A New York State hematology-oncology medical practice (the Practice), has agreed to pay $5.3 million to resolve allegations that, over an approximate five-year period, it provided kickbacks to patients in the form of waived copayments, and overbilled federal healthcare programs for certain evaluation and management (E&M) services.  A former billing representative for the Practice filed the lawsuit in April 2014 in the Southern District of New York pursuant to the qui tam provisions of the False Claims Act, and both the United States and State of New York intervened simultaneously with settlement. 

The Practice admitted to certain conduct in the Stipulation and Order of Dismissal (the “Stipulation”), including that it:

1.   routinely waived Medicare beneficiaries’ copayments applicable to E&M codes 99211-99215 (which indicate various degrees of evaluation and management of established patients when making in-office visits for treatment), without an individualized determination of financial hardship or exhaustion of reasonable collection efforts;

2.   billed Medicare for amounts that included the amounts of the waived copayments, resulting in higher reimbursement from Medicare than the Practice was entitled;

3.   overbilled Medicare and Medicaid by billing for E&M services (CPT codes 99211 or 99212) in addition to billing for routine procedures (e.g., chemotherapy, injections or venipuncture) on the same date, even though the Practice had not documented that it provided any significant, separately identifiable services; and

4.   billed Medicare for E&M services (CPT codes 99211 and 99212) without documenting in the medical record that those services were medically necessary and/or actually performed.

With respect to routinely waiving copayments, longstanding guidance from the HHS Office of Inspector General explains that providers may, in individualized circumstances, waive a patient’s copayment based on an individualized determination of financial hardship.  Providers cannot, however, routinely apply the financial hardship exception, and, except in special cases, should make good faith efforts to collect deductibles and copayments.  According to the United States’ Complaint-In-Intervention (the Federal Complaint), the Practice consistently waived copayments without receiving any supporting documentation or additional information from patients, including those who sought frequent medical services from the Practice, who had a high balance, whose insurance did not pay certain amounts or who expressed an inability to pay. 

With respect to E&M billing, as alleged in the Federal Complaint, the CPT codes relevant to certain treatments billed by the Practice, such as the administration of infusions, injections and chemotherapy, already include E&M code 99211, and, therefore, that code cannot be “unbundled” and billed separately.  A higher complexity E&M code can be billed, but only if there is a significant and separately identifiable E&M service that is above and beyond the usual work for the procedure.  According to the Federal Complaint, the Practice separately billed E&M codes 99211 or 99212 for patients who received minor or routine services administered by a nurse, such as B12 injections, blood withdrawals or chemotherapy, but who did not see a physician.  Despite this, the Federal Complaint alleges that the Practice’s physicians would complete and sign progress notes certifying that they had participated in the evaluation and management of these patients for a specified amount of time.     

The Practice will enter into a Corporate Integrity Agreement with the OIG in exchange for a release by the OIG from any administrative action seeking to exclude the Practice from federal healthcare programs.  

For a copy of the Stipulation, please click here.  For a copy of the Federal Complaint, please click here.  For a copy of DOJ’s press release announcing the settlement, please click here.