Deeper Than the Headlines: Northwest ENT Agreed to Pay $1,195,361 in False Claims Act Violations

On August 3, 2018, the Department of Justice announced a settlement with the physician practice Northwest ENT Associates, in Georgia. Northwest ENT agreed to pay $1,195,361 to resolve allegations that it violated the False Claims Act by submitting claims for sinus dilation procedures in which it reused balloon catheters that were intended for single use only. The sinus dilation procedures in question are coded with CPT codes 31295, 31296 and 31297.

The procedures were intended for the treatment of sinusitis with a “balloon catheter,” which is inserted into the patient’s sinus and inflated by the physician to enlarge the sinus cavity. The balloon catheters that Northwest ENT used was cleared by the U.S. Food and Drug Administration as intended for single use only. Despite this, the physicians at Northwest ENT re-used the devices on their patients, instead of using a new device for each patient. The civil settlement resolves the government’s investigation into these allegations.

The government alleged that Northwest ENT violated the False Claims Act, by causing the submission of false claims to Medicare, TRICARE, and Federal Employee Health Benefit Plans for sinus dilation procedures during the period March 1, 2011, through March 30, 2012, in which the single-use balloon catheters were re-used on their patients.

In addition, pursuant to a Non-Prosecution Agreement with the United States, Northwest ENT has accepted responsibility for its actions. It has entered into a three-year Integrity Agreement with the Office of the Inspector General of the Department of Health and Human Services. Under the agreement, an independent organization will review Northwest ENT’s claims quarterly for medical necessity, accurate coding, and safe and appropriate use of medical devices.

A copy of the corporate integrity agreement (CIA) has been posted on the OIG’s website. Taking a closer look at the CIA can help your compliance program meet the expectations of the OIG. Some of these expectations, as shown in the CIA, include:

Compliance Officer:

Appointment of a Compliance Officer who is an employee and a member of senior management of Northwest ENT.

The Compliance Officer must report directly to the Board of Directors of Northwest ENT, and shall not be or be subordinate to the General Counsel or Chief Financial Officer or have any responsibilities that involve acting in any capacity as legal counsel or supervising legal counsel functions for Northwest ENT.

The Compliance Officer is responsible for:

  • developing and implementing policies, procedures, and practices designed to ensure compliance with Federal health care program requirements
  • making periodic (at least quarterly) reports regarding compliance matters to the Board of Directors of Northwest ENT and shall be authorized to report on such matters to the Board of Directors at any time.
  • monitoring the day-to-day compliance activities engaged in by Northwest ENT. Any noncompliance job responsibilities of the Compliance Officer shall be limited and must not interfere with the Compliance Officer's ability to perform his/her duties.

Policies and Procedures:

  • Northwest ENT shall develop and implement written policies and procedures regarding appropriate billing and medical record documentation for compliance with Federal health care program requirements.
  • Northwest ENT shall enforce its Policies and Procedures and shall make such compliance an element of evaluating the performance of all employees.
  • The Policies and Procedures shall be made available to all Covered Persons.
  • At least annually (and more frequently, if appropriate), Northwest ENT shall assess and update, as necessary, the Policies and Procedures. Any revised or new Policies and Procedures shall be made available to all Covered Persons.

OIG Hotline:

Northwest ENT shall post in a prominent place accessible to all patients and Covered Persons a notice that provides the name and phone number of the Compliance Officer and the HHS OIG Fraud Hotline telephone number (1-800-HHS-TIPS) as a confidential means by which suspected fraud or abuse in the Federal health care programs may be reported.

Training and Education:

  • All Covered Persons shall receive at least three hours of training during the first Reporting Period. Any individuals who become Covered Persons after the Effective Date and shall receive at least three hours of training within 90 days of becoming a Covered Person.
  • Training may be completed in-person or online. These training requirements may be satisfied only by the completion of courses provided by the Centers for Medicare & Medicaid Services (CMS) Medicare Learning Network (MLN), Northwest ENT's Medicare contractor, or other training courses that are submitted to OIG, prior to registration for the training course, for review and approval.

At a minimum, the required training sessions must include the following topics:

  • the Federal health care program billing, coding and claim submission statutes, regulations, and program requirements and directives relating to the items or services furnished by Northwest ENT
  • the Federal health care program medical record documentation requirements relating to items or services furnished by Northwest ENT
  • the personal obligation of everyone involved in the medical record documentation and claims submission processes to ensure that medical records and claims are accurate
  • Northwest ENT shall maintain written documentation (e.g., written or electronic certificates of completion from the training provider) that all Covered Persons required to receive training have in fact completed such training. The documentation shall specify the type of training received, the individual who completed the training, and the date received.

These are just a few of the examples of compliance program requirements by the OIG because of the CIA. Fortunately, most of you reading this are not under a CIA, but by reviewing this and other CIAs, compliance officers can get a glimpse of the type of compliance programs the OIG might expect your organization to have.

Questions or Comments?