Deeper Than the Headlines: Pay Careful Attention to State False Claims Act

When most of us hear “False Claims Act,” we usually think of the Federal False Claims Act (FCA). This makes sense since the various amendments to the Federal FCA since the 1980’s have transformed the FCA into one of the biggest (and most effective) tools for the Federal Government to recover funds back into the public healthcare programs.

But, it’s important to remember that many states also have their own State version of a False Claims Act. Many times, it’s the States that are joining the legal action brought about by the Federal FCA cases. However, there are times that the States bring legal action on their own. This can be clearly seen when Medicaid Fraud Control Units are involved.

For example, a recent Maryland case, where it appears the State and its own False Claims Act were the driving forces in a settlement. The Maryland case was for $450,000 with a female family practice physician, Dr. Sabiha Mohiuddin, M.D (aka Dr. Mohi) in Frederick, Maryland. According to various news reports and public statements by Maryland authorities, the allegations settled in the case involved the upcoding of E/M visits for Medicaid patients as well as billing for services allegedly not provided.

The reports suggest the allegations occurred from January, 2007, through February, 2014. It was reported that Dr. Mohi was investigated during 2008 by a managed care organization and that they found she reported the highest level of care (“level 5 E/M”) 90% of the time. According to the complaint filed in Circuit Court, she received several warning letters and was audited three times between 2008 and 2014.

The state of Maryland claimed Dr. Mohi billed almost every patient visit at the highest level of care, regardless of the reason for the appointment. “As an example, someone might come in for a routine check-up and she would submit for a more complex level of care,” said Christine Tobar, a spokeswoman for the Attorney General’s office. “So, a Level 1 code would be billed as a Level 5.”

Allegedly, in February 2011, Mohiuddin submitted a high-level claim for a patient who came in for a standard medication refill. Four months earlier, she billed the state for an office visit with bloodwork results, despite no evidence that she had actually seen the patient at the time.

In addition to these upcoding allegations, it was suggested Dr. Mohi billed for services she could not have possibly provided since she did not have the specialized equipment or training to do so. For example, the state claimed she submitted claims for a special eye exam and retinal photography — two services that require special knowledge and specific ophthalmological equipment which she allegedly did not have.

Regarding the settlement, the Deputy Director of the Medicaid Fraud Control Unit, Jennifer Forsythe, stated, “We are happy to bring home a settlement and send a message to doctors and providers out there that we are watching your billing practice and we want to make sure that you are not falsely submitting claims to the Medicaid program.”

This settlement offers a lot of learning opportunities for those of us in healthcare compliance. As you design and implement your compliance program, remember to not only consider Federal initiatives and enforcement but also your State agencies and their priorities.