By Elizabeth E. Hogue, Esq.
• The Gist: President Obama recently signed the Fraud Enforcement and Recovery Act, which beefed up the False Claims Act that permits whistleblower suits. Subcontractors can more easily be hit with suits, even when no false claim was directly submitted to the government.
In December 2008 a federal grand jury indicted owners and employees of eight home health agencies in the metro-Detroit area on charges that they took part in a plan to solicit and pay kickbacks in exchange for Medicare patient referrals.
This plan allegedly was devised by Rebecca Sharp, president of Continuing Senior Care, Inc. in Ypsilanti, Mich., who allegedly received over $1.1 million in kickbacks.
According to the indictment, Sharp obtained potential home health patients by directing her staff to randomly telephone senior citizens in order to offer them medical services and chore workers.
If any senior citizen was curious as to how Continuing Senior Care received his or her contact information, employees were instructed to state that this information came from Medicare.
When a senior citizen agreed to the offer, employees would acquire patients’ Medicare information. Patients would then be visited by a doctor, employed by Sharp, who measured vital signs and prescribed home healthcare to all patients, whether or not it was medically necessary.
Following this, Sharp referred the Medicare patients to home healthcare agencies. She allegedly offered to refer 80 patients and Medicare numbers each week in exchange for a $250 fee per patient. In addition, Sharp claimed that the doctors whom she employed would sign plans of care regardless of patients’ actual medical needs.
With regard to the ramifications of this case, U.S. Attorney Terrence Berg stated that when Medicare is abused by unscrupulous persons to pay for unnecessary treatment and to garner kickbacks, that conduct harms both legitimate Medicare recipients as well as the program itself.
Federal law prohibits illegal remuneration. This law is often called the anti-kickback statute. It generally says that anyone who either offers to give or actually gives anything to anyone in order to induce referrals has engaged in illegal conduct. In this case, the payments allegedly made by home health agencies to Continuing Senior Care seem to have been made in exchange for referrals in direct violation of the anti-kickback statute.
In addition, it is important to note that if the referrals were obtained illegally in violation of the anti-kickback statute and agencies submitted claims for services provided to patients referred by Continuing Senior Care, such claims may also violate the federal False Claims Act.
The Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services, the primary enforcer of fraud and abuse prohibitions, has clearly stated that claims submitted for services provided to patients who were referred in violation of applicable prohibitions are false claims.
Submission of false claims may also result in criminal prosecution or civil liability, amounting to many thousands of dollars and suspension or exclusion from participation in the Medicare and Medicaid programs and other federal and state healthcare programs.
In addition to the necessity of avoiding payment of kickbacks, therefore, providers must be scrupulous about avoiding all illegal strategies for obtaining referrals, and attorneys or whistleblowers need to know where to look and what to look for.
When referrals are obtained by any unlawful means, the consequences can be extremely significant for providers.
Consequently, as part of the development of new marketing strategies, provider management must always explore the legal boundaries of proposed methods of marketing prior to implementation. In order to do so, marketing staff cannot be allowed to implement new marketing programs without review and approval by management. Any review must include a thorough examination of whether the marketing program, as proposed, violates applicable prohibitions and, if so, whether it can be changed so that it passes muster. •
To learn more about the above issues from a book titled Preventing Fraud and Abuse, send a check for $30, which includes shipping and handling, made out to Elizabeth E. Hogue, Esq., to Fulfillment, 107 Guilford, Summerville, S.C. 29483. To obtain an 80-minute DVD that educates marketing staff and others about fraud and abuse compliance, send a check for $105, that includes shipping and handling, to the above address.
© 2009 Elizabeth E. Hogue, Esq.;
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