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

When submitting medical bills to Medicare, it is important to note that for a Medicare claim to be paid (and retained after an audit), certain requirements must be met. For instance,

(1)   There must exist sufficient documentation in the provider’s records to verify that the services were provided to eligible beneficiaries;

(2)   Medicare’s coverage and billing requirements must be met (including that requirement that the services be reasonable and necessary); and

(3)   Services must be provided at the appropriate level of care and must be coded correctly.

These requirements are especially important where providers receive Additional Documentation Requests (“ADR’s”) from Medicare contractors or are subject to an audit. It is important to note that, upon request by a Medicare contractor (including a Recovery Audit Contractor), medical documentation must be submitted within forty-five days of the date of the request. If the provider (a) fails to submit documentation or (b) provides insufficient documentation for the services billed, Medicare takes the position that that there is no justification for the services or level of care billed and will either deny the claim or consider any prior payment an “overpayment” and request that the provider repay the amount previously paid on the claim. Moreover, now that Medicare’s RAC program has been extended to each state, ensuring that your medical practice is compliant with Medicare’s documentation requirements is an absolute necessity.

More importantly, in addition to Medicare and Medicaid, medical practices must be mindful of documentation requirements imposed by their state and federal government.  Accordingly, when evaluating a practice’s medical records and medical documentation, providers are encouraged to conduct internal audits and investigations, and identify corrective actions that promote compliance with all of the administrations and agencies that regulate medical practices.

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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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