Tag Archives: Medicare Fraud

Insulating your healthcare practice from fraud takedowns

Takedowns are a practice used by federal prosecutors to send a deterrent message to certain industries where the incidence of fraud and criminal activity may be widespread. When federal law enforcement conducts takedowns, they work with law enforcement nationwide and execute the takedowns at the same time. When these takedowns occur simultaneously, there is little warning before an investigator contacts individuals suspected or reported to be engaged in illegal conduct. The healthcare industry is a focus of federal investigators following tips on Medicare fraud. From over billing to treating non-existent or non-qualified patients, Medicare fraud is a compelling problem and task forces are organized and specialized in investigating claims and preparing for nationwide takedowns. Some in the industry predict, based on an increase in enforcement activity, that the Chicago area could be a target for takedowns during the summer of 2017.

The opportunity to insulate your healthcare practice from civil and criminal liability

Awareness of the focus on healthcare fraud leads to an opportunity for healthcare administrators and professionals to review their practices, the trends in fraud, and make any changes to the organization to prevent being targeted in enforcement investigations.

The resources used in using healthcare lawyers to perform health-care fraud and compliance audits are well allocated when the alternative significant civil and criminal fines and penalties could be assessed against your healthcare organization if an investigation leads to adverse findings.

Your healthcare attorney can audit your healthcare systems and help you maintain compliance with federal laws and regulations. Everyone in your administration should be aware of compliance and anti-fraud measures. Being able to demonstrate this preventative practice may be essential in the event of an investigation.

What happens if an investigator visits you and informs you of inquiry

How your hospital or medical practice responds to an initial inquiry of an investigator is imperative. Ahead of time, you should know a healthcare attorney you can contact immediately and you should be aware of how they will advise and represent you if necessary. Even if you believe that your practice is compliant and not in any risk, it is not a good idea to represent yourself without a lawyer when visiting with and responding to investigators.

Your attorney may help satisfy the investigators concerns uniquely, where they know what kind of questions they may ask and how to best communicate your compliance and anti-fraud efforts.

If an investigator contacts you it is important to be polite and offer to assist and comply with their requests. You may ask them for contact information you will give to your attorney to also assist. You do not need to answer any of their questions without your lawyer present. A professional investigator will be accustomed to the request for legal counsel and you should not worry about that looking like any suggestion or admission of wrongdoing or guilt.

About us: Michael V. Favia & Associates, P.C. is a health law and litigation firm in Chicago representing individuals, healthcare professionals and organizations with civil legal matters as well as professional licensing and regulation.

Chicago health law and litigation attorney Michael V. Favia and his associates in several locations and disciplines, advise and represent private individuals as well as healthcare professionals in all types of litigation and administrative matters involving licensing and regulatory agencies.

Michael V. Favia and Associates, P.C. represents individual physicians and health care organizations in the Chicago area with a variety of legal matters. With offices conveniently located in the Chicago Loop, Northwest side and suburban meeting locations, you can schedule a discrete meeting with an attorney at your convenience and discretion. Michael V. Favia & Associates is available at (773) 631-4580. Please visit www.favialawfirm.com and feel free to “Like” the firm on Facebook and “Follow” the firm on Twitter. You can also review endorsements and recommendations for Michael V. Favia on his Avvo.com profile and on LinkedIn.

 

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The Illinois Department of Financial and Professional Responsibility investigates cases that can lead to discipline.

Medicare fraud bust in Illinois leads to 6 and ½ year sentence

The biggest problem facing Medicare fraud might be the arrogance of people who get away with bad acts for too long. Meanwhile, with the cooperation of law enforcement agencies using technology and skill, fraud schemes are frequently shut down and bad actors are prosecuted. In some cases, someone on the inside is the whistleblower who notifies authorities. In this case, the nurses who challenged fraudulent behavior were treated poorly and terminated. Several former employees filed whistleblower lawsuits leading to the investigation, arrest and prosecutions in this major Medicare fraud case.

The $90 million Medicare fraud scheme

In this case, Seth Gillman, Chicago businessman and mastermind of this fraud scheme exploited terminally ill patients in Illinois in the $20 million Medicare fraud. Gillman was convicted and sentenced to 6 ½ years in federal prison.

The Chicago Tribune reports, “By paying kickbacks to nursing homes and giving bonuses to employees who took part in the fraud, Gillman built his Passages Hospice LLC into the largest such company in Illinois, serving terminally ill patients in 89 countries and billing Medicare more than $90 million from 2008-2012, government records show.[i]

Unfortunately, Passages Hospice did not provide the care consistent with what Medicare paid in claims submitted for patient services. Meanwhile, Gillman lived a lavish lifestyle, excessive even for a licensed attorney and nursing home administrator. To the U.S. District Court Judge, Gillman stated, “I betrayed the trust of Medicare and I besmirched the integrity of hospice all together…I was stupid and I was wrong.[ii]

Investigation and discovery of Medicare fraud schemes

Why would anyone want to be the whistleblower? When an individual with “clean hands” contacts and works with the investigation of Medicare fraud schemes, they may be removing themselves from the eye of the investigators. Since many of the common Medicare fraud schemes are complex, there are multiple people involved. Therefore, investigators might be looking at everyone involved in a healthcare operation, when there is a suggestion of wrongdoing. It may be easier to report the fraud than be accused of being a part of it or helping with a cover-up.

Another reason people report fraud is they may be able to recover a percentage of fines assessed and paid in connection with the Medicare fraud prosecution.  This is called Qui Tam and our article on point explains the process. See Dr. Whistleblower: Reporting $10 million in a Medicare billing fraud scheme, could share in recovery.

If you or another suspect there may be wrongdoing occurring in a health-related practice or care facility, it is a good idea to talk to a health law and litigation lawyer to figure out where you may stand in the event there is a current or pending investigation. You might also be a proper person to file a whistleblower lawsuit. You might also be an individual responsible for others below you who you believe may be engaged in wrongdoing. Likewise, it is imperative to secure experienced legal counsel.

About us: Michael V. Favia & Associates, P.C. is a health law and litigation firm in Chicago representing individuals, healthcare professionals and organizations with civil legal matters as well as professional licensing and regulation.

Chicago health law and litigation attorney Michael V. Favia and his associates in several locations and disciplines, advise and represent private individuals as well as healthcare professionals in all types of litigation and administrative matters involving licensing and regulatory agencies.

Michael V. Favia and Associates, P.C. represents individual physicians and health care organizations in the Chicago area with a variety of legal matters. With offices conveniently located in the Chicago Loop, Northwest side and suburban meeting locations, you can schedule a discrete meeting with an attorney at your convenience and discretion. Michael V. Favia & Associates is available at (773) 631-4580. Please visit www.favialawfirm.com and feel free to “Like” the firm on Facebook and “Follow” the firm on Twitter. You can also review endorsements and recommendations for Michael V. Favia on his Avvo.com profile and on LinkedIn.

 

[i] Chicago Tribune, Hospice CEO gets 6 ½ years for fraud scheme, by David Jackson and Gary Marx, Mar. 7, 2017.

[ii] See HNi above.

Experience matters: Hiring the best healthcare licensing lawyer

How much did it cost you to become a licensed and practicing healthcare professional? While doing the math, in addition to the hard cost of tuition for many years of school, remember to include the opportunity cost of all else you may have done to earn money while you dedicated your life and career path to healthcare practice. In addition to money, the time and other resources invested in a healthcare practice are significant. It is safe to say that healthcare professionals have too much to lose to gamble with a licensing dispute or discipline.

There appears to be an increase in the coverage of healthcare discipline and regulation.

Doctors, dentists and nurses all understand that frivolous complaints are filed from time to time and the regulatory agency charged with oversight has a duty to follow up on any and all reported incidents. Even if you assume you are in the clear and can handle everything on your own, it is possible to stumble on an unknown regulatory or legal issue and it is never good to be caught off guard when defending your practice.

There are incentives for people to report the alleged misconduct of others, particularly in healthcare practice. Consider the amount of coverage given to cases of Medicare billing fraud. People who report Medicare fraud can receive compensation for being the whistleblower. A less than ethical individual may target practitioners with high volume practices if they think there is a chance an error may lie somewhere in the billing files, and they might get lucky.

When winning and defending your practice matters, so does experience.

The increase in demand for healthcare professionals leads to an increase in all the industries supporting healthcare practice, including the legal industry. As increased manpower and technology allows for more opportunities to regulate and oversee healthcare practices, there is an increased need for skilled and experienced attorneys to advise and represent licensed healthcare practitioners.

Chicago healthcare law and licensing attorney, Michael V. Favia humbly finds himself among the best healthcare attorneys in the State of Illinois. Favia’s career has afforded him the opportunity to work for the State as well as in private practice, on both sides of the fence. As a former chief prosecutor for the IDFPR, then the Illinois Department of Professional Regulation, Favia is intimately familiar with the outlook and position of the Department, when it investigates and makes discretionary decisions whether to proceed with the investigations that can lead to discipline and serious consequences.

Read Michael V. Favia’s LinkedIn profile for a full list of career accolades and experience.

Working in private practice, counseling and representing Illinois-licensed healthcare practitioners, defending their licenses and careers, Favia has also had the opportunity to share experience and wisdom with other attorneys learning healthcare law. Only through many years of experience in the trenches does a professional develop the right intuition and knowledge base to be the senior practitioner to mentor others. In building his career, Favia has worked with other leading healthcare lawyers, associating and collaborating on cases; he is the one they turn to when they need additional counsel.

About us: Michael V. Favia & Associates, P.C. is a health law and litigation firm in Chicago representing individuals, healthcare professionals and organizations with civil legal matters as well as professional licensing and regulation.

Chicago health law and litigation attorney Michael V. Favia and his associates in several locations and disciplines, advise and represent private individuals as well as healthcare professionals in all types of litigation and administrative matters involving licensing and regulatory agencies.

Michael V. Favia and Associates, P.C. represents individual physicians and health care organizations in the Chicago area with a variety of legal matters. With offices conveniently located in the Chicago Loop, Northwest side and suburban meeting locations, you can schedule a discrete meeting with an attorney at your convenience and discretion. Michael V. Favia & Associates is available at (773) 631-4580. Please visit www.favialawfirm.com and feel free to “Like” the firm on Facebook and “Follow” the firm on Twitter. You can also review endorsements and recommendations for Michael V. Favia on his Avvo.com profile and on LinkedIn.

 

Rock Island, Illinois home health supplier faces vendor fraud charges for submitting false billing invoices.

How you can stop home health fraud, Whistleblowers may share in recovery

Home health companies are increasingly popular among families who want their loved one to receive care in their own home or another residential location with others receiving care. Home health options are appealing to those who do not favor the traditional nursing home facilities and find them to seem institutional. One advantage of a traditional nursing home setting may be the close monitoring and control of the healthcare professionals who work with residents. Too often the news reports include stories of home health operations failing their residents and failing the system. There are cases of negligent care and abuse of home health residents as well as cases of fraud and financial deceit. When individuals are tempted by the chance to get a little extra from the government, that little extra tends to become more. Many caught in home health fraud schemes are able to take significant amounts of money before they are stopped. How would you know your loved one was cared for by individuals engaging in home health fraud? What questions about the quality of care would keep you up at night?

Is there a way to know whether home health care givers are honest and trustworthy?

When choosing in home healthcare options, it is important to do your research and conduct due diligence by investigating the backgrounds of the individuals who may be caring for you or your loved one. For less than 100 dollars you can obtain background investigative reports for home health professionals. Professional licenses can be verified and in the process, any reports of discipline of that professional may be available. If you are not comfortable or particularly skilled at online investigation, our law firm can assist you or recommend another who may be better able to help you in the vetting process. Unfortunately, it may be difficult to tell whether the individual of any character is engaged in or connected to a fraudulent operation.

Medicare billing fraud cases are reported frequently and investigations lead to convictions.

When people picture Medicare fraud, the image may be a dark basement with leaking pipes and a crooked looking person working at a desk with a sinister look and laugh. In reality, the setting may be right outside your window or down the street. The suburban landscape is ripe with reports of home health fraud. In Schaumburg, Illinois, a 47 year-old woman was convicted on 21 counts of fraud and making false statements; and sentenced to 72 months, with an order to pay 15.6 million dollars in restitution. “Home-health fraud has become a significant problem nationally and particularly in the Chicago area,” Assistant U.S. Attorney Stephen Chahn Lee argued in the government’s sentencing memorandum. “Such fraud cannot happen without people like the defendant, who abuse Medicare’s rules and abuse the trust placed in them by Medicare and their patients.[i]

Examples of Medicare billing fraud.

In this recent fraud case in Schaumburg, the woman leading the fraud directed her employees to conduct in-home visits for patients who did not need care, people who were not home-bound and quite able and otherwise healthy. When the employees billed Medicare for the visits, they billed for the more expensive and complicated levels of care, even though no care was needed or often performed. The inflated billing and billing for services not needed is an easy fraud to hide if nobody is looking.

Billing Medicare for services not actually needed or performed is such big business that some fraud operations offer kickbacks to individuals who recruit and sign up new home health patients, regardless of their health condition, so long as they qualify for Medicare services and a bill for something can be generated.

How do the frauds become exposed, investigated and stopped if nobody is looking?

Whistleblowers lead to investigations and convictions for home health fraud where Medicare is duped into paying for services never needed or rendered. If one of the nurses working for the woman leading up the Schaumburg fraud scheme was the whistleblower and reported the fraud to authorities, that person would be paid a part of the restitution ordered, in this case that would be a cut of the more than 15-million-dollar restitution.

If you or someone you know suspects others are profiting from home health fraud, you can contact our law firm by dialing 773-631-4580 to learn about your rights under the law and whether you may be able to stop a home health operation engaging in fraudulent practices.

Michael V. Favia & Associates, P.C. is a health law and litigation firm in Chicago representing individuals, healthcare professionals and organizations with civil legal matters as well as professional licensing and regulation. We frequently publish information and resources to help healthcare professionals and individual consumers more knowledgeable about news and occurrences in health.

Chicago health law and litigation attorney Michael V. Favia and his associates in several locations and disciplines, advise and represent private individuals as well as healthcare professionals in all types of litigation and administrative matters involving licensing and regulatory agencies.

Michael V. Favia and Associates, P.C. represents individual physicians and health care organizations in the Chicago area with a variety of legal matters. With offices conveniently located in the Chicago Loop, Northwest side and suburban meeting locations, you can schedule a discrete meeting with an attorney at your convenience and discretion. For more about Michael V. Favia & Associates, call us at (773) 631-4580, please visit www.favialawfirm.com and feel free to “Like” the firm on Facebook and “Follow” the firm on Twitter. You can also review endorsements and recommendations for Michael V. Favia on his Avvo.com profile and on LinkedIn.

 

[i] eNews Park Forest, Head of Schaumburg Home Health Company Sentenced to Six Years for Scheming to Fraudulently Bill Medicare for Unnecessary Care, Chicago ENEWSPF, July 26, 2016.

Dr. Whistleblower: Reporting $10 million in a Medicare billing fraud scheme, could share in recovery

The Illinois Department of Financial and Professional Responsibility investigates cases that can lead to discipline.

The Illinois Department of Financial and Professional Responsibility investigates cases that can lead to discipline.

Former CEO of a physician-hospital practice venture, Robert Dannenhoffer, MD, filed a lawsuit in federal court alleging his former employer terminated the doctor’s position in retaliation for Dannenhoffer reporting a $10 million Medicare fraud scheme. Dr. Dannenhoffer led investigators to discover a fraudulent payment scheme, by which doctors were being compensated more money in exchange for prescribing certain medical procedures and prescription medications to Medicare patients, regardless of whether they were necessary, according to reports. The lawsuit alleges violations of the False Claims Act and the Stark Act, a federal patient referral law. As a whistleblower under federal law, Dr. Dannenhoffer seeks and may be entitled to the reinstatement of his position, back pay, punitive damages and attorney’s fees.[i]

Medicare Fraud is often reported and exposed by whistleblowers who may share in court awards.

Medicare fraud costs U.S. taxpayers significant money every year when fraudulent reimbursements and overpayments are claimed and paid for treatments never provided to patients, suppliers billing for equipment never obtained and even the use of false information to mislead an individual to joining a Medicare plan. Doctors in physician-hospital practice ventures, like Dr. Dannenhoffer, may be liable for Medicare fraud occurring in their practice, even despite their potential lack of personal knowledge. By reporting the suspected fraudulent behavior as a whistleblower, a physician like Dr. Dannenhoffer not only may avoid liability for fraud, they may recover a percentage of any amounts for which the case settles or for which a judge rules in favor of the government.

Dr. Dannenhoffer is the whistleblower in this Medicare fraud scheme in which over $10 million worth of fraudulent and inflated Medicare payments are identified. The doctor claims that after he filed his federal whistleblower lawsuit, he was fired as CEO of the major healthcare provider where he worked and was blacklisted in the medical community.

The doctor claims his healthcare company violated the False Claims Act and the Stark Act.

False Claims Act violations are not taken lightly. In this case, Halifax Health settled for $85M.

False Claims Act violations are not taken lightly. In this case, Halifax Health settled for $85M.

Federal law codified in the False Claims Act (FCA)[ii] imposes liability on individuals and organizations, often federal contractors, who defraud government programs such as Medicare. The FCA, imposes damages and penalties for any individual who knowingly submits or causes another to submit a false claim to the government, or knowingly makes a false record or statement to obtain a false claim paid by the government. The current amounts of penalties can amount to three times the dollar amount of the claim plus fines of $5,500 – $11,000 per claim.

An individual reporting Medicare fraud may also file an intervening lawsuit on behalf of the government, a qui tam action, and the whistleblower’s identity is kept under seal. The whistleblower may share in the financial settlement or recovery, between 15 and 25 percent of the amount. The law works this way to encourage more individuals to step forward and report Medicare fraud.

The Stark Law[iii] is a section of the Social Security Act and is known as the physician self-referral law. Physicians may not make referrals and receive payment Designated Health Services[iv] payable by Medicare to an individual or group where the physician or their immediate family member are an owner or have an ownership interest. In this case, Dr. Dannenhoffer was not allowed to make referrals to the organized medical service venture in which he was a partner with interest.

Being a whistleblower has its costs, but it is better to discover and report Medicare violations, than to worry about civil and criminal liability for participating or failing to report fraud.

The laws involving fraud are frequently tightening and are stricter in the enforcement of the False Claims Act.

The laws involving fraud are frequently tightening and are stricter in the enforcement of the False Claims Act.

Michael V. Favia and Associates can help physicians who learn or receive notice of Medicare fraud activities. With many local, state and federal agencies working together to investigate and stop health care billing fraud, reporting a violation as a whistleblower may be the only option an individual has when they otherwise could face civil and criminal liability and penalties, including imprisonment. Of course, Favia and his team can also offer physicians a review of their billing procedures and protocols to assess risk and exposure to potential fraud. When your chain is only as strong as its weakest link, it makes sense to regularly examine that chain.

Chicago health law, litigation and professional licensing attorney, Michael V. Favia and the associate attorneys of Michael V. Favia and Associates, P.C. represent individual physicians and health care organizations in the Chicago area with a variety of legal matters. With offices conveniently located in the Chicago Loop, Northwest side and suburban meeting locations, you can schedule a discrete meeting with an attorney at your convenience and discretion. For more about Michael V. Favia & Associates, please visit www.favialawfirm.com and feel free to “Like” the firm on Facebook and “Follow” the firm on Twitter. You can also review endorsements and recommendations for Michael V. Favia on his Avvo.com profile and on LinkedIn.

[i] Beckers Hospital Review, Ex-CEO claims retaliation for blowing the whistle on $10M in false Medicare charges, by Ayla Ellison, Jan. 27, 2016.

[ii] The False Claims Act 31 U.S.C. §§ 3729–3733

[iii] The Stark Act 42 U.S.C. § 1395nn

[iv] Designated Health Services under the Stark Law

Be proactive and avoid exposure to home healthcare fraud investigations and convictions

Kickbacks to employees and marketers for patient referrals is a common problem and area of abuse in home healthcare. There are many more activities the experts in law enforcement study in an effort to isolate fraud.

Kickbacks to employees and marketers for patient referrals is a common problem and area of abuse in home healthcare. There are many more activities the experts in law enforcement study in an effort to isolate fraud.

The rising cost of healthcare and nursing facilities caused an increase in the popularity of home healthcare facilities, where disabled and elderly patients can receive appropriate levels of care. While many people benefit from the home healthcare option, many may also find ways to defraud the system. Billions of dollars a year lost to home healthcare fraud lead to increased healthcare costs and insurance premiums. From federal investigations and search warrants served on residential facilities where fraud is suspected, to the investigations of the Medicare Fraud Strike Force, there are increasing news stories involving fraud and the measures necessary to prevent and stop abuse of the system.

The FBI released a recent home healthcare fraud story:

“The husband-and-wife owners of a Chicago home-healthcare business paid kickbacks to employees and marketers in exchange for referring elderly and disabled patients to the company for unnecessary or non-existent treatment that was funded by Medicare, according to a 23-count federal indictment unsealed today.[i]

Kickbacks to employees and marketers for patient referrals is a common problem and area of abuse in home healthcare. There are many more activities the experts in law enforcement study in an effort to isolate fraud. Since whistle blowers are able to share in the criminal penalties received in some fraud cases, there could be more eyes on home healthcare operations, including friends and neighbors who hear stories about home healthcare fraud. In some instances, honest and legitimate home healthcare providers could be reported to authorities. Defending against charges of fraud can involve documentation, effort and legal representation.

Common examples of home healthcare fraud are both due to knowing wrongdoing and negligence.

  • Billing and Claims Fraud: Sending a reimbursement claim to Medicare for services never received, exaggerated patient conditions, unnecessary services and false timesheets for healthcare providers are common billing and claims fraud activities. It is important to keep accurate and correct records of everything. Home healthcare workers should always ask whether they would be able to back up all their billing and claim submissions.
  • Fraudulent Accounting: When home healthcare operations cut corners in accounting and bookkeeping, their activity could look like an effort to avoid tax liabilities or earn more credits than actually earned. It is a good idea to keep an extra backup of all accounting and obtaining a C.P.A. review and audit is a smart and proactive measure.
  • Elder and At Risk Patient Abuse: The family of home healthcare patients are frequently notified by news stories about elder abuse that even their loved one may be at risk. It is vitally important to document any injuries to a patient, even if they bump into a wall and bruise an arm. Home healthcare workers may earn lower wages, have minimal training, and experience high turnover, so it is important for managers of home healthcare operations to be present and knowledgeable about everything going on in their facility.
  • Background Check Fraud: Where background checks are required by Medicare, for example, an industry-standard or specifically identified process must be used to verify the criminal and healthcare background of home healthcare workers. Cutting corners and missing a past felony in a state one did not think to check could lead to worse problems. Home healthcare managers attempting to avoid liability for negligence should always perform and document the best reasonable industry required background check.
  • Patient Recruitment Kickbacks: Paying employees and contractors to solicit patients is not allowed by the Medicare system and any home healthcare worker pulling homeless people off the street or placing individuals in home healthcare who do not legitimately need that level of care are likely to be convicted of fraud if investigated and caught. Avoiding even the slight appearance of impropriety is important. Proper paperwork used in admitting new home healthcare patients should be adopted as a diligence practice.
  • Home Healthcare and Physician Conspirators: When a doctor conspires with a home healthcare operation to write prescriptions, assist with certifications and other operating documentation, everyone involved is exposed to civil and criminal liability. If a doctor is engaged with wrongdoing with another you otherwise do not know, expect the investigators to scrutinize anyone else that doctor has worked with. Being proactive and documenting research on doctors with whom home healthcare operators transact, is an important precaution.

The best way to avoid unnecessary headaches and suspicions or investigations of wrongdoing is to keep all policies and practices well documented and reviewed by appropriate professionals. Michael V. Favia & Associates work with home healthcare operations to make sure they comply with the law and avoid exposure to liability for wrongdoing.

Michael V. Favia & Associates’ offices are conveniently located in the Chicago Loop, Northwest side and suburban meeting locations, you can schedule a discrete meeting with an attorney at your convenience and discretion. For more about Michael V. Favia & Associates’ professional licensing work, please visit www.IL-Licensing.com and feel free to “Like” the firm on Facebook and “Follow” the firm on Twitter.

 

 

 

[i] FBI press releases, Owners and Nurses of Chicago Home Health Care Company Among Seven Indicted in Medicare Fraud and Kickback Scheme, Aug. 27, 2015.

Physicians must be careful when offering to waive co-pays or deductibles as a professional courtesy

Criminal prosecutions and private insurance fraud actions are possible outcomes of violating the professional courtesy prohibition.

Criminal prosecutions and private insurance fraud actions are possible outcomes of violating the professional courtesy prohibition.

The law is not new but it is always good to be reminded that enforcement of healthcare rules and regulations is a focus of the federal government and its aggressive approach to ensuring everything is billed correctly for any services paid in part or in full with federal funds and what is paid by insurance. According to the Department of Health and Human Services (HHS), Office of Inspector General (OIG), “It is unlawful to routinely waive co-payments, deductibles, coinsurances or other patient responsibility payments.[i]” If however, there is no insurance or Medicare claim connected with healthcare service, and the doctor is not receiving any federal or insurance reimbursement the doctor is free to offer reduced or unpaid services at their discretion.

Professional courtesy in the healthcare profession is a common practice.

Professional courtesy is an age-old tradition and common practice among physicians and their families. It has been common for Doctor A to visit Doctor B who either reduces or does not charge for healthcare services for Doctor A and his family members. If there is a portion of services Doctor B can get paid for by Medicare or insurance, of course Doctor B would submit for reimbursement. Professional courtesies are also common in the other learned professions including law.

Is there a disparate impact on the economy or society if Doctor B waives the co-pay or deductible for Doctor A? The argument can be that if healthcare services are essentially free, assuming a professional courtesy arrangement exists, the beneficiary of that deal will use healthcare services without limitation, and the more frequent visits will burden Medicare or insurance.

Criminal prosecutions and private insurance fraud actions are possible outcomes of violating the professional courtesy prohibition.

The good news is that there are not many reported instances of physician indictments for violations of the federal fraud or abuse laws such as the Anti-Kickback Statute or the False Claims Act. Meanwhile, private insurers may be more likely to pursue private claims against physicians who do not extend the same discounts or waivers to the insurer as they do the beneficiary of a professional courtesy in billing.

The co-pay waivers may be treated as Medicare overcharges. If Medicare agrees to pay 80 percent of the cost of a service and the patient pays 20 percent, and the charge is $1,000 then the Medicare portion is $800. When the co-pay is waived, Medicare is actually paying 100 percent of the service, even if the 80 percent based on the listed cost of service is being billed to Medicare. There are legal and proper methods for offering waivers of co-pays and deductibles based on patient hardships. If the physician allows a legally permitted hardship waiver, it is important to make an accurate record of the instance to back up the propriety of the transaction if necessary.

Diligence and auditing billing procedures and policies is an important aspect of healthcare practice.

Michael V. Favia & Associates has represented healthcare providers in matters involving Medicare and insurance claims and medical billing and procedures, generally. Michael V. Favia recommends healthcare providers routinely review and audit their business and billing practices to make sure they are compliant with laws and regulations, which are often updated.

Michael V. Favia & Associates’ offices are conveniently located in the Chicago Loop, Northwest side and suburban meeting locations, you can schedule a discrete meeting with an attorney at your convenience and discretion. For more about Michael V. Favia & Associates’ professional licensing work, please visit www.IL-Licensing.com and feel free to “Like” the firm on Facebook and “Follow” the firm on Twitter.

 

[i] 67 Fed. Reg. 72,896 (Dec. 9, 2002)