Justice Department Lawsuit Reveals Roadmap to Avoid False Claims Act Liability

by Baker Donelson
Contact

Earlier this month, the Justice Department filed a lawsuit against Vitas Hospice Services, LLC, and related entities, alleging that Vitas fraudulently billed the Medicare program in violation of the False Claims Act (FCA). Although the lawsuit involves hospice services, the government’s allegations provide general lessons for any health care provider regarding the types of activity that draw the government’s attention. More importantly, the lawsuit reveals a roadmap that any health care provider could follow to reduce its risk of liability under the FCA.

The Government’s Allegations

The government alleged that the Medicare program pays for hospice services provided to eligible Medicare beneficiaries. A beneficiary is eligible for hospice services if he or she is “terminally ill,” i.e., “has a medical prognosis of six months or less if the individual’s illness runs its normal course.” This prognosis must be supported by a physician certification and the beneficiary’s medical records.

Medicare pays for hospice services on a per diem basis. There are four levels of per diem payment depending on the intensity of care provided. The lowest level of payment is for “routine care,” while the highest level of payment is for “crisis care.” The government further alleged that Medicare paid significantly more for crisis care than for routine care.

According to the government, Vitas overbilled Medicare for crisis care services with knowledge that such payment claims were false because the patients did not need crisis care, but rather, should have received routine care paid at the lower per diem rate. In addition, the government alleged, some patients did not qualify for any level of hospice care because they did not have a life expectancy of six months or less. Moreover, the government alleged that publicly available data demonstrated that Vitas was billing Medicare for substantially more crisis care as compared to its peers.

The government also alleged that Vitas engaged in “aggressive marketing tactics” to increase its volume of crisis care that was billed to Medicare, without disclosing the Medicare eligibility criteria for crisis care. In addition, the government asserted that internal Vitas emails demonstrated management’s attempt to pressure clinical staff to increase crisis care utilization, without regard to patients’ eligibility for that level of care. Vitas allegedly applied such pressure by setting aggressive patient admission goals and tying employee compensation to achieving those goals. Vitas management allegedly monitored patient admissions and discharges closely to assess whether the patient census met corporate goals. Furthermore, Vitas allegedly provided extensive training to staff regarding the “selling” of hospice services to patients and their families, but failed to provide training regarding Medicare’s eligibility requirements for hospice services.

According to the government, Vitas management overrode the clinical assessments of physicians and nurses that some patients did not qualify for hospice care. In some cases, the severity of a patient’s clinical condition was exaggerated in the medical record to justify a hospice admission. The government’s lawsuit also cited to numerous instances in which patient medical records allegedly demonstrated that patients did not need crisis care or, in some cases, any hospice care. In addition, the government alleged that Vitas conducted internal audits demonstrating that Vitas had overbilled Medicare, yet Vitas allegedly failed to take corrective action, including a failure to return overpayments received for hospice services.

10 Lessons Learned

The Justice Department’s allegations against Vitas suggest numerous steps that may be taken by any health care provider to reduce liability for the submission of false claims to government health care programs:

  1. Staff involved in billing government health care programs must be adequately trained regarding billing requirements – the government will interpret a lack of training as the provider’s indifference toward regulatory compliance.
  2. If a government health care program involves multiple payment levels, a provider seeking an enhanced level of payment must verify its entitlement to higher payment – enhanced payment often leads to enhanced government scrutiny.
  3. Providers should evaluate any publicly available data to compare their performance to peers – significant deviations from industry norms will likely attract the government’s attention.
  4. Providers’ clinical records must support billing to government health care programs – providers should assume the government will eventually inspect the clinical records underlying requests for payment.
  5. The alteration of clinical records undercuts a provider’s credibility with the government and may lead to FCA liability.
  6. Marketing materials should not suggest a provider can offer services without disclosing any regulatory limitations on the availability of such services.
  7. Carelessly worded emails from management may create the impression that a provider’s profitability trumps regulatory compliance – the government is more likely to take adverse action against a provider whose “corporate culture” downplays the importance of regulatory compliance.
  8. Employee concerns regarding clinical practices should be evaluated and, if valid, addressed by the provider – a disregard for employee complaints may create a whistleblower and FCA liability.
  9. Internal audits revealing compliance issues should be corrected, not ignored – a provider’s “reckless disregard” for compliance issues may lead to FCA liability.
  10. A provider’s discovery of an overpayment requires the prompt return of the overpayment to avoid FCA liability.

Error-free billing is a goal that’s rarely achievable. Providers should implement an effective compliance program to ensure that any billing errors are isolated, identified, and corrected. The effort will go a long way to reduce FCA liability.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Baker Donelson | Attorney Advertising

Written by:

Baker Donelson
Contact
more
less

Baker Donelson on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!