The Centers for Medicare and Medicaid Services (CMS) routinely conducts various types of investigations to ensure compliance, prevent fraud, waste, and abuse, and recover improper payments within the programs.
For example, CMS reviews claims before payment is made to identify possible errors or non-compliance issues. They also review claims after payment to determine if there were improper payments and to recover overpayments. CMS also focuses on identifying overpayments and underpayments in Medicare claims.
Healthcare providers and suppliers face increased government scrutiny, including whistleblower lawsuits under the False Claims Act, a federal law that imposes liability on individuals and companies who defraud government programs.
This Act allows private citizens to file lawsuits on behalf of the government when they believe that a party has submitted false claims for government funds.
The Act also provides for significant penalties, including treble damages and civil fines, which can be financially devastating for healthcare providers. Government regulators then pursue civil and criminal enforcement of healthcare fraud based on these claims.
A significant area of government scrutiny is claims reviews by CMS and its audit contractors, which ensure that CMS accomplishes its mission of program integrity to prevent, detect, and combat fraud, waste, and abuse in the Medicare and Medicaid Programs.
Types of Medicare Audits
A key component of CMS's program integrity efforts includes different types of program integrity audits, often run by third-party government contractors. The common types of Medicare and Medicaid audits include the following:
- Unified Program Integrity Contractor (UPIC) audits.
- Targeted Probe & Educate (TPE) Program audits.
- Supplemental Medical Review Contractor (SMRC) audits.
- Comprehensive Error Rate Testing (CERT) audits.
Medicare and Medicaid Providers may encounter other audits, including audits conducted directly by CMS's Center for Program Integrity and quality of care-related audits by quality improvement organizations (QIOs) and state agencies.
Key Takeaways
- The Centers for Medicare and Medicaid Services (CMS) plays a pivotal role in upholding the integrity of healthcare programs. This responsibility underscores the importance of compliance and the identification of any irregularities.
- CMS regularly conducts audits and compliance reviews of healthcare facilities to ensure compliance and to identify any irregularities or "red flags" that could indicate fraudulent or improper billing practices.
- For healthcare providers, the implications of these investigations are significant. They can lead to severe consequences, including civil penalties or even loss of licensure. This highlights the importance of taking prompt action and the necessity of consulting a lawyer.
- Understanding the potential severity of consequences, such as the loss of professional reputation and financial penalties, can help healthcare providers realize the urgency of the situation.
- When audit findings suggest violations indicating possible fraud or improper billing practices, the CMS may conduct a more thorough investigation in partnership with agencies such as the Office of Inspector General (OIG) and the Department of Justice (DOJ).
- The OIG is responsible for protecting the integrity of HHS programs, while the DOJ is the principal federal agency responsible for enforcing the law and defending the interests of the United States in legal matters.
- Minor errors in documentation or billing practices can trigger these probes, placing facilities and providers under extreme scrutiny.
CMS Investigation Strategies
If your healthcare practice or business is under investigation by the Centers for Medicare and Medicaid Services (CMS), it's crucial to be prepared to defend against allegations of Medicare or Medicaid fraud. Remember, you have the power to protect your practice. This preparation, including seeking experienced federal defense counsel, can provide a sense of security and readiness.
To enforce the program requirements, CMS relies on an extensive auditing program. This includes contracting with fee-for-service auditors to review the program billings of providers, and direct audits of sponsors for Medicare and Medicaid compliance.
These audits can be comprehensive, covering all aspects of a provider's operations, or targeted, focusing on specific areas of concern. This comprehensive approach ensures that all aspects of healthcare services are scrutinized for compliance.
If your healthcare business or practice is under investigation, you could face substantial penalties, and you need to consult experienced federal defense counsel. promptly.
At Cron, Israels & Stark, we are experienced in healthcare fraud investigations. CMS often collaborates with the following investigative divisions and healthcare fraud task forces:
- Drug Enforcement Administration (DEA).
- Department of Health and Human Services (DHHS).
- Office of Inspector General (OIG).
- Medicare Fraud Strike Force.
- Opioid Fraud and Abuse Detection Unit.
Our experience enables us to provide our clients with in-depth insights into the CMS investigation process and develop effective defense strategies based on real-world experience on both sides of high-stakes CMS inquiries. This understanding can empower healthcare providers to navigate the process with confidence.
We provide legal representation to hospitals, doctors, pharmacies, laboratories, durable medical equipment (DME) companies, and other healthcare-related entities.
CMS Investigations Common Allegations
- Upcoding. Upcoding occurs when healthcare providers bill for services or items at a higher reimbursement rate than the actual services or items provided, such as billing Medicare for a comprehensive evaluation when only a basic consultation was performed. This is viewed as an intentional effort to inflate reimbursements fraudulently.
- Unbundling. Unbundling is the practice of separating charges for procedures or services that are typically billed together as part of a single package. By splitting these charges, providers can claim higher cumulative reimbursement amounts.
- Unnecessary Services. Allegations may arise when services, tests, or equipment deemed unnecessary for the patient's diagnosis or treatment are billed to CMS. This is often flagged in cases involving excessive or redundant diagnostic testing.
- Phantom Billing. Phantom billing involves submitting claims for services, equipment, or medications that were never provided. Providers accused of phantom billing might create fraudulent patient records to make it appear as though such services were rendered.
- Ghost Patients. The term "ghost patients" refers to instances where providers bill CMS programs for treatments or services provided to people who do not exist. This involves creating fictitious patient profiles and fabricating service records to obtain fraudulent payments.
- Kickbacks. Offering or receiving kickbacks for patient referrals, prescribing specific medications, or using certain suppliers are serious compliance issues under the Anti-Kickback Statute. These financial incentives can involve rebates, referral fees, or commissions, all of which violate fair competition laws in the healthcare market.
- Telehealth Guidelines. Non-compliance can involve billing for virtual consultations not conducted, conducted improperly, or performed outside the scope of Medicare or Medicaid rules. This means that billing for telemedicine or telehealth services is non-compliant with Medicare or Medicaid guidelines.
- Opioid Overprescription. Allegations may focus on overprescribing opioids beyond medically necessary levels or dispensing them without adequate monitoring of patient needs and compliance. Simply put, this means overprescribing or improperly dispensing or administering opioid medications in violation of Medicare or Medicaid guidelines.
- Fraudulent Certifications. Often related to kickback schemes, fraudulent certifications result in inappropriate billing for services that Medicare and Medicaid should not cover. Simply put, this means fraudulently certifying patients for home health or hospice care, often in conjunction with the payment or receipt of illegal kickbacks.
Possible Outcomes and Penalties
CMS conducts Medicare and Medicaid fraud investigations for various reasons, including unfavorable audit determinations. Sometimes, a CMS investigation may have been triggered by its automated review of billing data, a patient complaint, a referral from another agency, or a whistleblower lawsuit.
The possible outcomes of CMS investigations can include termination of the investigation without further consequences, as well as prosecution in federal district court for criminal healthcare fraud. CMS investigations may also lead to civil charges under the False Claims Act, the Anti-Kickback Statute, the Stark Law, and other relevant federal laws.
The penalties for improperly billing Medicare or Medicaid depend on whether the alleged billing fraud was intentional or not. If your healthcare practice or business is not accused of intentionally overbilling, then civil penalties include fines, restitution, and program exclusion. If federal prosecutors accuse your practice or business of intentional billing fraud, then you can face federal criminal prosecution.
What You Need a Federal Defense Attorney
If you or your healthcare facility is under scrutiny, you need to protect your rights and your interests strategically. You need to consult with our federal criminal defense lawyers to address potential liabilities.
We can help evaluate the allegations against you, guide you through audits and investigations, and craft a defense strategy tailored to your specific case.
There are several potential defenses to allegations of Medicare or Medicaid fraud. The most effective defense is affirmative proof that your practice's or business's program billings are fully compliant. Sometimes, the best approach is to work toward convincing CMS that there is insufficient evidence to support civil or criminal charges for healthcare fraud.
If your healthcare practice or business has improperly billed Medicare or Medicaid, you will need to work with our federal defense lawyers to resolve the issue.
Do not take any actions until advised by legal counsel. Voluntarily disclosing violations can mitigate the risk of increased penalties or prosecution. For more information, contact our federal criminal defense law firm, Cron, Israels & Stark, based in Los Angeles, CA.
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