Unnecessary Diagnostic Tests Cost Doctors Millions in False Claims Settlements

Typically, when you feel sick, injured, or uncertain about a health condition you’re experiencing, you go to a doctor. 

After taking an appropriate medical history and performing a physical exam, if the doctor isn’t sure what’s going on, they’ll most likely order some diagnostic tests. Diagnostic tests are invaluable for physicians trying to confirm a diagnosis or patient condition. So, we usually don’t second guess the doctor when they order diagnostic tests. Unfortunately, a few doctors take advantage of the system and order too many or unnecessary diagnostic tests, usually with the intent of lining their pockets. Here are some recent examples.

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A cardiologist in Michigan recently agreed to settle an enforcement lawsuit with the U.S. government for $2 million to resolve allegations that he violated the False Claims Act by knowingly billing federal healthcare programs for diagnostic testing that was either unnecessary or not performed. The government alleged the doctor billed for unnecessary Ankle Brachial Index and Toe Brachial Index tests, known as ABI/TBIs, which were routinely performed on patients without first being ordered by a physician and without regard to medical necessity. The ABI compares blood pressure in the ankle to blood pressure in the arm to determine how well blood flows from the heart to the feet. The TBI is an additional measure to assess blood pressure readings at the toes.

The government’s investigation also focused on the provision of unnecessary Nuclear Stress Tests. Allegedly the cardiologist routinely ordered and provided unnecessary Nuclear Stress Tests to some patients. During a Nuclear Stress Test, they inject a small amount of radioactive tracer into a vein, then it’s detected by a special camera that produces images used to evaluate blood flow to the heart.

The U.S. Attorney prosecuting the case said, “Subjecting patients to unnecessary testing to fill one’s pockets with taxpayer funds will not be tolerated. Such practices are particularly concerning because overuse of some tests can be harmful to patients.”

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Pain Specialists

Physicians specializing in the treatment of pain usually order a lot of diagnostic tests. In Tennessee, some of these specialists recently settled for over $4 million to resolve allegations they ordered and performed diagnostic tests that were not appropriate.

The allegations were first brought to the government’s attention by whistleblowers who filed a lawsuit under the False Claims Act. They stated the doctors ordered medically unnecessary and/or non-reimbursable urine drugs, specimen validity, genetic and psychological testing. Allegedly in some cases, services were billed in the physicians’ name when they did not render or even order the testing.

The acting U.S. Attorney stated, “The United States will not hesitate to use all of its resources to protect taxpayer dollars, including by going after the individuals who reap the benefits, directly or indirectly, from health care fraud.”

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Nerve Conduction Studies

Another frequent type of diagnostic testing includes nerve conduction studies. Nerve signals are electrical impulses that travel quickly throughout the nervous system. Sometimes, problems with the electrical activity in nerves can cause pain, tingling, or weakness in the muscles. Nerve conduction studies measure how fast and how strong the electrical activity is in a nerve. The test can tell whether a nerve has been damaged.

A physician in North Carolina recently settled with the U.S. government for $500,000 to resolve allegations that he violated the False Claims Act by submitting medical claims for medically unnecessary nerve conduction diagnostic testing. The physician also entered into a corporate integrity agreement (CIA) with the OIG. A CIA is an ongoing monitoring plan so the government can make sure the physician practice is taking more compliant steps in the future to avoid unnecessary testing.

The government’s view of diagnostic testing is that the tests must be ordered for a patient to treat a specific illness or injury and must be individualized to the patient’s needs. In this case, the government alleged that the physician performed the nerve conduction studies without regard to medical necessity, as these tests were performed before any examination by the physician and therefore not tailored to the individual patient’s treatment. In addition, the government’s view was that unqualified staff at the physician’s office frequently performed the nerve conduction studies, despite coverage rules requiring a physician to perform the tests.

The U.S. Attorney involved in the case stated the physician “…devised a scheme to increase his profits rather than make medical decisions based on individual patient needs. We will not tolerate and will continue to search for any fraud that allows individual practitioners to wrongfully profit off taxpayer-funded healthcare programs.”

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In general, most physicians are ordering and performing diagnostic tests in an appropriate and patient-centered manner. However, these recent cases show that not all doctors are compliant when ordering and performing diagnostic tests. It may be wise for your compliance program to schedule appropriate audits of diagnostic services that your providers order or perform.


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