Module 05 Assignment - Fraud and Abuse Laws

Instructions: Read each scenario and decide if the actions taken by the company are considered fraudulent. After each scenario, state what law(s)/rule(s) were violated and explain your reasoning.

1. In June 2018, Healogics, Inc. agreed to pay up to $22.5 million to settle civil FCA allegations that it knowingly caused wound care centers to bill Medicare for medically unnecessary services. Healogics, a Florida-based company, manages nearly 700 hospital-based wound care centers across the country. Medicare covers hyperbaric oxygen therapy (HBO), a modality in which the entire body is exposed to oxygen under increased atmospheric pressure, as an adjunctive therapy to treat certain chronic wounds. The settlement resolved allegations that from 2010 through 2015, Healogics knowingly submitted or caused the submission of false claims to Medicare for medically unnecessary or unreasonable HBO therapy.

1. In June 2018, Health Quest Systems, Inc., Health Quest Medical Practice, P.C. ("HQMP''), Health Quest Urgent Medical Care Practice, P.C., ("HQUC") (collectively "Health Quest''); and Putnam Health Center ("PHC") entered into a settlement agreement to resolve their FCA liability. From April 1, 2009 through June 23, 2015, Health Quest submitted claims for evaluation and management services but did not sufficiently document the services to support the level of service billed. As a result, the services were billed two levels higher than supported by the medical record. From April 1, 2011 through August 2014, Health Quest submitted claims for home health services that lacked sufficient medical records to support the claim, including documentation of a face-to-face encounter with a physician. From March 1, 2014 through December 31, 2014, Health Quest subsidiary hospital, PHC, submitted allegedly false claims for inpatient and outpatient services referred to PHC by two orthopedic physicians. The two physicians had a direct financial relationship with PHC for providing administrative services and received compensation from PHC. The United States alleged their compensation exceeded the fair market value for the services. The United States further alleged that one purpose of the excessive compensation was to induce the above referrals to PHC. Health Quest and PHC agreed to pay $15.6 million and enter into a 5-year CIA.

1. In November 2017, a coder at Livewell Medical Center was investigated during an audit. It was discovered that the coder was asked by their manager to bill separately for a group of procedures that would normally be billed under one single comprehensive code in order to increase revenue for the medical center. The coder did not comply with their manager's request and continued to maintain the integrity of the codes.

1. In September 2018, the District Court for the Eastern District of Missouri entered a civil judgment in the amount of $5.5 million against a neurosurgeon, his fiance, and their professional corporations DS Medical and Midwest Neurosurgeons. The government's complaint and evidence at trial established that the neurosurgeon, who practiced through his professional corporation Midwest Neurosurgeons, used spinal implants when performing spinal fusion surgeries. His fiance started a spinal implant distributorship business called DS Medical in November 2008, after which he began using DS Medical as his spinal implant distributor for most of his spinal implant surgeries from 2009 through 2012. His fiance then received commissions on the expensive implants that he purchased from her company.

1. A release of information specialist at RC Hospital received a phone call from the spouse of a patient, pleading for copies of her husband's medical records. The release of information specialist did not have an authorization on file that was signed by the husband and did not have any paperwork on file to assume that the husband was incompetent and unable to sign for his own medical records. The release of information specialist informed the spouse that records could not be released without proper documentation and the patient's information was protected.