Warding off fraud suits after CMS physician payment revelations

The release of Medicare’s payments to doctors could impact medical practices and health systems in a lot of ways, including being fodder for fraud accusations – a problem that’s worth getting ahead of from the get-go.

Amid seemingly increasing healthcare fraud lawsuits and whistle-blower allegations, expect many lawyers, employees or former employees to go through the Medicare payment data looking for hints of aberrant billing trends.

But don’t expect that to be the sole source of evidence they can use, said Michael Matthews, a partner with the law firm Foley & Lardner who has represented health organizations on the receiving end of False Claims Act suits.

The FCA does not permit private whistle-blowers to sue based only on publicly available information; there has to be some sort of insider knowledge of wrongdoing, Matthews said.

“However, people who do have some knowledge, say some former employee looking to sue their former employer anyway, who may not have full knowledge of billing or no longer has access to billing, they may look at this data and be able to bolster their case,” Matthews said.

“As an FCA defense litigator, I would argue that nobody is going to be able to use this data alone to bring a claim that they otherwise would not be able to bring, but they are going to try, and certainly where they have other direct and independent knowledge,” he said.

The new payment data might also be able to help would-be whistle-blowers in states where federal appeals courts have set higher standards for evidence for FCA cases.

The U.S. Supreme Court recently declined to weigh in on how many and what kinds of details are needed to bring FCA cases, leaving the circuit courts fairly evenly split, Matthews said.

In the 4th, 6th and 11th circuits, covering the lower Mid-Atlantic, the Southeast and parts of the Midwest, the payment data may not have much of an impact. Those courts have required details such as the date of a claim’s submission (for instance to try to show billing while a provider was on vacation), and dates aren’t included in the Medicare reimbursement files just released, Matthews said.

But in the 1st and 9th circuits, covering eastern New England and the West Coast, courts have generally required less detail in allowing cases to continue – although Matthews cautioned that even within circuits, there are conflicting precedents.

Potential whistle-blowers may also have other options to use the payment data.

The FCA does not bar the government from relying solely on publicly available information, so individuals who suspect fraud but do have not inside knowledge of it might be able to do analysis of the data and convince the Department of Justice to take up the cause.

“Several years ago,” Matthews said, “the standards for issuing civil investigative demands became less centralized,” meaning that lower-level DOJ attorneys can look into potential fraud and request documents from companies and organizations.

Regardless of how useful the data is to plaintiffs or who files the suits, though, it would behoove health systems and medical practices to address the data head on.

“Providers should consider examining the data published about them to make sure that it’s accurate, and should be prepared to respond to accusations, either in court or in the court of public opinion, certainly in the short term, about why the data reflects what it does,” Matthews said.

“For most providers, there are innocent explanations for why their payments appear large.”

Others would recommend going a few steps further.

David Crais, a certified medical practice executive who also helped start a diabetes care network called Diabetes Assessment and Management Centers, said practices should analyze their payment data and compare where they rank compared to other practices in a 100-mile radius.

Health systems and practices should try to benchmark their physician payments locally and nationally, said Crais, who now works on accountable care issues.

And in the long term, to ward off fraud accusations and Medicare auditors, Crais argues they should try to tackle a larger issue – making sure clinical notes detail the severity of cases for conditions to support evaluation and management coding.