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Healthcare leaders take note: Billing error can lead to AKS violation

Private practices, hospitals and other healthcare facilities balance an enormous workload. Many of these professionals entered the healthcare field to help patients manage their health. They likely find themselves also balancing business needs and reviewing practices to make sure they are in line with applicable federal and state regulations. There are different strategies that can help manage these needs, and delegation is one important step.

But how do healthcare leaders delegate wisely? What if one of the businesses chosen to help manage these issues fails to abide by the regulations? A recent case questions what happens when a healthcare center hires a reimbursement consultant accused of questionable practices.

Whistleblower calls out reimbursement consultant for FCA violation

The case, United States ex rel. Graziosi v. R1 RCM, Inc., began when a whistleblower filed a claim stating the reimbursement consultant was in violation of the federal False Claims Act (FCA). This law allows for those within the organization to file a claim on the government’s behalf, referred to as a qui tam suit. If successful, the whistleblower will receive a portion of the winnings or settlement.

The whistleblower claims that the business, R1, would convert patient status for billing purposes after physicians listed the patient as observe or to receive outpatient services, for example, to inpatient. This is an issue because, as discussed previously in the case Medicare rules generally require physicians to make determinations regarding a patients status in these situations. The whistleblower claims that the reimbursement consultant changed the patient status solely to increase reimbursement rates.

The case further claims the business would use these allegedly inflated numbers to solicit further business from other healthcare providers. The reimbursement consultant moved for summary judgement, based on the argument the changes were made to provide a more accurate reflection of admission rates. Ultimately, the court denied the requests and the case will continue to move forward.

Case reminds healthcare facilities to review billing practices

This case is the most recent reminder that the government continues to crackdown on improper relationships that result in false or fraudulent claims for payment from Medicare and similar providers. Two important takeaways include:

  • Healthcare centers and private practices. Make sure arrangements with third-party providers outline the expectation that the business follow applicable regulations but be aware that this may not be enough to shelter from allegations of wrongdoing. As such, it is important to conduct an audit and fix any potential issues before they become a violation.
  • Reimbursement consultants. Options for growth within this field remain, but be certain you are aware of, and follow, all applicable regulations. Again, an internal audit can help.

Those who face similar allegations of wrongdoing are wise to act to protect their interests by promptly building a defense.