How Not to Wind Up Like MIDI and West Valley

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This morning I popped in on a session focused on Medicare fraud and abuse. Stuart Langbein, JD, offered “tales from the front line” – and as a lawyer dealing with Medicare fraud issues, he had plenty of material to discuss. “There’s been a lot of attention paid in the past decade to health care fraud and abuse, and I think we’re only going to see that continue,” he said. “Congress is going to pump more money into fraud and abuse efforts with health care reform.”

Langbein explained that we can examine the language in both the House and Senate versions of the health care bill in order to know what to expect, although once the two versions come together, “It’s going to be wild wild west. But what you’re going to see, I believe, is heightened fraud and abuse authorities and funding. And the reason for that is money.”

In the Senate finance bill, for instance, there’s talk about changing the “intent” standard in the anti-kickback statute. If the “intent” standard is made more lenient, it will be easier for the government to generate settlements from anti-kickback cases. The physician disclosure requirement in the Senate bill, which would apply to MR, CT and PET referrals, requires that the physician disclose to the patient that he or she can get an MRI from another area facility and offer a list of those facilities. “You don’t have to tell the patient that you have a financial interest,” he said. “You just have to tell the patients they can get it elsewhere.”

In the House bill, there is a disclosure protocol for Stark violations; there’s also a requirement for compliance programs, which does not extend to physician offices but would apply to IDTFs. “That doesn’t sound so bad, but there’s a lot of resources it takes to put those together,” he said.

Moving on to what’s currently happening on the investigation side, Langbein explained that examining recent OIG settlements can provide clues as to what kind of behavior they’re going after. The OIG’s current workplan includes an ongoing review of claims for x-rays in emergency departments for appropriateness of payments for the test and the interpretation. They’re also going to be looking more broadly at payments for imaging services, including the equipment utilization rate – a hot-button topic with the new MPFS.

And then there’s West Valley Imaging. “I’m going to be talking about mostly allegations,” he stressed. “Nobody admitted any wrongdoing, but let’s talk about what the government claimed so you can know what they’re looking for.” West Valley, a radiology service jointly owned by two radiologists, provides a range of imaging services; it seems as if the government started its investigation because one of the owners allowed a staff radiologist to bill under the owner’s billing number. “That lets the government know that something’s not right,” he said. “And once they’re under the hood, you never know what they’re going to find.”

What they found was that there were physician orders missing from the patient files, and some of the orders for imaging services weren’t even in the medical records. The outcome was a $2 million settlement – it was initially negotiated for $900,000, but the OIG wanted more – and a five-year corporate integrity agreement. “There are very resource-attentive agreements that you have to enter into to stay with federal health care,” he said. “It’s really the government’s way of putting you under probation.” An independent review organization audits 120 claims per year at West Valley’s expense; there’s also compliance training and report submission, all on WV’s dime. “These are very common in settlements, and they’re coming more and more to suppliers and physician practices.”

Other recent and ongoing cases include the Reddy Solutions case, where the president of the company was arraigned on federal fraud charges because of the actions of the company, which provided radiology coverage to hospitals without full-time radiologists. Reddy’s team accessed the reports remotely, and the allegation is that the physicians signed reports without reading them or reports were reviewed by non-physicians. “To those of you in the hospitals, you really have to be careful,” he said. You don’t want to get dragged down by your relations with another company. Jail time for this could be 20 years.”

Another ongoing investigation is MedQuest, where an individual, an employee of the company, started the investigation, and the government took over. The allegation is that