. Leonel Palatnik, co-owner of Panda Conservation Group LLC, along with other owners, engaged in an elaborate scheme with Michael Stein, owner of 1523 Holdings LLC, to usurp patients’ information and “arrang[e] for telemedicine providers to authorize genetic testing orders for Panda’s laboratories,” the report indicates. Palatnik was sentenced to 82 months in prison and required to pay “$61 million in restitution for his role in a $73 million conspiracy to defraud Medicare,” OIG says.

More: In another telemedicine scheme, Michael Nolan was sentenced to 78 months in Federal prison and Richard Epstein was sentenced to 63 months in Federal prison for their schemes to defraud Medicare and other federal health programs such as Department of Veterans Affairs. The pair “created and operated a telemedicine company through which they illegally bribed physicians to sign the orders regardless of medical necessity,” according to the report. They also targeted the elderly “to generate thousands of medically unnecessary physicians’ orders for DME and cancer genetic testing (CGx).”

“One of the things that the OIG has discovered is the amount of telehealth schemes that have leveraged the reach of telemarketing schemes in combination with certain unscrupulous physicians conducting sham remote visits to increase the size and scale of their operations because it’s just so easy,” says Terry Fletcher, BS, CPC, CCC, CEMC, SCP-CA, ACS-CA, CCS-P, CCS, CMSCS, CMCS, CMC, QMGC, QMCRC, owner of Terry Fletcher Consulting Inc. and consultant, auditor, educator, author, and podcaster at Code Cast, in Laguna Niguel, California.

DME: “A medical device company agreed to pay $16 million to resolve allegations that it violated the False Claims Act by paying kickbacks that caused the submission of false claims to the Medicare program,” according to the report. The company, Arthrex, paid surgeons an inducement to use and recommend its products under the guise of “royalty” payments, purportedly for the surgeons’ contributions to the products.

Resource: Review the report at https://oig.hhs.gov/reports-and-publications/archives/semiannual/2022/2022-spring-sar.pdf.