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May 21, 2018


Legal cases presented at the Advanced Institute for Anesthesia Practice Management offer valuable reminders to anesthesia practitioners and pain specialists regarding the importance of documenting medical necessity for urine drug test screens, including quantitative tests, and compliance with the 60-day overpayments provision of the Affordable Care Act.

Although anesthesia and pain management groups have good reason to be concerned about the possibility of an audit in the current environment (see our May 14, 2018 eAlert), they can work proactively to minimize the risk of an adverse outcome (see the article on payer audits in our quarterly newsletter, Communiqué) by focusing diligently on compliance with all federal and state rules, regulations and policies.  Staying informed about enforcement actions, settlements and lawsuits affecting anesthesia and chronic pain practices can help greatly in this regard.

At the Advanced Institute for Anesthesia Practice Management in Las Vegas, Detroit-based attorney Vicki Myckowiak, Esq., presented a variety of recent cases illustrating important lessons regarding current hot-button risk areas for anesthesia and pain management practices, compliance officers and practice managers.  Following up on last week’s eAlert describing the consequences of pre-signing anesthesia records and incorrect anesthesia modifiers, we summarize two more cases, and lessons learned, from Ms. Myckowiak’s talk.

Unnecessary urinary drug tests (UDTs):  In 2016, the Florida-based Coastal Spine and Pain Center agreed to pay $7.4 million to resolve allegations that it violated the False Claims Act (FCA) by performing medically unnecessary drug screening procedures.  The settlement was for the practice’s use of quantitative drug tests to identify and count particles of illicit drugs in patients’ urine.  These highly specific and expensive tests are appropriate only when there is reason to doubt a more general and less costly qualitative drug test.  According to the U.S. Attorney’s Office for the Middle District of Florida, the practice performed qualitative UDTs for patients appropriately, but performed and billed for quantitative drug tests for all patients, regardless of the qualitative result or medical necessity.

The case was developed by the Department of Justice (DOJ) through a review of claims data that found the practice to be a statistical outlier in billing for quantitative drug test screens.  In every instance in which the practice billed for a qualitative drug test screen, it also billed for a quantitative drug test screen—an outlier that prompted the DOJ investigation.

Takeaways:  Although this case is an extreme example, it underscores the importance of documenting medical necessity in the use of drug screening tests. Ms. Myckowiak advised practices to follow the guidelines for the chronic use of opioid analgesics published by the Federation of State Medical Boards; to use a risk assessment tool to determine the appropriate frequency of UDTs; and to know and follow individual payers’ policies regarding utilization of UDTs.  (For more information, also see Rational Urine Drug Monitoring in Patients Receiving Opioids for Chronic Pain: Consensus Recommendations, Pain Medicine, January 2018, and the information statement on considerations for long-term opioid use in chronic, non-cancer pain conditions from the American Society of Anesthesiologists’ Joint Committee on Pain Medicine and Ad Hoc Committee on Prescription Opioid Abuse.)

[The UDTs referred to above are billed with CPT Codes 80305 and 80307 under Presumptive Drug Class Screening Procedures. Please note the documentation needed to bill for drug testing:

  • A signed physician order.  Attestations are not acceptable for unsigned orders/requisitions. The physician ordering the tests should be the same physician treating the patient and by whom the results will be used in managing the patient’s treatment.
  • Specified documentation to support intent. This can be part of a progress note/consultation/office note, etc. Clearly indicate which tests are being ordered.
  • Medical necessity. What is the reason the test is being ordered?
  • The test results should also be included in the patient’s medical record.
  • A current Clinical Laboratory Improvement Amendments (CLIA) number must be included.]

Failure to return overpayments:  Mount Sinai Health System agreed to pay $2.95 million in 2016 to resolve allegations that it violated the FCA by delaying repayment of nearly $1 million to Medicaid for two years following discovery of the overpayments.  The health system agreed to pay $2.95 million rather than go to trial over $844,000 in Medicaid overpayments (the result of a computer glitch), which could have led to treble damages and $4.9 million in FCA penalties for the 444 payments in question.

The 60-day overpayments provision of the Affordable Care Act (ACA) creates FCA liability for healthcare providers that identify overpayments but fail to return them within 60 days.  The Mount Sinai settlement was the first to specifically resolve allegations of violations of this provision.

The settlement stemmed from a qui tam action alleging that an employee alerted Continuum Health Partners, Inc. (now a part of Mount Sinai Health System) to hundreds of potential overpayments.  (A qui tam lawsuit is a type of lawsuit that rewards whistleblowers under the FCA in successful cases where the government recovers funds lost to fraud.)  Rather than taking action to refund the overpayments, the health system fired the whistleblower and delayed further inquiry. 

In our own research, we learned that the case provided the first guidance on what it means to “identify” an overpayment and start the 60-day clock created by the ACA provision.  A provider has identified an overpayment if it has been “put on notice” that a certain claim may have been overpaid.  When the Centers for Medicare and Medicaid Services released its final 60-day overpayment rule in 2016, it largely adopted the same interpretation of “knowledge” and “identified” used in this case.  A provider has identified overpayments if it has “actual knowledge of the overpayment or acts in reckless disregard or deliberate ignorance of the overpayment,” U.S. District Judge Eduardo Ramos wrote.

Takeaways:  This case serves as a useful reminder to anesthesia and pain groups to include a requirement in their compliance programs to investigate allegations of overpayment and to respond to government requests for repayment in a timely manner or face stiff penalties (currently $5,500 to $11,000 for each false claim and treble the amount of the government’s damages).  Overpayments must be returned to government payers within 60 days of discovery.

We will explore additional cases from Ms. Myckowiak’s presentation in future eAlerts.

With best wishes,

Tony Mira
President and CEO