Will the Affordable Care Act increase Medicare fraud investigations?

A health care investigation by a federal agency can implicate serious charges and penalties. This article examines a recent Medicare fraud case study.

With the implementation of the Affordable Care Act, patients and health care providers alike have been adjusting to new procedural requirements. In fact, a recent survey by the Kaiser Family Foundation revealed that about 90 percent of individuals who had enrolled for coverage using the marketplace had contacted customer service with follow-up questions.

New plans, new coverage questions

At least one insurance provider on the marketplace has attempted to shorten the learning curve for new members with an educational campaign. The company, Insurance Blue Cross, attempted to call all of its 165,000 new enrollees to help them understand their coverage terms. It also has a mobile educational tractor-trailer for educational seminar stops. Common areas of confusion include coinsurance, deductibles, and different payment tiers for facilities and/or health professionals outside of a network.

Providing services not covered by a plan might raise legal issues

Yet coverage questions under the Affordable Care Act may also implicate legal questions for health care providers, especially regarding their preventative medicine duties. For example, some doctors might regard weight-loss counseling as part of their professional duty. Such efforts may include outpatient services in an effort to help patients avoid a variety of obesity-related diseases, such as diabetes, cardiovascular disease, osteoarthritis or hypertension. Yet would federal officials regard such services as medically necessary?

Federal officials can be aggressive in investigating alleged unlawful activities of medical providers and professionals, such as false or overbilled claims, rendering services that were not medically necessary, or even Medicaid or Medicare fraud. In fact, a Medicare Fraud Strike Force that was formed in March 2007 has brought criminal charges against over 1,700 defendants across the country. The billing amount in dispute totals over $5.5 billion.

Case study: Medicare fraud conviction against Houston company

As a recent Medicare fraud conviction against two local defendants reminds us, billing for services that are not covered by Medicare, Medicaid or a patient’s plan can subject a health care provider to serious legal scrutiny. In this particular example, the claims were brought against Spectrum Care P.A., a former Houston-based company that provided mental health care services, including outpatient treatments called partial hospitalization program services.

Federal officials accused the co-owners of the company, two physicians, of providing $97 billion in services to some patients that were neither medically necessary nor covered by Medicare. The co-owners were also accused of paying kickbacks to group home operators for patient referrals. The case was tried in federal court in Houston, and a jury convicted the co-owners on charges that included conspiracy to commit health care fraud and conspiracy to pay kickbacks. Several of the company’s employees, as well as Houston group home care owners, were also convicted in the Medicare fraud scheme.

Given such aggressive enforcement efforts and potentially severe penalties, any entity facing a health care investigation from a law enforcement agency should seek the counsel of an experienced attorney. An attorney who has experience in defending against charges of Medicare or Medicaid fraud can help to establish clear communication and procedures with the agency investigators, while providing strong advocacy for their client’s rights.

Keywords: health care fraud, health care investigation, insurance fraud, false claim, professional license investigation, Medicare fraud