New York Attorney General Letitia James announced the indictment of a physician and his company for defrauding Medicaid by forcing patients to get unnecessary and invasive medical tests. For years, the physician allegedly ran a kickback scheme where he bribed other physicians for patient referrals, subjected some of those patients to tests and procedures that they did not need, and then caused false claims to be submitted to Medicaid for those tests. The physician was charged with Grand Larceny in the Third Degree, Healthcare Fraud in the Third Degree, eight counts of Falsifying Business Records in the First Degree, and three counts of violating the Social Services Law statute prohibiting the payment of kickbacks related to the provision of services under the state’s Medicaid program, all felony charges.
From January 2006 to August 2017, the physician allegedly gave gift cards, cash, and checks totaling more than $547,000 to three other physicians in exchange for their referral of patients (including Medicaid beneficiaries) to his company. The company received more than $1 million in paid claims relating to patient referrals from those physicians. In addition to this kickback scheme, from January 2014 to August 2017, he allegedly directed his employees to add additional, unordered radiological procedures to orders submitted by referring physicians to increase the amount of money the company would receive from Medicaid.
The physician allegedly defrauded Medicaid, and subjected patients to medically unnecessary and often invasive radiological testing without the direction, consent, or approval of the referring physicians responsible for the underlying care of those patients. The additional, unnecessary tests included MRIs of the brain, cervical spine, and lumbar spine, all “with contrast,” which required subjecting patients to unnecessary and invasive injections. He then directed his staff to submit claims for payment to Medicaid for those medically unnecessary tests.
The Office of the Attorney General (OAG) is also, in a separate civil lawsuit filed in the United States District Court for the Eastern District of New York, seeking damages from the physician and his company, among other defendants, for violating the Federal and New York State False Claims Act and for other civil causes of action.
Issue:
All members of the healthcare team should be knowledgeable of what may be considered an illegal kickback. A kickback, or failure to report a kickback, can result in fines and other sanctions, including placement on the OIG’s List of Excluded Individuals and Entities. Staff should also understand their responsibility to identify and report concerns of utilization of any services that they believe are unnecessary or inappropriate for a resident, to include ordered tests, procedures, treatments, therapies, and medications.
Discussion Points:
- Review your policies and procedures on ensuring that all provided resident services are reasonable and necessary and for prevention of false claims. Also review your policies and procedures for preventing and reporting kickbacks. Update your policies and procedures as needed.
- Train appropriate staff on how to determine if services each resident is receiving are reasonable and necessary. Train all staff on the Anti-Kickback Statute and what can be considered a kickback. Ensure appropriate staff monitor for potential false claims related to unnecessary or inappropriate services that are unsupported by documentation. Include information on how to report concerns and suspected violations, and that prompt reporting is mandatory. Document that the trainings occurred and place in each employee’s education file.
- Periodically audit medical records to ensure that all services provided to residents are reasonable and necessary. Also periodically audit to ensure that staff are aware of what should be done if they suspect unnecessary services are being ordered or provided and if an illegal kickback has occurred, whether intentionally or unintentionally.
