Medicare fraud is a huge problem nationally. According to the FBI, taxpayers lose tens of billions of dollars each because of fraud. Since Medicare, Tricare and Medicaid are paid with tax dollars, everyone in the country is hurt by these schemes. Radiology Medicare fraud is one of the larger and growing problem areas.
Imaging and X-ray equipment can cost millions of dollars. Yet new stand alone MRI clinics seem to pop up everywhere. The intense competition and need to service the debt on these big ticket equipment items push some providers to break the law.
For this post we are looking at a recent prosecution against Rose Radiology Centers located on the west coast of Florida. One of their centers is just 2 miles from my home. Just about every type of Medicare fraud scheme was alleged by the two whistleblowers who made claims against Rose. That makes them the perfect “poster child” for this post on radiology Medicare fraud.
The Claims Against Rose Radiology Centers
The two claims against Rose were brought by whistleblowers. Plaintiff Carlene Schimke has been a licensed radiology technician for over 30 years. For just over three months, Schimke worked for Rose Radiology. Katrina Miller was working at Rose in their billing department. She handled all the Medicare claims for the company and their 13 radiology centers.
According to the two women, Rose Radiology was doing many things wrong.
Testing without a Physician Present
First, Schimke claimed the clinics were performing medical testing without a physician present. That may be legal for some tests, but not those in which contrasting dye must be injected into patients. Because some patients have life threatening reactions to the dye, federal Medicare rules require a physician be present.
According to Schimke, a doctor was only at her clinic 1 to 3 days per week and often not for the entire day.
Testing without a Valid Prescription
Second, Schimke also reported that sometimes patients were given expensive tests without a prescription. When a patient comes to an imaging center, it usually because his or her treating physician requested an MRI, CT scan, MRA or other type of testing. Medicare won’t pay for these services unless they are accompanied by a prescription from the treating physician.
In the case of Rose Radiology Centers, when there was no script from the referring physicians, doctors there would simply make up a prescription after the fact to cover any additional testing.
Shortly after complaining that Rose’s actions were illegal and dangerous, Schimke says a supervisor “grabbed [her] arm and physically and roughly forced her out of the office.” Like so many other concerned workers who are ignored or suffer retaliation, Schimke filed a False Claims Act claim in federal court.
Miller’s story is similar, although she saw different types of fraud.
The federal Anti Kickback Statute prohibits the exchange of anything of value made to induce or reward the referral of taxpayer funded healthcare business. Common examples include cash payments, gift cards, expensive meals, trips, free or discounted rent deals, concert tickets or kickbacks disguised as discounts. It is also generally illegal for a physician to refer a patient to an entity which the physician or immediate family member owns. Congress wants healthcare decisions to be based on the best interests of the patient, not on who pays bribes or kickbacks.
Miller says that Rose Radiology gave special discounts to physicians who referred their Medicare patients needing testing. Sometimes the referring doctor would want to bill for reading the test results. Rose would give the doctor a discount and read the results then allowing the treating physician to bill at their higher rates and as if they had interpreted the tests.
Imaging prescribed by chiropractors is not covered by Medicare. Many chiropractors order these tests, however. To trick Medicare, Miller says that Rose would change the prescription to make it appear that one of its’ physicians had ordered the test. Radiologists can prescribe these tests either, but Medicare won’t pay unless the radiologist is the treating physician.
Performing Testing at Unapproved Facilities
Medicare rules require each independent diagnostic testing facility (“IDTF”) be enrolled and approved by Medicare. This requirement isn’t simply done for number crunching or accounting reasons. The Centers for Medicare and Medicaid Services want to track quality issues and be able to conduct surprise inspections of every facility. They can’t, however, if the facility doesn’t enroll.
According to Miller, of the 13 facilities owned and operated by Rose Radiology Centers, 2 had equipment that flunked inspection. Those facilities were not enrolled and shouldn’t have treated Medicare patients. They did, however.
Of the remaining 11 facilities, Miller says some of them were limited in what services they were approved to provide. Once again, Miller says it simply didn’t matter. Rose’ personnel would simply alter records to make it appear that all services were performed at licensed facilities.
Medically Unnecessary Testing
All radiological testing must not only have a valid prescription from a treating physician, it also must be medically necessary. According to Miller, Rose had a practice of adding tests even if they were not necessary. For example, she claims that the company had a protocol that said anyone coming in for an MRA of the lower pelvis would also receive an MRA of the abdomen and aorta regardless of what the patient’s doctor wanted or what the results of the pelvic MRA revealed.
Kickbacks to Patients and Billing for Services Not Provided
Between the two whistleblowers, six different violations of Medicare regulations were alleged. About the only thing we didn’t see were kickbacks made to patients and billing for services not provided.
We are seeing a proliferation of stand alone MRI clinics that advertise directly to the public (itself a no-no) and that give gift baskets, gas cards and other give aways to patients who refer new patients. These promotions, of course, are illegal and considered to be kickbacks.
Billing for services not provided is just what it sounds like, a provider bills Medicare for a service even though the service was never performed.
Rose Pays $8.71 Million to Settle Radiology Medicare Fraud Charges
There is a happy ending to this story. This spring, Rose Radiology paid $8.71 million to settle the charges brought by both whistleblowers. For their efforts, both women received $1.7 million as an award.
In announcing the settlement, Tampa’s United States Attorney, Lee Bentley, said, “This settlement resolves myriad allegations involving standards of medical care, false billing practices, and breaches of trust. There is no room for such practices in our public health care programs. We will continue to do everything within our power to protect the public against such violations, when and where they are found.”
A Health and Human Services spokesperson addressed the danger in operating these clinics without proper medical supervision. “It is unconscionable for a physician to allow someone without the proper medical training to administer a test that could cause serious harm” said Shimon Richmond, Special Agent in Charge for the HHS Office of the Inspector General. “Not only do the kinds of frauds that were alleged in this case rob Medicare of needed funds, they threatened the health of elderly and disabled Americans.”
Whistleblower Awards and Radiology Medicare Fraud
Medicare fraud involving radiologists and MRI centers is illegal. Whenever the services are paid by taxpayer funds, awards become available to the whistleblowers reporting the fraud. Generally, an award is only paid to the first person who reports the fraud but as this case points out, awards can be paid to multiple whistleblowers if each has different information.
To qualify for an award, a whistleblower must have inside information about the fraud. The fraud must also involve public healthcare funds. (A small number of states have laws that pay whistleblowers for information regarding fraud against private insurance companies.)
If you are thinking about becoming a whistleblower, try to get specific examples of fraud. Although patient names are never included in complaints, several states require examples and having examples makes it easier for prosecutors to prove your claims.
Claims are made by filing a sealed lawsuit in federal court. The government then is given time to investigate the claims in secret. While the case is under seal, the whistleblower’s name is also kept secret and can only be released with court approval.
Should the government decline to investigate, the whistleblower’s own legal team can prosecute the case. Should those efforts be successful, the awards are even higher. Generally, the awards paid to whistleblowers range between 15% and 30% of whatever the government collects. Because the government is entitled to triple damages and seek penalties as high as $20,000 per each bad claim filed, potential awards are huge.
Retaliation against whistleblowers is illegal. Should it happen, the whistleblower is entitled to even more damages.
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