Medicare Compliance & Reimbursement

Hint: Expect healthcare to remain a primary target in 2020.

Though the feds may be keen to streamline administrative burdens in the healthcare industry, that doesn’t mean they’re cutting back on enforcement. In fact, 2019 was a banner year for False Claims Act (FCA) recoveries — and evidence suggests the feds are ramping up for another record year in 2020.

Background: For the fiscal year (FY) 2019, which ended last September, the Department of Justice (DOJ) reported more than $3 billion in settlements and judgments from civil suits related to false claims against the U.S. government. Moreover, $2.6 billion of the total amount correlated specifically to cases in the healthcare industry that involved “drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians,” noted a DOJ brief. “This is the tenth consecutive year that the department’s civil healthcare fraud settlements and judgments have exceeded $2 billion.”

“The significant number of settlements and judgments obtained over the past year demonstrate the high priority this administration places on deterring fraud against the government and ensuring that citizens’ tax dollars are well spent,” says Jody Hunt, assistant Attorney General in a release.

See a Breakdown of the 2 Biggest Settlements

Opioid addiction continues to infiltrate every nook and corner of the healthcare industry, including fraud and abuse. Two of the biggest cases with epic recoveries were tied to opioid manufacturers. Review the investigations:

1. Reckitt Benckiser Group plc: The “global conglomerate,” also known as RB Group, resolved its civil and criminal liabilities for lying in its marketing and misleading providers about the risks of the “opioid addiction treatment drug Suboxone, which is a formulation of the opioid buprenorphine,” indicated a DOJ report.

RB Group paid a total of $1.4 billion to the feds, which included $500 million to resolve civil charges for promoting the drug to providers, who wrote prescriptions that “were unsafe, ineffective, and medically unnecessary,” said DOJ.

2. Insys Therapeutics: A combination of kickbacks, lies, and shoddy marketing for its drug, Subsys, landed the Arizona-based opioid manufacturer in FCA hot water. Insys’ actions were a hodgepodge of both civil and criminal actions that included inducing practitioners with bribes and kickbacks to write prescriptions that were medically unnecessary, hiring sham speakers for engagements, and engaging in racketeering, a DOJ brief noted.

After five qui tam lawsuits were brought against the organization, the feds got involved.

Culpable parties, including eight executives, were prosecuted, and Insys agreed to pay the government $195 million to resolve its FCA issues, suggests the release.

Feds Spotlight Healthcare Providers’ Fraud Woes

Though opioid-related problems were central to many of 2019’s top investigations, healthcare providers also tried to game the system — and the results weren’t pretty.

Review these major cases and recoveries:

EHR subsidies: In addition to settling FCA allegations for $63.5 million with the feds, Texas-headquartered pathology lab company Inform Diagnostics, formerly Miraca Life Sciences Inc., also resolved Anti-Kickback Statute (AKS) and Stark Law violations linked to improper financial arrangements and physician referrals. Interestingly, the company’s problems stemmed from its offering of free technology and EHR subsidies to referring providers, the DOJ said.

“Although regulations adopted by the Department of Health and Human Services (HHS) in 2006 included provisions that allowed laboratories to provide EHR donations to physicians under certain conditions, the United States alleged that the defendant violated those conditions,” reminded DOJ in the release on the case. “HHS withdrew those exemptions for laboratories in 2013.”

Shoddy health IT: Tampa, Florida-based EHR firm, Greenway Health LLC, forked over $57.25 million for FCA violations for illegal claims it submitted to the government while “misrepresenting the capabilities of its EHR product ‘Prime Suite’ and providing unlawful remuneration to users to induce them to recommend Prime Suite,” indicated a DOJ release.

The vendor falsely acquired 2014 Edition certifications for Prime Suite; however, the EHR did not actually “fully comply” with the federal certification requirements, said the DOJ. Greenway didn’t rectify its issue, but instead promoted Prime Suite and encouraged others to suggest it. In addition, after reporting using the faulty Prime Suite EHR, users “falsely attested that they were eligible for EHR incentive payments” — when they weren’t, said the report.

Upcoding: Encompass Health Corp. settled charges for upcoding inpatient rehabilitation facility (IRF) claims for $48 million; three whistle blowers will receive $12.4 million of the settlement amount.

Beginning in 2007, some Encompass IRFs falsely diagnosed patients with what they referred to as “disuse myopathy” when there was no clinical evidence for this diagnosis, and admitted patients who were ineligible for IRF services, related DOJ in a release.

Note: Review these cases and others that added to the feds $3 billion recovery in 2019 at www.justice.gov/opa/pr/justice-department-recovers-over-3-billion-false-claims-act-cases-fiscal-year-2019