Advice for New Physicians on Avoiding Medicare and Medicaid Fraud and Abuse
The U.S. Department of Health & Human Services Office of Inspector General (HHS-OIG) has published a Roadmap for New Physicians on avoiding Medicare and Medicaid fraud and abuse. The guidance for new physicians is intended to explain how to comply with Federal laws that combat fraud and abuse, how to identify red flags that could lead to potential liability in law enforcement and administrative actions, and includes tips on compliance with these laws in physicians’ relationships with payers, vendors, and fellow providers.
The Federal Government places enormous trust in physicians and programs such as Medicare and Medicaid rely on physicians’ medical judgment to treat beneficiaries of these programs with appropriate services and to submit accurate and truthful claims. While most physicians work ethically and provide appropriate care to patients and submit claims accurately, there are a few who attempt to cheat the systems for personal financial gain. As a result of dishonest healthcare providers, laws have been created to combat fraud and abuse.
There are five main Federal fraud and abuse laws that physicians should be aware of:
- The False Claims Act
- The Anti-Kickback Statute
- The Physician Self-referral (Stark) Law
- The Exclusion Statute, and
- The Civil Monetary Penalties Law
The False Claims Act protects the government from being overcharged or sold shoddy goods and services. Submitting claims for Medicare and Medicaid that are known to be fraudulent is illegal and carries a penalty of up to three times the programs’ loss plus $11,000 per claim. These penalties apply regardless of whether there was specific intent to defraud. There are whistleblower provisions that allow individuals to file suits on behalf of the United States and obtain a percentage of any recoveries. There is also a criminal False Claims Act, and physicians have received criminal fines and have served time in jail for submitting false claims.
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The Anti-Kickback Statute is a criminal law prohibiting knowing and willful payment of remuneration for inducing or rewarding patient referrals and the generation of business involving items or services payable by the Federal health care programs. Penalties for kickbacks include fines, jail time, and exclusion from Federal health care programs. The penalty is $50,000 per kickback plus three times the amount of the remuneration.
The Physician Self-referral (Stark) Law prohibits physicians from referring patients to receive “designated health services” payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship unless an exception applies. As with the False Claims Act, the Stark law does not require proof of specific intent to violate the law. Penalties for self-referrals include fines and exclusion from Federal health care programs.
The Exclusion Statute requires the HHS-OIG to exclude individuals from participation in all Federal healthcare programs if they are found to have committed Medicare or Medicaid fraud, patient abuse or neglect, have felony convictions for other health-care-related fraud, theft, or other financial misconduct, or felony convictions for unlawful manufacture, distribution, prescription, or dispensing of controlled substances. Exclusion means Federal health care programs will not pay for items or services furnished, ordered, or prescribed by excluded individuals.
Under the Civil Monetary Penalties Law, the HHS-OIG may seek civil monetary penalties for a wide variety of conduct and also exclusion. Penalties range from $10,000 to $50,000 per violation.
The Roadmap for New Physicians and other guidance material is available from the HHS-OIG on this link.
