FCA enforcement trends: Employed physicians, medical necessity, overpayment returns

If the False Claims Act (FCA) cases this year are any indication, health providers can expect continued government scrutiny, particularly when it comes to enforcing anti-kickback laws against employed physicians and determining what constitutes medically necessary care, according to attorneys from the law firm Posinelli who reviewed 2015 FCA cases in a webinar last week.  

Firm shareholders Jeffrey Fitzgerald and Brian D. Bewley reviewed some of the most important FCA cases this year, highlighting enforcement trends that are likely to continue through the remainder of the year and beyond.

In particular, Fitzgerald pointed to an uptick in FCA settlements that target payment arrangements with employed physicians. This marks a transition from years past when compensation for employed physicians was rarely scrutinized. Now, multimillion-dollar settlements, like the $21.75 million paid by Citizen's Medical Center, have exposed payment arrangements that exceed fair market value. Although previous settlements targeted hospitals, future litigation could turn toward individual physicians.

"Part of the takeaway from this trend has to be just because you employ physicians rather than contract with them as independent contractors doesn't mean anything goes, or you can pay as much as you want," he said. "Fraud and abuse laws and fair market value principles still apply."

Additionally, a number of cases focusing on quality care and medical necessity have indicated that federal prosecutors are willing to question the medical judgement of physicians when it comes to defining Medicare payments for potentially unnecessary services. Cases involving Westchester Medical Center and King's Daughters Medical Center have focused particularly on unnecessary cardiac surgery.

The attorneys also touched on the details of the $237 million Tuomey case --admitting that there may be a level of "Tuomey fatigue" among litigators and providers--as well as the much anticipated case against Continuum Health Partners that addresses reverse false claims and the 60-day window to return overpayments. Fitzgerald said there has been a lot of concern surrounding the court's "government-friendly" decision to deny the hospital's motion to dismiss the case, but urged providers not to panic. The legal advice for providers remains the same: Once you've been notified of an overpayment, review and return any overpayments in a reasonably prompt manner.

"That's not really new news or new advice, and frankly I don't think people should change from that point of view because of one trial decision out of New York," Fitzgerald said.

Finally, Bewley indicated the OIG's new 10-attorney civil litigation team could be a "game changer" for physicians and executives. He added that the Department of Justice is also in the process of hiring its own compliance expert to review hospital compliance programs to see if any weaknesses warrant criminal charges, which further underscores the need for governing boards to adhere to OIG's compliance guidelines released in April.

For more:
- here's the Posinelli webinar

Related Articles:
OIG to hospitals: Involve boards to strengthen compliance
Reverse false claims case will provide clarity to overpayment reporting regulations
Hospital, psychiatrists in Texas feel blowback from kickback schemes
Heart patients victimized by billing fraud, unnecessary procedures
Unnecessary procedures drive cardiology fraud investigations