The government uses a variety of criminal statutes to prosecute health care fraud and abuse in addition to the more traditional ones such as the Anti-Kickback Statute and the Health Care Fraud Statute. The government does this oftentimes in an effort to increase the defendant’s sentencing exposure.
In a September 25, 2014 press release, the U.S. Attorney’s Office reported that the owner of a home health care agency in Texas was sentenced to five years in prison for his role in a conspiracy to structure the withdrawal of over $1.8 million from the company’s bank in violation of 31 U.S.C. 5324. The defendant and his wife, who was the director of nursing at the agency, withdrew just under $10,000 in cash from the bank account on nearly 300 occasions in order to avoid the bank’s mandatory reporting requirements of cash transactions of more than $10,000. The defendant then used the money to to pay recruiters in exchange for referring Medicare patients to the agency and to doctors for authorizing home health services that were not medically necessary or provided. A defendant convicted of illegal structuring faces a sentence of five years’ incarceration and a fine of $250,000 for each structured transaction, both of which can be doubled if the defendant is involved in a pattern of structuring that exceeded $100,000 over a twelve month period of time.
In a September 24, 2014 press release, the U.S. Attorney’s Office reported that a medical doctor in East Islip, New York plead guilty to the illegal distribution of oxycodone for issuing a prescription to a patient the doctor knew was using illegal narcotics and abusing pain killers, in violation of 21 U.S.C. 841. Under the Federal Sentencing Guidelines, the penalty for distributing actual oxycodone is the equivalent of a defendant distributing 670% more of heroin
Pharmaceutical manufacturers who offer copayment coupons to insured patients to reduce or eliminate the cost of their out-of-pocket copayments for specific brand-name drugs may run afoul of the Anti-Kickback statute, says the OIG in a September 2014 Special Advisory Bulletin. http://oig.hhs.gov/fraud/docs/alertsandbulletins/2014/SAB_Copayment_Coupons.pdf.
The anti-kickback statute makes it a criminal offense to knowingly and willfully offer, pay, solicit or receive any remuneration to induce or reward the referral or generation of business reimbursable by any Federal Health care program. Thus, if copayment coupons are used by Medicare Part D beneficiaries to defray the cost of their drug purchases, the anti-kickback statute is implicated since the copayment coupon has the effect of inducing the beneficiary to purchase the drug to which the coupon applies.
The pharmaceutical industry already places warnings on its copayment coupons that they may not be used by beneficiaries of Federal health care programs. Nonetheless, this new Special Advisory Bulletin makes it plain that OIG does not believe that these warning go far enough. OIG found that there are insufficient mechanisms in place in the processing of claims to ensure that the coupons are not used by Part D beneficiaries because the “coupons are not transparent in the pharmacy claims transaction system to entities other than manufacturers, which impedes Part D plans and others from identifying and monitoring the use of coupons for drugs paid for by Part D.” Thus, pharmaceutical manufacturers will have to come up with a way to make copayment coupons universally identifiable in pharmacy claims transactions to stay compliant with the anti-kickback statute.
Thursday, September 18, 2014
OIG has published an on-line pamphlet called “A Roadmap for New Physicians, Avoiding Medicare and Medicaid Fraud and Abuse.” http://oig.hhs.gov/compliance/physician-education/roadmap_web_version.pdf. In it, the OIG provides physicians with an overview of the five primary health care fraud and abuse laws: (1) False Claims Act; (2) Anti-Kickback Statute; (3) Physician Self-Referral (“Stark”) Law; (4) Exclusion Statute; and (5) Civil Monetary Penalties Law. The aim of the pamphlet is to help physicians avoid running afoul of the law in connection with their relationships with (1) Payers, such as Medicare and Medicaid; (2) Fellow Providers, including physicians, hospitals, nursing homes and other providers; and (3) Vendors, including the Pharmaceutical and Medical Device Industries. The pamphlet is only 31 pages in length and provides the reader with examples of what conduct not to engage in and, equally importantly, the mindset of OIG as it continues to ramp up its investigations of health care fraud allegations.
OIG is stepping up audits of small health care providers who bill Medicare. For example, OIG just completed an audit of a physical therapy provider in Illinois who submitted 4,298 claims to Medicare for reimbursement in 2011 that totaled $645,966. Of the 4,298 claims, OIG audited just 100 of them and concluded that 99 out of the 100 sampled did not comply with various Medicare standards. As a result, OIG is demanding that the physical therapy provider reimburse Medicare $634,837! To avoid being forced to reimburse Medicare or Medicaid for claims received, the small physical therapy provider is reminded to follow the standards contained in the Medicare Benefit Policy Manual, chapter 15, § 230.
OIG is cracking down on fraud and abuse involving HIV drugs which can cost Medicare up to $1,700/month for a single beneficiary. In an August 6, 2014 Podcast, OIG described two schemes involving HIV drugs. In one scheme, people exchanged HIV drug prescriptions for cash or other drugs. Then, a colluding pharmacy would bill the patient’s insurance company, sometimes Medicare or Medicaid, for the HIV drugs without actually filling the prescription. The fraudulent pharmacy also bills for the prescribed refills without actually dispensing the drugs.
In the second scheme, the pharmacy dispenses the HIV drugs to the patient who then sells them to a runner who, in turn, takes the drugs to a fraudulent pharmacy or fraudulent drug wholesaler. The fraudulent pharmacy or wholesaler then either ships the HIV drugs out of the country or sells them to uninsured people in the U.S. In some instances, corrupt pharmacies buy the HIV drugs on the black market and re-package and dispense the drugs to unsuspecting HIV patients.