HMGT 372 ASSESSMENT 2

GOVERANCE AND FRAUD IN HEALTH CARE ORGANIZATIONS

Legal and Ethical Responsibilities

Mervyn Riley Fall 2018

Submitted to

Professor Nicole Mazzei-Williams

In Partial Fulfillment of HMGT 372

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1. Name of the Law and or laws:

U.S. Code › Title 31 › Subtitle III › Chapter 37 › Subchapter III › § 3729

31 U.S. Code § 3729 - False claims

The Office of the Inspector General can pursue financial penalties for organizations and can

exclude them from numerous types of activities. They have the authority to fine an organization

for several different amounts. These amounts are varied because of the type of violation that is at

hand $10,000 to $50,000 per violation. These penalties would be specific in nature and have a

fine attached to the violation. These penalties are assessed on an individual basis.

A company can be found in violation of the False Claims Act if they knowingly present

fraudulent billing statements, make false statements or present false records in the request of

claim. They are also found liable if they have been found to violate any of the other provisions in

the law that all are in relation to false claims, false billing and false reporting in a conscious to

benefit financially from a conscious false report. It is also important to note that the penalties that

are assessed are adjusted annually for inflation. This means that these penalties will continue to

increase.

2. Management’s Financial Responsibilities:

Accurate Coding and Billing

31 U.S. Code § 3729 in Section A. addresses liability for certain acts to include ‘knowingly

presents, or causes to be presented, a false or fraudulent claim for payment or approval’[Law].

Agency management has the responsibility to the consumers and the payor to do their due

diligence in their reporting. Management has the responsibility to control the documentation that

is submitted as the support for the claims that are submitted to the insurance company for

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payment. The management has the responsibility to make sure that the services that are provided

are deemed to be medically necessary, the services are cost-effective and there is a high level of

quality care. The management must be able to identify services that have been delivered and be

able to give a description of the service that was rendered to the consumer. This description is the

support for claims that are submitted to the insurer for payment. You control the documentation

describing what services they received, and your documentation serves as the basis for claims

sent to the insurer for services provided.

Physician Documentation

31 U.S. Code § 3729 in Section A. addresses liability for certain acts to include ‘knowingly

presents, or causes to be presented, a false or fraudulent claim for payment or approval’ (U.S.

Code › Title 31 › Subtitle III › Chapter 37 › Subchapter III › § 3729). Management is tasked with

maintaining the exact and concise medical documents that outline the services that have been

provided to consumers. The management is also charged with making sure that there is proper

documentation by the physician that can be submitted to support claims that are submitted to the

insurer. These documents also allow the agency to ensure that the proper treatment services are

providing for consumers for whom they provide services. These accurate notes ensure that other

providers across the network of providers that may share medical information are able to be

factually correct when they submit billing after providing appropriate services.[Precautions]

Physician Investments in Health Care Business Ventures

31 U.S. Code § 3729 in Section E addresses any person who is authorized to make or deliver a

document certifying receipt of property used, or to be used, by the Government and, intending to

defraud the Government, makes or delivers the receipt without completely knowing that the

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information on the receipt is true[Law]. In this instance the management responsibility is to use

all resources that are available to make certain that the services that they are requesting payment

for are all true. Physicians that are invested in external healthcare services such as an MRI center

or any other type of service provider can be guided to refer or deliver services based on their

financial interest and investment. Management must make sure that these sorts of relationships

do not cause them to deliver and submit fraudulent billing for unnecessary services[Precautions].

3. Consequences for Ethical or Legal Breach

The Office of Inspector General (OIG) has the authority to seek civil monetary penalties (CMPs),

assessments, and exclusion against an individual or entity based on a wide variety of prohibited

conduct. In each CMP case resolved through a settlement agreement, the settling party has

contested the OIG's allegations and denied any liability. No CMP judgment or finding of liability

has been made against the settling party (oig.hhs.gov, 2017).

The Office of Inspector General (OIG) Enforcement Cases

08-21-2018

Oklahoma Prosthetics Supplier Excluded for Default

On August 21, 2018, OIG excluded La Fuente Ocular Prosthetics, LLC (La Fuente), an

Oklahoma City, Oklahoma, prosthetic supplier, for defaulting on payment obligations under a

settlement agreement with OIG wherein OIG alleged that La Fuente submitted false or

fraudulent claims to Medicare and created false records material to a false claim. La Fuente's

exclusion will remain in effect until it cures the default of its payment obligations and OIG

reinstates La Fuente's participation in Federal Health care programs. Senior Counsel Geoffrey

Hymans represented OIG[Cases].

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The decision by the Office of the Inspector General to exclude La Fuente Ocular Prosthetics,

LLC (La Fuente) was warranted. La Fuente was found in violation because of false claim

submissions. La Fuente then decided to enter into an agreement of payment arrangements to

settle the cost of the violations. The default prompted the OIG to seek other methods of relief and

La Fuente was then excluded. Exclusion is an option to address violations of 42 U.S.C. § 1320a-

7(b)(7).

06-11-2018

Oklahoma Ambulance Authority Settles Case Involving False Claims

On June 11, 2018, Comanche County Hospital Authority d/b/a Comanche County Memorial

Hospital, (Comanche), Lawton, Oklahoma, entered into a $566,806 settlement agreement with

OIG. The settlement agreement resolves allegations that Comanche submitted claims to

Medicare for emergency ambulance transportation to destinations such as skilled nursing

facilities and patient residences that should have been billed at the lower non-emergency rate. In

addition, while OIG's investigation, Comanche discovered and disclosed that it submitted claims

to Medicare for emergency ambulance transportation that were not medically reasonable or

necessary. Comanche also disclosed that it submitted claims to Medicare for transports where the

documentation for the transport was not consistent with the patient's condition, and therefore did

not support the documented medical necessity for the transport. OIG's Consolidated Data

Analysis Center and Office of Counsel to the Inspector General, represented by Senior Counsels

Geoffrey Hymans and Andrea Treese Berlin, collaborated to achieve this settlement.[Cases]

In the case of the Comanche County Medical Hospital, the judgement was warranted. The

hospital submitted claims that were fraudulent. The management has the responsibility to make

certain that the claims that are being submitted are right and truthful in the description of their

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services. This is in violation of U.S. Code › Title 31 › Subtitle III › Chapter 37 › Subchapter III › §

3729 Section B that addresses someone that knowingly makes, uses, or causes to be made or

used, a false record or statement material to a false or fraudulent claim.

11-04-2016

Physician Agrees to 20-Year Exclusion to Resolve Civil Monetary Penalty Case

Labib Riachi, M.D., a New Jersey based OB/GYN with a subspecialty in urogynecology, agreed

to be excluded from participation in Federal health care programs for a period of twenty years

under 42 U.S.C. § 1320a-7(b)(7) for allegedly violating the Civil Monetary Penalties Law. OIG

alleged that Dr. Riachi knowingly submitted claims to Medicare and Medicaid for pelvic floor

therapy services that he knew or should have known were not provided as claimed or were false

or fraudulent. These claims were not provided as claimed or were false or fraudulent for one or

more of the following reasons: (1) Dr. Riachi failed to personally perform or directly supervise

services while he was traveling outside the United States or State of New Jersey; (2) Dr. Riachi

failed to personally supervise the performance of a diagnostic procedure performed by his

medical assistants; (3) services were not actually provided; (4) physical therapy services were

provided by unlicensed and unqualified individuals; (5) services were not documented; and (6)

diagnostic services were not reasonable and necessary. David Blank, Tamara Forys, and Jennifer

Leonardis represented OIG with assistance from Paralegal Specialist Mariel Filtz. [Cases]

The agreed decision by the OIG and Labib Riachi, M.D was a correct decision in response to the

violations found by the OIG office and the number of violations. The OIG is empowered within

the law to be able to level financial penalties or seek exclusion.

4. HCO’s Management’s remedial steps to reverse the non-compliance organizations:

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Three steps that can be implemented to directly reverse the actions of a non-compliant

organization would a combination of technology and human interaction. Firstly, the

implementation of an Electronic Medical Records (EMR) system. This electronic system will

allow records to be entered easier and protect against loss and damage to information contained

on paper files and handwritten. In the event of this kind of document loss a provider might fill in

information that is fraudulent to make up for the lost information. The management would then

implement a two-signature verification process. This type of process can be assigned within the

EMR system. This would allow for two levels of scrutiny on every billing statement that leaves

the agency and no one person will have autonomy to bill in the system. This decreases the

likelihood of agency false billing submission. Lastly management would also implement a

quality control assessment periodically. This would focus on best practices and audit the

submission process in shorter periods so that the extent of liability would be limited and easier to

be remedied.

5.Conclusion:

The number of violations and exclusions that are being handed out by the OIG underscores the

need for accountability in the healthcare system. These abuses in the system are causing higher

service costs to consumers and operating costs to providers. It also represents a decreased ability

of the federal government to provide services due to funding unnecessary and false claims from

unsavory operators in the system that do not have the overall system sustainability at heart.

Technological advances and industry controls and accountability will allow for a market

correction that will augment quality care and affordability in the healthcare sector.

References

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AVOIDING MEDICARE FRAUD & ABUSE: A ROADMAP FOR PHYSICIANS. (2017, November). Retrieved from Medicare Learning Network: https://www.cms.gov/Outreach-and-Education/Medicare-Learning- Network- MLN/MLNProducts/Downloads/Avoiding_Medicare_FandA_Physicians_FactSheet_905645.pdf

Civil Monetary Penalties and Affirmative Exclusions. (2018, August 8). Retrieved from Office of the Inspector General: https://oig.hhs.gov/fraud/enforcement/cmp/cmp-ae.asp

U.S. Code › Title 31 › Subtitle III › Chapter 37 › Subchapter III › § 3729. (n.d.). Retrieved from Legal Information Institute : https://www.law.cornell.edu/uscode/text/31/3729

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