Evaluation and management (E/M) services have been called “the core” of healthcare billing.[1] E/M is a catch-all claim, allowing medical professionals to bill for diagnosing or treating nearly any illness or injury. E/M is also divided into fairly subjective levels depending on complexity, and the differences between levels is often merely a difference of opinion. While the DOJ has brought cases based on disputes over E/M services before, those cases are typically civil and part of a more complex upcoding or unbundling scheme.[2] This is because nearly everything involving some effort expended by a physician could arguably justify that physician believing the E/M service was proper, and therefore criminal cases requiring scienter evidence that proves the case beyond a reasonable doubt are incredibly rare.
Yet one of those rare cases went to trial this month.
Dr. Rob Elfenbein of Maryland operated a series of drive-through testing sites during the COVID-19 pandemic that served all types of patients. These sites billed payors for COVID-19 tests, as all testing sites did during the pandemic, but Dr. Elfenbein’s testing sites added on a claim that ultimately ended up being very bad for the physician: an E/M code for each patient receiving a test. Those E/M claims added up quickly: Dr. Elfenbein’s drive-through testing sites billed over $30 million to payors for E/M claims accompanying COVID-19 tests, according to the Justice Department.[3]
A physician billing an E/M code in conjunction with an office visit is totally normal, but conducting E/M services in the midst of being swabbed for COVID-19 while still in one’s vehicle is something the government must have felt jurors could appreciate the wrongfulness of, and so the Justice Department took the rare step of criminally indicting Dr. Elfenbein, alleging health care fraud.[4]
From court documents, it appears the government argued that Dr. Elfenbein knew that the patients whose insurance would be billed for E/M services would be with physicians “less than five minutes,”[5] and that Dr. Elfenbein told employees that E/M services were “the ‘bread and butter’ of how we get paid.”[6] It also appears that Dr. Elfenbein’s defense was at least in part based on argument that E/M services are medically necessary when patients present for COVID-19 testing, relying on an expert from the Johns Hopkins University School of Medicine.[7] Another defense by Dr. Elfenbein was that the language describing the specific E/M codes submitted at the direction of Dr. Elfenbein contemplates the types of involvement that the physicians stationed at the drive-through clinics had with the patients.[8]
Nevertheless, on August 4, 2023, a federal grand jury convicted Dr. Elfenbein of the sole count charged: healthcare fraud.
The problem now for Dr. Elfenbein is that the calculations under the U.S. Sentencing Guidelines are sure to result in a very high advisory range at sentencing. A loss amount above $9.5 million for a physician carries a huge penalty in the form of both standard loss amount points and extra health care program points. And so Dr. Elfenbein is at risk of being sentenced to federal prison for an extended period of time.
But it is possible that the Justice Department’s sparse track record of criminally prosecuting physicians relating to E/M disputes, opting instead for resolutions involving the civil False Claims Act (and thus involving no potential for prison time), could be grounds for the court departing downward at sentencing. After all, given that the Justice Department has allowed similarly situated defendants to Dr. Elfenbein to resolve their liability with False Claims Act settlements,[9] imposing criminal liability and penalties that would subject Dr. Elfenbein to the better part of a decade in prison would be a pretty meaningful disparity the sentencing court may want to rectify with leniency.
[1] “Coding for Evaluation and Management Services: Answers to Common Questions,” American Academy of Family Physicians, available at https://www.aafp.org/family-physician/practice-and-career/getting-paid/coding/evaluation-management.html.
[2] See, e.g., “Georgia urgent care chain agrees to pay $1,600,000 to resolve False Claim Act allegations,” U.S. Department of Justice, Press Release, June 20, 2023, available at https://www.justice.gov/usao-ndga/pr/georgia-urgent-care-chain-agrees-pay-1600000-resolve-false-claim-act-allegations.
[3] United States v. Elfenbein, 1:22-cr-146, Doc. 29, ¶ 30i (D. Md. Jan. 11, 2023).
[4] Id.
[5] Id., ¶ 30f.
[6] Id., ¶ 30g.
[7] Id., Doc. 39 at 4.
[8] Id.
[9] See, e.g., See, e.g., “Georgia urgent care chain agrees to pay $1,600,000 to resolve False Claim Act allegations,” U.S. Department of Justice, Press Release, June 20, 2023, available at https://www.justice.gov/usao-ndga/pr/georgia-urgent-care-chain-agrees-pay-1600000-resolve-false-claim-act-allegations (False Claims Act settlement for physician group accused of billing “Evaluation and Management claims to Medicare for the testing and treatment of patients with suspected exposure to COVID-19”).
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