Deeper Than the Headlines: Civil Monetary Penalties We'd All Like to Avoid

Often times, it’s only the biggest dollar amount settlements that make the headlines in healthcare compliance. When that’s the case, it’s usually a Department of Justice press release announcing a multi-million dollar settlement.

But these aren't the only kinds of enforcement that are taking place in healthcare compliance. Sometimes, the Department of Justice might not be the enforcing agency. Remember that the Office of Inspector General (OIG) has the authority to seek civil monetary penalties (CMPs), assessments and exclusion against an individual or entity based on a wide variety of prohibited conduct. If a CMP case is resolved through a settlement agreement, the settling party has contested the OIG's allegations and denied any liability. In those scenarios, no CMP judgment or finding of liability has been made against the settling party. But there is still much to learn from such situations.

The settlements tend to be for less money but for small practices or organizations, the legal costs, the disruption of operations and the settlement amounts are significant, especially when considering that standard compliance program activities probably could have prevented them from happening in the first place. Let’s take a look at a few recent examples:

Ohio Skilled Nursing Facility Settles Case Involving Excluded Individual

On August 2, 2018, Ireland Health Care Center, Inc. d/b/a Singleton Health Care Center (SHCC), Cleveland, Ohio, entered into a $45,735.42 settlement agreement with OIG. The settlement agreement resolves allegations that SHCC employed an individual who was excluded from participating in any Federal health care program. OIG's investigation revealed that the excluded individual, a licensed practical nurse, provided items or services to SHCC's patients that were billed to Federal healthcare programs.

Maine Chiropractic Practice Settles Case Involving Excluded Individual

On August 2, 2018, Gerrish Chiropractic Center (GCC), Bar Harbor, Maine, entered into a $7,019.10 settlement agreement with OIG. The settlement agreement resolves allegations that GCC employed an individual who was excluded from participating in any Federal healthcare program. OIG's investigation revealed that the excluded individual, an office manager, and chiropractic assistant, provided items or services to GCC's patients that were billed to Federal health care programs.

New Jersey Pediatrician Settles Case Involving False Claims

On July 2, 2018, Rashmi Sandeep, MD (Dr. Sandeep), Brick, New Jersey, entered into a $336,298.52 settlement agreement with OIG. The settlement agreement resolves allegations that Dr. Sandeep knowingly presented to Medicaid, through certain New Jersey Medicaid Managed Care Organizations (MCOs), claims for items or services that she knew or should have known were not provided as claimed and were false or fraudulent. Specifically, OIG alleged that Dr. Sandeep:

1. submitted or caused to be submitted claims for items or services provided to Medicaid beneficiaries, who were enrolled with certain MCOs, in which Dr. Sandeep failed to personally perform or directly supervise services billed under her NPI number because she was either not present in the United States or was otherwise not in the State of New Jersey;
2. caused the resubmission of previously denied claims for items or services provided to Medicaid beneficiaries enrolled with a particular MCO by identifying herself as the rendering provider when, in fact, she was not; and
3. submitted or caused to be submitted claims for items or services provided to Medicaid beneficiaries enrolled with a particular MCO under her NPI number for services performed by non-credentialed providers who were not supervised by Dr. Sandeep.

Vermont Physician and Practice Settle Case Involving Excluded Individual

On July 2, 2018, William H. Newman, M.D., and Allergy & Asthma Specialists of Northern Vermont, P.C. (collectively, "Dr. Newman"), entered into a $61,142.96 settlement agreement with OIG. The settlement agreement resolves allegations that Dr. Newman employed an individual who was excluded from participating in any Federal health care program. OIG's investigation revealed that the excluded individual, a registered nurse, provided items or services to Dr. Newman's patients that were billed to Federal health care programs.

California Physician and Practice Settle False and Fraudulent Claims Case

On June 11, 2018, James S. Dunn, Jr., MD, d/b/a Auburn Urogynecology and Women's Health (collectively, "Dr. Dunn"), Auburn, California, entered into a $419,578 settlement agreement with OIG. The settlement agreement resolves allegations that Dr. Dunn submitted claims to Medicare for items or services that he knew or should have known were not provided as claimed or were false or fraudulent. Specifically, OIG contended that Dr. Dunn submitted claims for:

1. diagnostic electromyography services using CPT Code 51784 and diagnostic anorectal manometry using CPT Code 91122 when therapeutic, not diagnostic, services had been provided;
2. pelvic floor electrical stimulation that was not preceded by a four-week course of failed pelvic muscle exercise training; and
3. pelvic floor physical therapy services that were provided by an unqualified individual.

It was reported that the OIG's Consolidated Data Analysis Center collaborated on this settlement which might mean the issues were identified through data analytics.

Compliance officers reading these summaries can see how implementing some of the best practices of an effective compliance program might have been able to prevent these problems. For example, regular performance of exclusion checks might have identified the excluded individuals employed by some of the organizations which some of the billing and claims issues might have been identifiable through regular auditing and monitoring programs.