Legal Cases Underscore Compliance Lessons for Anesthesia and Pain Groups: Part 3
Summary
We review takeaways from the Advanced Institute for Anesthesia Practice Management on recent legal cases of interest to anesthesia and pain practices pertaining to incorrect billing for anesthesia time and violations of the Anti-Kickback Statute.
We continue this week with our third eAlert highlighting legal cases related to significant risk areas explored by healthcare attorney Vicki Myckowiak, Esq., at the 2018 Advanced Institute for Anesthesia Practice Management. (Recent eAlerts summarizing cases and takeaways from AIAPM pertaining to overpayments, urinary drug tests, anesthesia modifiers and pre-signing of anesthesia records can be found here and here.)
We highlight these cases partly because, as noted in an eAlert earlier this year, civil monetary penalties, assessments and exclusions against individual practitioners and entities based on prohibited conduct and violations of major healthcare laws have risen substantially. These include the Stark Law, the Anti-Kickback Statute (AKS), the Emergency Medical Treatment and Labor Act (EMTALA) and the Health Insurance Portability and Accountability Act (HIPAA). In the early part of 2017, for example, the Department of Justice increased the per-claim range of penalties for the second consecutive year under the False Claims Act (FCA), which imposes penalties on clinicians who have submitted false claims to Medicare, Medicaid and other government healthcare programs.
Regardless of the rise in enforcement activity, in order to help ensure compliance and protect their practices, it always behooves anesthesiologists, pain specialists and nurse anesthetists to stay abreast of risk areas affecting healthcare and the specialty, not only nationally, through the Office of Inspector General and the Department of Justice, and but locally as well, through their Department of Justice branch office.
Incorrect billing of anesthesia time: The physician-owner and the CEO of a Nevada endoscopy center that employed nurse anesthetists also owned a billing company that billed for the endoscopy center. According to the U.S. Attorney's Office of the District of Nevada, between 2005 and 2008, the physician and the CEO conspired to overcharge Medicare, Medicaid and private insurers by overstating the amount of time nurse anesthetists spent with patients on a given procedure. They imposed intense pressure on employees to schedule and treat as many patients as possible in a day and instructed office staff to use the false records to prepare reimbursement claims.
The physician pleaded guilty to one count of conspiracy to commit healthcare fraud and one count of healthcare fraud and was sentenced to 71 months in federal prison, three years of supervised release, and ordered to pay more than $2.2 million in restitution. The CEO pleaded guilty to one count of conspiracy to commit healthcare fraud and was sentenced in 2015 to 366 days in prison and ordered to pay a $10,000 fine and $50,000 in restitution as well as $8.1 million in forfeitures.
Takeaways: The most discretionary of all anesthesia issues, anesthesia time is an integral part of anesthesia billing and will always be considered a risk area, Ms. Myckowiak noted. Practices should make sure their compliance programs include regular audits of anesthesia start and end times, and that the times on the anesthesia record are congruent with the hospital OR records.
We would also like to stress the importance for compliance and billing of accurate documentation of start and stop times for the anesthesia services provided. Do not round times or add time to a case. It is also worth noting that payers have been investing heavily in data analytics capabilities to identify outliers in these and other aspects of billing.
Kickbacks: In 2016, a federal grand jury indicted five defendants, including three pain specialists, on charges arising from a scheme in which physicians and administrative staff with the American Spine Center, a Maryland pain management practice, agreed to refer urine specimens to an outside laboratory for testing in exchange for $1.37 million in kickbacks (payments made to the providers for referring work to the lab).
The practice required patients who were prescribed pain relief medications to submit urine samples for testing. In 2011 and 2012, the practice typically generated 700 to 1,000 urine samples monthly. These samples were sent to the outside lab.
According to the 36 count indictment, starting in February 2011, the owner agreed to pay kickbacks to the principals of the spine center in exchange for patient referrals to his lab, and other companies he owned, for urine testing, as well as back braces and pain creams. A marketing representative for the lab was charged with facilitating the arrangement and received five percent of the agreement's proceeds.
All five defendants face a maximum sentence of five years in prison for conspiring to violate the AKS. Two of the physicians also face five years in prison on each of 12 counts of soliciting and receipt of unlawful remuneration in violation of the AKS.
The physicians and CFO of the spine center also defrauded the IRS by not declaring the kickbacks as income and by filing false corporate tax returns that overstated the practice's expenses and understated its revenues. They face a maximum of five years in prison for conspiring to defraud the IRS.
Takeaways: The Anti-Kickback Statute is a law that prohibits rewarding providers and their staff for referring business to another provider, entity, etc. As the OIG states, "in some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime."
Contrary to common perception, the AKS does not apply only to physicians and other practitioners; it applies to anyone who offers, pays, solicits or receives remuneration in exchange for a referral for federal healthcare program business.
Anesthesia practices should have any financial relationships vetted by qualified legal counsel to ensure that the arrangements do not violate any federal or state regulations.
With best wishes,
Tony Mira
President and CEO