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5 Key Acts to Avoid Medical Fraud and Abuse


5 Key Acts to Avoid Medical Fraud and Abuse

The five most important Federal fraud and abuse laws that apply to physicians are the False Claims Act (FCA), the Anti-Kickback Statute (AKS), and the Physician Self-Referral Law (Stark law), the Exclusion Authorities, and the Civil Monetary Penalties Law (CMPL). Government agencies, including the Department of Justice, the Department of Health & Human Services Office of Inspector General (OIG), and the Centers for Medicare & Medicaid Services (CMS), are charged with enforcing these laws.

As a healthcare provider when you begin your career, it is crucial to understand these laws not only because following them is the right thing to do, but also because violating them could result in criminal penalties, civil fines, exclusion from the Federal health care programs, or loss of your medical license from your state medical board. In this article, we shared the basics of these 5 key acts which will help you to avoid medical fraud and abuse. 

5 Key Acts to Avoid Medical Fraud and Abuse

False Claims Act (FCA)

The civil False Claims Act (FCA) protects the Government from being overcharged or sold shoddy goods or services. It is illegal to submit claims for payment to Medicare or Medicaid that you know or should know are false or fraudulent. Filing false claims may result in fines of up to three times the program’s loss plus $11,000 per claim filed. Under the civil FCA, each instance of an item or a service billed to Medicare or Medicaid counts as a claim, so fines can add up quickly.

The fact that a claim results from a kickback or is made in violation of the Stark law also may render it false or fraudulent, creating liability under the civil FCA as well as the AKS or Stark law. Under the civil FCA, no specific intent to defraud is required. The civil FCA defines “knowing” to include not only actual knowledge but also instances in which the person acted in deliberate ignorance or reckless disregard of the truth or falsity of the information. 

Anti-Kickback Statute (AKS)

The Anti-Kickback Statute (AKS) is a criminal law that prohibits the knowing and willful payment of “remuneration” to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients). Remuneration includes anything of value and can take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies.

In some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime. The statute covers the payers of kickbacks, those who offer or pay remuneration, as well as the recipients of kickbacks, those who solicit or receive remuneration. 

Physician Self-Referral Law (Stark Law)

The Physician Self-Referral Law, commonly referred to as the Stark law, prohibits physicians from referring patients to receive “designated health services” payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship unless an exception applies. Financial relationships include both ownership/investment interests and compensation arrangements.

For example, if you invest in an imaging center, the Stark law requires the resulting financial relationship to fit within an exception or you may not refer patients to the facility and the entity may not bill for the referred imaging services. “Designated health services” includes clinical laboratory services; physical therapy, occupational therapy, and outpatient speech-language pathology services; radiology and certain other imaging services; radiation therapy services and supplies; DME and supplies; parenteral and enteral nutrients, equipment, and supplies; prosthetics, orthotics, and prosthetic devices and supplies; home health services; outpatient prescription drugs; and inpatient and outpatient hospital services.

Exclusion Statute 

OIG is legally required to exclude from participation in all Federal health care programs individuals and entities convicted of the following types of criminal offenses: (1) Medicare or Medicaid fraud, as well as any other offenses related to the delivery of items or services under Medicare or Medicaid; (2) patient abuse or neglect; (3) felony convictions for other health-care-related fraud, theft, or other financial misconduct; and (4) felony convictions for unlawful manufacture, distribution, prescription, or dispensing of controlled substances.

OIG has the discretion to exclude individuals and entities on several other grounds, including misdemeanor convictions related to health care fraud other than Medicare or Medicaid fraud or misdemeanor convictions in connection with the unlawful manufacture, distribution, prescription, or dispensing of controlled substances; suspension, revocation, or surrender of a license to provide health care for reasons bearing on professional competence, professional performance, or financial integrity; provision of unnecessary or substandard services; submission of false or fraudulent claims to a Federal health care program; engaging in unlawful kickback arrangements, and defaulting on a health education loan or scholarship obligations.

Civil Monetary Penalties Law 

OIG may seek civil monetary penalties and sometimes exclusion for a wide variety of conduct and is authorized to seek different amounts of penalties and assessments based on the type of violation at issue. Penalties range from $10,000 to $50,000 per violation.

Some examples of CMPL violations include:

  • presenting a claim that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent; 
  • presenting a claim that the person knows or should know is for an item or service for which payment may not be made; 
  • violating the AKS; 
  • violating Medicare assignment provisions; 
  • violating the Medicare physician agreement; 
  • providing false or misleading information expected to influence a decision to discharge;
  • failing to provide an adequate medical screening examination for patients who present to a hospital emergency department with an emergency medical condition or in labor; and 
  • making false statements or misrepresentations on applications or contracts to participate in the Federal health care programs.

We shared an excerpt from the CMS document “A Roadmap for New Physicians” to share the basics of 5 key acts to avoid medical fraud and abuse, you can refer to the original document for detailed understanding. Medical Billers and Coders (MBC) is a leading medical billing company providing complete revenue cycle services.

We can assist you in receiving accurate reimbursement for your practice while following billing guidelines to avoid medical fraud and abuse. To know more about our medical billing and coding services, contact us at info@medicalbillersandcoders.com/888-357-3226.

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