Pennsylvania health system, CEO will pay $12.5M to resolve billing probe

https://www.beckershospitalreview.com/legal-regulatory-issues/pennsylvania-health-system-ceo-will-pay-12-5m-to-resolve-billing-probe.html?origin=cfoe&utm_source=cfoe

Related image

Allentown, Pa.-based Coordinated Health and its founder and CEO Emil DiIorio, MD, have entered into an agreement with the federal government to settle False Claims Act allegations, according to the Department of Justice.

The settlement resolves allegations that Coordinated Health inflated payments from federal payers by unbundling claims for reimbursement for orthopedic surgeries, including many for total joint replacement, from 2007 through mid-2014.

Instead of stopping the illegal unbundling, Dr. DiIorio changed how he wrote operative reports to enable Coordinated Health billers to maximize improperly unbundled reimbursements, according to the Justice Department.

Two outside coding consultants identified the improper unbundling during audits in 2011 and 2013 and told top Coordinated Health executives about the problem. “Motivated by its bottom line, Coordinated Health simply ignored the consultants’ recommendations and continued abusing Modifier 59 to improperly unbundle orthopedic surgery claims until mid-2014,” states a Justice Department press release.

Coordinated Health will pay $11.25 million and Dr. DiIorio will pay $1.25 million to settle the allegations. In addition to the monetary settlement, Coordinated Health entered into a corporate integrity agreement with HHS that will require monitoring of its billing practices for five years.

Regarding the settlement, Coordinated Health released the following statement: “We are pleased to have come to a resolution with the federal government regarding allegations of our past use of a specific Medicare billing modifier, involving a complex Centers for Medicare and Medicaid Services rule, which does not relate to the quality of patient care. We have already updated our billing practice to resolve the issue in question, and have taken a number of decisive actions to reduce the potential for issues in the future. Our focus has been and always will be providing the best possible patient care in the communities we serve.”

 

Hospital Operating Income Falls for Two-Thirds of Health Systems

https://revcycleintelligence.com/news/hospital-operating-income-falls-for-two-thirds-of-health-systems?eid=CXTEL000000093912&elqCampaignId=7597&elqTrackId=e8b767871da64811acdd5707ff64a771&elq=8c464455b5764b358a94a8541d0fc832&elqaid=8029&elqat=1&elqCampaignId=7597

Hospital operating income and health systems

Hospital expenses are rising faster than revenue growth for health systems, resulting in declining operating income.

Health system operating income is deteriorating as hospital expenses continue to grow, according to a recent Navigant analysis.

In the three-year analysis of the financial disclosures for 104 prominent health systems that operate almost one-half of US hospitals, the healthcare consulting firm found that two-thirds of the organization saw operating income fall from FY 2015 to FY 2017. Twenty-two of these health systems had three-year operating income reductions of over $100 million each.

Furthermore, 27 percent of the health systems analyzes lost revenue on operations in at least one of the three years analyzed and 11 percent reported negative margins all three years.

In total, health systems facing operating earnings reductions lost $6.8 billion during the period, representing a 44 percent reduction.

Rapidly growing hospital expenses as the primary driver of declining operating margins, Navigant reported. Hospital expenses increased three percentage points faster hospital revenue from 2015 to 2017. Top-line operating revenue growth decreased from seven percent in 2015 to 5.5 percent by 2017.

Hospital revenue growth slowed during the period because demand went down for key hospital services, like surgery and inpatient admissions, Navigant explained.

Many of the revenue-generating services hospitals rely on are under the microscope. Policymakers and healthcare leaders are particularly looking to decrease the number of hospital admissions and safely shift inpatient surgeries to less expensive outpatient settings.

In exchange, Medicare and other leading payers are reimbursing hospitals for decreasing admissions or readmissions and their performance on other value-based metrics.

The shift to value-based reimbursement, however, is slow and steady, with just over one-third of healthcare payments currently linked to an alternative payment model. Hospitals and health systems are still learning to navigate the new payment landscape while keeping their revenue growing.

Value-based contracts also failed to deliver sufficient patient volume to counteract the discounts given to payers, Navigant added.

According to the firm, other factors contributing to a slowdown in hospital revenue growth included a decline in collection rates for private accounts and reductions in Medicare reimbursement updates because of the Affordable Care Act and the 2012 federal budget sequester.

“Because of reductions in Medicare updates from ACA and the sequester, hospital losses in treating Medicare patients rose from $20.1 billion in 2010 to $48.8 billion in 2016, according to American Hospital Association analyses,” the report stated. “The sharp $7.2 billion deterioration in Medicare margins that occurred from 2015 to 2016 surely contributed to the reduction in hospital operating margins in the same year of this analysis.”

While hospital revenue growth slowed, hospital expenses sharply rose as healthcare organizations invested in new technologies. Value-based reimbursement, federal requirements, and other components of the Affordable Care Act prompted hospitals to make strategic investments in EHRs, physicians, and population health management, causing expenses to increase, Navigant stated.

Key strategic investments made by hospitals and health systems included:

  • Compliance with the 2009 Health Information Technology for Economic and Clinical Health (HITECH) Act, which requires certified EHR implementation in hospitals and affiliated physician practices
  • Compliance with Medicare payment reform initiatives, such as accountable care organizations (ACOs) or pay-for-performance programs
  • Participation in new value-based contracts with payers
  • Establishment of employed physician groups or clinically integrated networks to develop the capabilities needed for compliance with performance- or value-based initiatives

“In addition to these strategic investments, other factors drove up routine patient care expenses, including a nursing shortage that increased nursing wages and agency expenses; specialty drug costs, particularly for chemotherapeutic agents; and, for some systems, recalibration of retirement fund costs,” the report stated.

The shift to value-based reimbursement and all of its accompanying policies will be the “new normal,” and hospitals should expect the low rate of revenue growth to persist, Navigant stated.

But hospitals and health systems can withstand the economic downturn by achieving strategic discipline and operational excellence, the firm advised.

“Systems must be disciplined to invest their growth capital in areas of actual reachable demand; that is, matched to the growth potential in the specific local markets the system serves,” the report stated. For example, creating a Kaiser-like closed panel capitated health offering in markets where there is no employer or health plan interest in buying such a product is a waste of scarce capital and management bandwidth.”

In line with strategic discipline, organizations will need to “prune” their owned assets portfolio by improving the utilization of their clinical capacity and growing patient throughput. Health systems can achieve this by focusing on scheduling and staffing, ensuring adherence to clinical pathways, streamlining discharges and care transitions, and adjusting physical capacity to actual demand.

The tools used to succeed in value-based contracts should also be applied to Medicare lines of business to reduce Medicare operating losses.

Additionally, vertical alignment will be key to weathering falling operating earnings, Navigant explained.

“Revenue growth is more likely to occur around the edges of the hospital’s core services — inpatient care, surgery, and imaging — rather than from those services themselves,” the report stated. “Creatively repackaging services like care management that is presently imbedded in every aspect of clinical operations, and finding retail demand for services presently bundled as part of the hospital’s traditional service offerings, represent such edge opportunities.”

Reducing patient leakage in multi-specialty groups and systems through improved referral patterns, scheduling, or care coordination will help to grow revenue and keep it within the system.

“To achieve better performance, health system management and boards must take a fresh look at their strategy considering local market realities. They need to look closely at the markets they serve, and size and target their offerings to actual market demand,” the report concluded. “They must re-examine and rationalize their portfolio of assets and demand marked improvements in efficiency and effectiveness, and measurable value creation for those who pay for care, particularly their patients. Since much of this should have been done five years ago, time is of the essence.”

Oxygen equipment provider Lincare pays $5.25M to settle Medicare Advantage fraud suit

https://www.fiercehealthcare.com/payer/lincare-oxygen-durable-equipment-medicare-advantage-fraud-settlement?mkt_tok=eyJpIjoiTjJRMlpERTBObU0yWldOaiIsInQiOiJPMDVjRGNQVzcxMjIzOGt1ZTZva0R2YU1PXC9mYkczVEtYVHNHWmZzSHc1TjU1RGRZZ1o4VVprZStEV3R3VWdXWFwvQlRoYVg4cGpzakZIOFFkMkthRnVPbVwvNEUwQ3ptOVozRGQ0U3IyVDFENENmZTErMjc3TDhRYlwvaUlrT1oxSWgifQ%3D%3D&mrkid=959610

The word fraud framed by other words

One of the country’s largest suppliers of oxygen and respiratory equipment has agreed to pay $5.25 million to settle allegations that it violated anti-kickback laws by reducing copayments for certain Medicare Advantage members.

Lincare has also entered into a corporate integrity agreement with the Office of Inspector General, the Department of Justice announced last week.

The settlement resolves allegations filed by former billing supervisor Brian Thomas, who worked for nearly a decade at the Florida-based company. In his 2015 complaint, which was later joined by federal prosecutors, Thomas claimed Lincare waived copays for Humana’s Medicare Advantage members beginning in December 2011 after the insurer contracted with Apria Healthcare to be an exclusive in-network provider of medical equipment.

In his complaint, Thomas said Lincare matched network benefits by reducing copays from Humana beneficiaries from 30% to 13% to align with copays from Apria. Humana was left paying for a higher charge using government funds.

Lincare was purchased by The Linde Group, a German industrial gas company, for $3.8 billion in 2012. The government alleged Lincare continued the scheme through 2017.

It’s the second major settlement for Lincare, which operates about 1,000 locations across the country. In May, the company paid $875,000 to settle a class action lawsuit from employers who had their information stolen during a data breach.

 

 

 

Vulnerable Rural Hospitals Face Quandaries Over Questionable Billing Schemes

Vulnerable Rural Hospitals Face Quandaries Over Questionable Billing Schemes

Image result for rural health

Two rural Missouri hospitals recently handed over their operations to a private company that promised to turn them around with a billing practice it calls “a lab outreach program.”

But the approach that company is using is drawing attention from lawmakers and Missouri’s auditor. It is similar to a tactic underway at 20 rural hospitals in Missouri, Kansas, Oklahoma, Florida and California.

Read KHN’s previous coverage of this topic: “Outsiders Swoop In Vowing To Rescue Rural Hospitals Short On Hope — And Money” by California Healthline senior correspondent Barbara Feder Ostrov.

 

Healogics to Pay Up to $22.5M in False Claims Settlement

https://www.healthleadersmedia.com/finance/healogics-pay-225m-false-claims-settlement

Image result for hyperbaric chamber

Whistleblower lawsuits had alleged that the Florida-based wound care specialist knowingly filed bogus claims to Medicare for services that weren’t needed.

Healogics, Inc. will pay up to $22.51 million to settle whistleblower allegations that billed Medicare for medically unnecessary and unreasonable hyperbaric oxygen therapy, the Department of Justice said.

Jacksonville, FL-based Healogics manages nearly 700 hospital-based wound care centers across the nation.

The settlement resolves allegations that from 2010 through 2015, Healogics knowingly submitted false claims to Medicare for medically unnecessary or unreasonable HBO therapy, DOJ said.

Healogics will pay $17.5 million, plus an additional $5 million if certain financial contingencies occur within the next five years, for a total potential payment of up to $22.51 million. The company has also has entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General.

“When greed is the primary factor in performing medically unnecessary health care procedures on Medicare beneficiaries, both patient well-being and taxpayer funds are compromised,” said HHS OIG Special Agent in Charge Shimon R. Richmond.

The settlement came as the result of whistleblower lawsuits filed by a former executive at Healogics, and a separate suit filed by two doctors and a former program director who worked at Healogics-affiliated wound care centers. The four whistleblowers are expected to share $4.2 million of the settlement.

 

 

Banner Health settles whistleblower case for $18 million

https://www.azcentral.com/story/money/business/health/2018/04/12/banner-health-settles-whistleblower-case-18-million/511848002/

Image result for Banner Health settles whistleblower case for $18 million

 

Banner Health has agreed to pay more than $18 million to settle whistleblower claims that the Phoenix-based health system admitted patients who could have been treated less expensively at outpatient facilities.

The settlement resolves a whistleblower case brought by a former Banner Health employee who claimed one dozen hospitals in Arizona and Colorado overcharged Medicare for brief, inpatient procedures that should have been billed on a less costly outpatient basis, the U.S. Attorney’s Office in Arizona said.

The settlement resolves allegations that Arizona’s largest health provider “inflated in reports to Medicare the number of hours for which patients received outpatient observation care during this time period,” according to a statement from the federal prosecutors.

The settlement involved Medicare billing at one dozen hospitals from November 2007 through December 2016.

The case was brought by former Banner Health employee Cecilia Guardiola under the federal False Claims Act, which allows individuals to bring lawsuits on behalf of the government and collect a portion of any settlement. Under terms of the settlement, Guardiola will be paid $3.3 million.

Banner Health said in a statement that the settlement does not include any findings of wrongdoing and allows the system to avoid the costs and disruption of ongoing litigation.

“Banner Health is fully committed to adhering to all legal and regulatory requirements and providing patients with the highest quality of care,” the statement read. “Although the rules that dictate when a hospital can accommodate a physician’s request to admit a Medicare patient are complex and evolving, our policy has always been to make those decisions in accordance with government guidelines.”

Guardiola, a registered nurse and a law school graduate, was hired by Banner Health in October 2012 as a director overseeing clinical documentation. She resigned three months later after she determined her efforts to bring “ethical compliance” would be ineffective, according to a statement issued by Kreindler & Associates, a law firm representing Guardiola.

During her brief stint at Banner, Guardiola evaluated Banner’s clinical documentation as well as short-stay inpatient claims.

She discovered that Banner hospitals billed an “inordinate and improper number of short-stay claims, particularly those for expensive cardiac procedures,” according to the statement.

In all, she discovered more than 650 examples of Banner billing Medicare for an inpatient claim even though the patient was admitted and discharged the same day, the statement said.

She also discovered that two hospitals, Banner Boswell and Banner Del Webb, identified some cardiac procedures as urgent rather than elective to prevent claims from being denied, the statement said.

10 thoughts from discussion on 2018 Anti-Kickback and Stark Law issues

https://www.beckershospitalreview.com/legal-regulatory-issues/10-thoughts-from-discussion-on-2018-anti-kickback-and-stark-law-issues.html

Image result for fraud and abuse

 

We had a chance to moderate and participate in a webinar with leading colleagues John Harig, Tim Fry, David Pivnick and Brett Barnett regarding key Anti-Kickback Statute and Stark Law issues facing health systems, surgery centers, dialysis providers and other healthcare providers and investors. Below are 10 key thoughts discussed during the webinar as to fraud and abuse issues in play in 2018.

1. The reading and implementation of the “Yates Memo” issued by the U.S. Department of Justice will influence how the government aims to prosecute individuals in addition to companies.

2. The reading of the U.S. Supreme Court’s Escobar decision will influence whether defendants in false claims cases will receive some relief from technical billing violations that are not fundamental or material to the government’s paying of a claim.

3. Regulators and potential buyers are focused on “creative marketing arrangements” by physician practices, often related to laboratory and/or pharmacy arrangements.

4. Government enforcement agencies and potential buyers are focused on physician compensation arrangements, particularly their compliance with the Stark Law.

5. Potential buyers face a challenge in determining how deeply to examine targets’ past practices through billing and coding audits, as well as how to handle the results of billing and coding audits in negotiation of transactions.

6. Private equity buyers face challenges in their evaluation of risk posed by regulatory issues and how to address regulatory risks in a seller’s market.

7. Sellers present the historical legal analysis of fraud and abuse issues during the due diligence process, particularly when the legal analysis is positive, but assumptions underlying the legal analysis do not align with the sellers’ actual operations.

8. The turnover in the U.S. Department of Justice may impact the timing of fraud and abuse prosecutions and settlements.

9. Recoveries by the government resulting from fraud and abuse prosecutions have increased in magnitude. Furthermore, there are more recoveries coming from cases in which the government has not joined in the case with the relator.

10. The wide array of laboratory arrangements and businesses hold implications for fraud and abuse laws.