When FCA Cases Result in Criminal Charges

Anti-kickback and fraud cases have proliferated as regulators zero in on the hospice industry. How a hospice works with referral sources can be a red flag that brings providers face-to-face with criminal charges in False Claims Act (FCA) cases.

FCA suits can include significant legal repercussions for hospice providers such as imprisonment for committing health care fraud. In some cases, hospice leaders have been arrested for their roles, received several years or decades of prison sentences, or they have been barred from practicing all together.

Criminal FCA cases often involve issues related to kickback schemes in which hospices billed Medicare for services that patients either weren’t eligible for, or never received.

Advertisement

Patient referral streams can be at the core of kickback concerns that lead to criminal charges in fraud cases, according to Jennifer Weaver, attorney at health care law firm Waller and co-chair of its health care industry team.

“A typical False Claims Act case would be a medical necessity and eligibility dispute. When you see it escalate to criminal cases, most involve kickbacks,” Weaver told Hospice News. “That would be where a hospice is essentially paying for patient referrals just to sign people up for hospice and then not providing care, or it being conceived that way. The government is always very attuned to kickbacks cases. These are easier to financially prove, as opposed to medical necessity or eligibility, which are harder because they involve clinical judgment.”

Hospice organizations are under increasing legal and regulatory scrutiny related to medical necessity complaints under the FCA and the closely related anti-kickback statute. The statute prohibits the exchange of anything of value, or incentives that reward business referrals for services that are reimbursable by federal health care programs.

Advertisement

FCA cases most commonly center around questions of a patient’s eligibility for hospice care based on a six-month terminal prognosis, an area that the U.S. Centers for Medicare & Medicaid Services (CMS) and the U.S. Department of Health & Human Services Officer of the Inspector General (HHS-OIG) have been keeping a close watch on for several years running.

During the past few years, hospice leaders have faced millions in fines related to fraud cases, and some have been found guilty for their involvement in kickback schemes that included conspiracy to commit health care fraud.

To avoid flagging regulatory attention, providers need to ensure they are operating in compliance with the anti-kickback statute when it comes to their building and sustaining referral relationships, according to Weaver.

“Hospices need to ensure they are receiving patient referrals in a legitimate way,” said Weaver. “Carefully vet your agreements when you work with health care counsel in setting up patient referrals. Ensure contracts with physicians or health care systems are carefully documented and that you’re keeping good records to support services rendered. Be very careful in the way you set up those arrangements.”

Hospices with strong contracting standards have a better chance at managing risk, along with those that have compliance checks in place, according to Kathleen McDermott, partner at law firm Morgan Lewis. McDermott formerly served as the Assistant U.S. Attorney and U.S. Department of Justice Healthcare Fraud Coordinator.

An outside party’s clinical review on a regular basis to assess eligibility and length of stay is a good check on the quality of hospice services provided, said McDermott.

“Contracts should have consistent terms that are vetted by legal and compliance professionals and maintained up to date,” McDermott told Hospice News in an email. “Monitoring and auditing services is key as well. Any communications that suggest a physician is being offered a compensated medical director position for referrals risks an exposure scenario.”

The criminal anti-kickback statute is a major concern for hospices in particular, to the extent that they deal with referrals of patients from all kinds of sources, according to Christopher Sabis, member of the law firm Sherrard Roe Voigt & Harbison. Sabis heads its government compliance and investigations practice group.

Hospices need to carefully document how and why a patient comes on to their services, as well as how they bill for their care, Sabis told Hospice News.

Without careful documentation supporting a patient’s terminal condition, hospices risk giving the government leeway in escalating fraudulent allegations to criminal charges, he stated.

“Anti-kickbacks are a really big concern when you’re facing allegations of unnecessary care. It’s a statute that’s criminally enforceable,” Sabis said. “Questions about whether care is necessary [involve] whether it’s being billed with the right code, the right modifier. The government has [also] had a focus lately on electronic health record systems and fraud related to those systems, and some of that concern has been kickbacks.”

Companies featured in this article:

, ,