Circumventing Exclusion from Insurance Carrier Networks: A Formula for the Fraudulent Practice of Medicine
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Health care providers who have been excluded from participation with certain insurance carriers often approach me for guidance concerning their options (if any) for continuing their existing relationships - and possibly treatment – with patients who are insured by the “excluding” insurance carrier. While the reasons for “exclusion” are quite varied and have differing degrees of severity (depending on the particular insurance carrier and type of exclusion that is involved), in almost all cases, exclusion from network participation means that the excluded provider cannot treat patients insured by the excluding insurance carrier, whether directly or indirectly. Provider arrangements made to circumvent exclusion may, among other things, be deemed the “fraudulent practice of medicine” and may carry serious, permanent, consequences for both the excluded provider and any provider assisting the excluded provider with the circumvention.
In the Matter of Josifidis v. Daines, 2011 NY Slip Op 7891 (decided November 10, 2011, Appellate Division, Third Department) the Third Department confirmed a determination of the Hearing Committee of the New York State Board for Professional Medical Conduct (the “Committee”) which, among other things, revoked the medical license of Petitioner Harry Josifidis (the “Excluded Provider”) for the fraudulent practice of medicine. In doing so, the Third Department confirmed the Committee’s finding that the Excluded provider circumvented “his exclusion from insurers’ networks by using another physician’s name.”
The relevant facts underlying the Third Department’s decision are as follows:
“[The Excluded Provider] was excluded by certain health insurers from being reimbursed as an in-network provider for treatment rendered to their insureds as the result of a prior disciplinary action. [The Excluded Provider] thereafter entered into an agreement with another physician (hereinafter the other physician) by which the other physician’s name appeared on claims submitted to the insurers for [the Excluded Provider’s] treatment of in-network patients.
The Excluded Provider, in an effort to “explain” the legality of the circumvention arrangement, argued that “he relied on the other physician’s representations that their arrangement was ‘lawful and appropriate’” and that “he entered the agreement to provide his patients with continuity of care rather than for profit.”
The Third Department concluded that “[s]ubstantial evidence in the record shows that [the Excluded Provider] repeatedly submitted bills in the other physician’s name for services he had provided in order to receive payment from insurers who had specifically excluded him from being reimbursed for such services…. Accordingly, [the Third Department found] that the Committee properly rejected [the Excluded Provider’s] explanation and substantial evidence in the record supports its determination.”
Health care providers participating in governmental health care programs, including Medicare or Medicaid, must confirm, when employing or contracting with a physician, employee, vendor or other affiliated party, that the individual or entity is not excluded from participation in any governmental health care program. 