Articles Tagged with “Fraud and Abuse”

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A proposed bipartisan bill, titled the Preventing and Reducing Improper Medicare and Medicaid Expenditures (PRIME) Act, is aimed at combatting waste, fraud, and abuse in Medicare and Medicaid spending. If passed, the PRIME Act would continue CMS’ efforts to move away from the “pay and chase” model of combatting improper payments towards the more aggressive “prevent and detect” model.

The PRIME Act would enact a range of reforms designed to proactively target improper payments, including fraud, within the Medicare and Medicaid programs. The reforms include, for example, engaging Medicare beneficiaries in identifying waste and fraud through a program called the Senior Medicare Patrol (SMP). The bill also seeks to administer harsher penalties for instances of Medicare or Medicaid fraud, as well as identify theft and the sale or distribution of Medicare and Medicaid beneficiary ID numbers.

In a press release addressing the bill, Rep. Peter Roskam (R Ill.) announced,

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A recent June 2013 Office of Inspector General (OIG) report titled, “Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority,” revealed that Medicare mistakenly paid a sum of $5.4 million for 75,552 Part D drug prescriptions ordered by 14 prescriber types without the authority to prescribe in any State. The 14 selected prescriber types the OIG based its study on include practitioners such as massage therapists, athletic trainers, nutritionists, dental hygienists, and nutritionists. Medicare does not pay for prescriptions ordered by practitioners who are not licensed to prescribe drugs.

The OIG piloted this study as part of the OIG’s Spotlight on Drug Diversion and also complements last week’s hearing on “Curbing Prescription Drug Abuse in Medicare,” which was held by the Senate Committee on Homeland Security and Governmental Affairs on June 24, 2013.

According to the report, the Centers for Medicare and Medicaid Services (CMS) agreed to the OIG’s urge to heighten monitoring over Part D prescribers. Specifically, CMS has concurred with the OIG’s recommendations to:

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On Friday, May 24, 2013, ISTA Pharmaceuticals, Inc., a pharmaceutical company recently acquired by Bausch & Lomb, Inc., pled guilty to violating the Federal Anti-Kickback Statute and the Food, Drug and Cosmetic Act (FDCA). Under the terms of a civil settlement agreement and ISTA’s guilty plea, the pharmaceutical company has agreed to pay a total of $33.5 million to states and the federal government in fines and fees for conspiracy, misbranding, false submissions to government health care programs, and under whistleblower provisions of the False Claims Act.

The Anti-kickback Statute provides criminal penalties for companies who knowingly and willfully offer, pay, solicit or receive remuneration in order to induce business payable by Medicare or Medicaid. According to the Department of Justice’s press release, ISTA violated the Anti-kickback statute by offering doctors illegal inducements, such as wine tastings and golf outings, in order to persuade doctors to prescribe ISTA’s eye drug, Xibrom, to their patients.

Under the FDCA, companies may not introduce drugs into interstate commerce for uses that have not been approved by the Food and Drug Administration. Although the Food and Drug Administration approved ISTA’s eye drug, Xibrom, for pain and inflammation after cataract surgery, ISTA pled guilty to marketing Xibrom for unapproved uses, such as to prevent swelling of the retina and to prevent cystoid macular edema.

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The United States Department of Justice (“DOJ”) announced yesterday that a Detroit-area resident, Louisa Thompson, plead guilty on June 20, 2012, to one count of criminal conspiracy to commit health care fraud in the Eastern District of Michigan federal court.

The Health Care Fraud Prevention and Enforcement Action Team (HEAT) task force, a DOJ and U.S. Department of Health and Human Services (HHS) multi-agency joint venture, headed the investigation of Ms. Thompson. The HEAT task force, which is an initiative of the federal Medicare Fraud Strike Force, uses data analysis and community policing to detect health care fraud perpetrators who steal billions of dollars from the federal government.

The task force discovered that since 2006, Ms. Thompson had billed Medicare for psychotherapy services through two companies, TGW Medical Inc. and Caldwell Thompson Manor Inc., despite these services having never been performed, or performed by unlicensed staff. Ms. Thompson has yet to be sentenced in the case, and faces up to 10 years imprisonment and a $250,000 fine.

Based on recent Medicare Fraud Task Force activity, it appears the HEAT task force is targeting psychological and psychotherapy service providers aggressively, both for criminal prosecution as well as for civil actions to recover money that Medicare and Medicaid has paid. The government’s most-used tool in civil health care cases is the False Claims Act.

The False Claims Act (FCA) was drafted in1893 and was originally intended to prohibit and prevent fraudulent claims against the government during the Civil War. Its purpose was to force government contractors to deliver promised materials, hold them accountable if they did not, and deter fraudulent activity. Under the FCA a qui tam relator (whistleblower) could bring suit on behalf of the United States, and be rewarded with a percentage of the government’s recovery.

In the late-1980s the federal government began using the FCA to pursue fraud in the federal health care programs. In recent years the government has relied on the FCA to combat fraud and abuse in the healthcare arena for conduct that did not reach the standards for criminal prosecution. The penalties for violation of the FCA can be up to $11,000 per false claim as well as three times the damage to the government.
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In the December 19, 2011 Federal Register, CMS published a Proposed Rule to implement the “Physician Payment Sunshine Act” portion of Patient Protection and Affordable Care Act (PPACA), or health care reform, which requires drug, medical device, biological and medical supply manufacturers to track and report payments made to physicians and teaching hospitals. The Proposed Rule clarifies several components of the Physician Payment Sunshine Act, including the following:

1. Applicable manufacturers must report the required information to CMS in an electronic format by March 31, 2013 and on the 90th day of each calendar year thereafter.

2. The Physician Payment Sunshine Act will apply to any manufacturer whose products are sold or distributed in the United States regardless of where they are manufactured.