Medicare Compliance & Reimbursement

Treating a provider number lightly is a dangerous mistake.

Traffic in Medicare provider numbers has landed a Los Angeles physician in serious hot water with the feds - and other physicians may be tossed into the cauldron soon.

Dr. Lakshmi Nadgir Aug. 18 plead guilty to five counts of health care fraud charges that center on billing Medicare for services she never provided, according to U.S. Attorney Debra Yang.

Nadgir admitted to submitting a whopping $5.5 million in bogus claims to the Medicare program, from which she received $2.2 million in reimbursement. From 1997 through May 2002, Nadgir "orchestrated a fraud scheme" that involved hiring a slew of medical staff to run her medical clinic, Yang explains.

"In addition to the salary provided to these workers for their legitimate work, Nadgir secretly paid cash to them to bring patients with Medicare beneficiary cards into her medical office for purported treatment." Nadgir then billed the program for many services that she didn't perform.

In May 2002, the Medical Board of California revoked Nadgir's medical license because she made a false statement on her application for hospital privileges, Yang reports. That's when the next phase of the misdeeds began. Nadgir made a deal with another physician (an "unindicted co-schemer" according to Yang) to obtain patients and run the practice under the second doctor's provider number. In exchange, Nadgir collected 25 percent of the practice's medical billings - a scheme that resulted in another $1.6 million in bogus reimbursement claims. She later made a similar deal with yet another physician.

Nadgir faces up to 50 years in prison for her crimes. The feds say their investigation of the matter is ongoing.

Lesson Learned: Physicians should be careful about who they enter into business arrangements with and how their provider number is being used - failure to do so can lead to big trouble with government fraud fighters.