Published on Jun 24, 2016
The False Claims Act provides for liability for triple damages and a penalty from $5,500 to $11,000 per claims for anyone who knowingly submits or causes the submission of a false or fraudulent claim to the United States. In this case, a federal judge in Orlando, FL determined that violating Medicare's Conditions of Participation doesn't automatically expose providers to the triple damages available under the False Claims Act.
On Wednesday, the front page of your newspaper may have had the story of the announcement by Federal authorities of what they described as the culmination of an "unprecedented" multijurisdictional healthcare fraud investigation resulting in 301 arrests tied to $900 million in fraudulent billing schemes. The 301 defendents slapped with civil and criminal charges included 61 physicians, nurses and other licensed medical professionals accused of participating in the various fraud schemes. In addition to the arrests, CMS suspended payment to a number of providers using its suspension authority provided in the PPACA.
This report reminds us of the Halifax Hospital Medical Center case. Whistleblower Elin Baklid-Kunz, the former chief compliance officer and Director of Physician Services for this Daytona Beach FL hospital, alleged that between 2002 and 2013, Halifax Health officials regularly admitted Medicare patients whose acute care admissions were not medically necessary. In that time, the hospital submitted 212,000 Medicare bills for inpatient care that should have been coded as less-expensive outpatient services. In addition, Ms Baklid-Kunz encountered internal audits that showed Halifax neurosurgeons were performing procedures at four times the national average and she became concerned that the contracts Halifax maintained with some medical oncologists violated the Stark Law. Baklid-Kunz raised her concerns with the executive team at Halifax but she was repeatedly brushed off. Baklid-Kunz knew that the fraud was massive, that Halifax was clearly breaking the law, and that the internal documents she had seen made clear that the leadership team knew it.
After investigating her false claim allegations, the US Department of Justice joined the part of her case that alleged Halifax had violated the Stark Law. Prior to trial, Halifax was hit by sanctions for destroying medical records related to the case, despite a 3 year old records retention order from the court - a behavior the judge in the cases called "reprehensible." In March 2014, Halifax settled the Department of Justice part of the case for $85 million! The False Claims part of the case was settled for $1 million. Ms. Baklid-Kunz was awarded $20.8 million to be split between herself and her legal team.
Moral of the story? Utilization review activities must begin at the hospital's front door. Highly knowledgeable and proficient UR specialists must be on guard and be alert. Make make sure that your gatekeeping processes are compliant with federal law and that patients with documented need for hospital care are admitted while others are redirected to a more appropriate setting.