Health Care Compliance Watch : New York Health Care Compliance Lawyer & Attorney : Ilana Sable : NY Physician Representation Law

While Congress continues to tackle the difficult decision of when (not “if”) to implement a 21% cut in Medicare payments to physicians, medical practices are facing the equally difficult decision of whether they can afford to keep treating Medicare patients.

On June 24, the House of Representatives passed a six month deferral of the proposed 21% cuts in the Medicare physician fee schedule and retroactively reversed the June 1, 2010 payment cut for 6 months. Physicians were also given a 2.2% fee schedule increase. This temporary deferral marks the tenth time in less than eight years that Congress has blocked the proposed 21% cut in Medicare payments to physicians. Although Congress has pushed the proposed cuts a bit further down the road, the deferral is nothing more than a temporary fix. The Medicare Trust is rapidly depleting and lawmakers have no long term option other than to drastically reduce the country’s Medicare spending.

The bigger issue is that even without the proposed 21% payment cut, physicians across the country have been facing the hard business decision of whether they can afford to keep treating Medicare payments for several years. Many doctors – mainly primary care physicians such as internists and gynecologists – have increasingly stopped treating Medicare patients due to Medicare’s low reimbursement rates, growing demands for supporting medical documents and audits. On average, Medicare pays providers approximately 78% of what commercial insurers pay yet demands a great deal more effort and time in receiving, and often times retaining, payment for services rendered. Plus, with the advent of the RAC program, physicians are finding that they need what amounts to a secondary degree in billing and coding just to stay ahead of the audits and recoupments.

The end result: an increasing amount of physicians are choosing to put the needs of their medical practices above the needs of their senior patients and have either stopped accepting new Medicare patients or have opted-out out of the Medicare program entirely. According to the Centers for Medicare and Medicaid Services, approximately 10 % of physicians have opted out of the Medicare program, with the number of physicians opting-out of the program steadily rising ever year.

If your practice is considering reducing the amount of Medicare patients that it accepts or opting-out of the Medicare program entirely, there are several critical questions that must be asked an evaluated when making these decisions.

·         How much time, effort and secondary support (including staff members and physicians) is allocated toward preparing, processing and submitting medical bills to Medicare? 

·         How much time, effort and secondary support (again, including staff members and physicians) goes into requests for supporting documents and audits? 

·         On average, how do Medicare reimbursement rates measure up against reimbursement rates from commercial carriers for: (a) rate of claims paid and (b) amount paid on claims?

·         How much additional time would physicians and staff members have to allocate toward other projects if the practice reduced or eliminated its treatment of Medicare patients?

·         Would the practice require less staff, space and/or secondary support if it reduced or eliminated its treatment of Medicare patients? 

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On June 4, 2010 the U.S. Department of Justice announced the recovery of $2.85 million dollars from three New York City ambulance companies – SEZ Metro Corp., SEZ North Corp. and Big Apple Ambulance Service Inc. – to resolve false claims made to Medicare under the False Claims Act (“FCA”). The FCA gives the federal government (as well as private citizens) a cause of action against those who submit false claims to the government by and through its various agencies and/or departments. In this case, the Justice Department alleges that the ambulance companies used, or caused the use of, false records to appeal a large scale Medicare program refund demand.

Under Medicare rules, ambulance companies can lawfully bill the Medicare program for non-emergency transports only if a patient cannot be transported by any other means. Here, Medicare audited the ambulance companies past billings – audits that can go as far back as seven years under some circumstances – and concluded that the ambulance companies had charged Medicare tens of millions of dollars for ambulance trips that did not meet the standards required by the Medicare rules. When Medicare demanded a refund the ambulance companies proceeded by disputing Medicare’s decision through the Medicare appeals process and, in support of their appeals, submitted false claims by causing hundreds of forged letters purported to come from health care providers that attested to the need and medical necessity of the non-emergency ambulance transports.

This action was originally filed by a whistleblower – a private citizen who was the former financial officer for one of the ambulance companies – under the qui tam provision of the false claims act. The qui tam provisions permit private citizens to file suit on behalf of the United States and share in any recovery. Here, the former financial officer’s share of the settlement will be $618,450.00.

It is unclear whether the original Medicare audit that prompted this case was a product of Medicare’s recently instituted Recovery Audit Contractor (RAC) program.

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