While the health care industry has accounted for a large portion of settlements and judgments involving fraud and False Claims Act (FCA) liability in recent years—68 percent of the United States’ $3.8 billion recovery in 2013 and 40 percent of the $5.69 billion recovery in 2014—the U.S. Department of Health and Human Services Office of Inspector General (OIG) and the U.S. Department of Justice (DOJ) have been primarily focused on hospitals, health care systems and large health care companies. However, recent settlement and enforcement trends reiterate that individual physicians and smaller practice groups are not immune to qui tam whistleblowers and direct investigation by the OIG.
Such was the case for Garden State Cardiovascular Specialists, P.C., (Garden State) a 12-physician group in New Jersey that just last week reached a $3.6 million settlement in United States ex rel. Cheryl Mazurek v. Garden State Cardiovascular Specialists, P.C. et al., Civil Action No. 10-4734 (D.N.J.). The settlement resolved sealed allegations that Garden State’s physicians and their NJ Medcare / NJ Heart facilities submitted claims to Medicare for various cardiology diagnostic tests and procedures (including stress tests, cardiac catheterizations and external counterpulsation). The case against Garden State and two of its principal physicians was brought by Cheryl Mazurek, who worked for Garden State’s third-party billing and coding vendor, MediGain Inc. Mazurek’s claims against MediGain, also filed under seal, have not yet been resolved.
The OIG Work Plan, complemented by a Mid-Year Update last month, echoes the increased focus on issues that directly implicate physicians operating independent of hospitals and larger companies. For example, the OIG is reviewing physician coding on Medicare Part B claims for services performed in ambulatory surgical centers (ASC) and hospital outpatient departments to determine whether they properly coded the places of service. Because Medicare reimburses physicians at a higher level when services are performed in a non-facility setting (e.g., a physician’s office) versus services performed in a hospital outpatient department or (with some exceptions) in an ASC, the OIG will be closely scrutinizing site of service this year and beyond.
Whether on the billing/coding side of the equation, medical necessity or any number of focus areas for DOJ and the OIG, physicians and practice groups (even small ones) should be keenly aware of their compliance obligations under the current FCA regime. For a quick refresher on fraud enforcement trends for 2015 and beyond (along with some practical tips), you may find this article to be a helpful resource.