Monthly Archives: May 2012

Interesting Case Summary Concerning Blue Cross Coverage

Click here to read an interesting summary of a federal case where employer failed to follow Blue Cross insurance policy because some of the employer’s employees lived outside the geographic limitiations of the policy.

The result: the employees were disallowed payment for medical care.

Submitted by Matthew L. Kinley

Merging and Consolidating Medical Practices

In January and February of 2012, attorneys Matt Kinley and Mark Doyle teamed up with healthcare accountants Steve Williams and Jay Wikum to make several presentations to providers on medical office management in 2012. This discussion included the practical and legal issues of the size of medical practices, the the pros and cons of merging, and the regulatory issues involved in merging. This is the powerpoint of that presentation.

Student Loan Default Causes Doctor to Lose Medicare/Medicaid Eligibility

Many doctors and other professionals have graduated from graduate school with huge student loan debts, sometimes taking years to pay them off.

Medical professionals have the risk that if they fail to pay their loans, the United States will stop payment from federal sources for services provided.

In a recent case, the Department of Health and Human Services began exclusion of a doctor from receiving Medicare or Medicaid, threatening to cut off payment for services.  This was after the physician failed to make payments on her loan, after a default judgment was entered, and after the physician failed to respond to correspondence from the government.  The action to cut off Medicare payments finally brought a response from the physician, who settled the claim.

According to the United States Attorney General’s office, the government will aggressively pursue those who fail to make good on their promises and obligations to repay their federally backed student loans.

Generally, such loans may not be discharged and there is no statute of limitations that would prevent the government from seeking repayment.  The government attorney in charge said that “[i]t simply is not fair that certain individuals obtain the benefits of receiving student loans, and then act irresponsibly in failing to repay them.  We will take whatever steps are necessary to collect these debts.”

Written by Matthew L. Kinley

Memo Courtesy of the United States Attorney’s Office: Don’t Get Caught on Vacation

What kind of conduct can lead a medical provider to have pleaded guilty to a criminal information admitting false statements to Medicaid?

Consider this one case where a husband and wife, both dentists signed a document that stated they performed services to Medicaid eligible children.  Their dentistry practice was targeted to largely disadvantaged children.  While Medicaid regulations require the providers to actually be in their office when providing services, the US Attorney’s office proved that the couple were on vacation together on two occasions when they billed for services.

On one occasion they billed for performing an evaluation and management of a new patient on a certain date and they claimed entitlement to payment. On that date, the couple was vacationing in Hawaii, no where near their offices. At the time they made this false representation to Medicaid, the couple knew the statement was false and that neither of them performed that service on or about that date.

Similarly, on another occasion the couple was en route to the U.S. Virgin Islands on the same date they  falsely represented to Medicaid that she performed an orthodontic retention on that date claiming entitlement to payment. However, at the time of this false representation to Medicaid, they knew the statement was false and that neither of them performed an orthodontic retention on or about that date.

This couple will likely lose their license to practice dentistry as a result of these false statements and the resulting federal conviction. While they avoided prison, they will be required to pay almost $700,000 in fines and restitution.  The case was conducted by the FBI, the Department of Health and Human Services-Office of the Inspector General and the state attorney general.

Nothing in the information provided tells of any mitigating circumstances (which probably existed but weren’t relevant to these authorities).  For instance, the services may have been provided by another dentist in the office, but not this couple.  Or if it was relevant in the long run that the couple provided a necessary community service by providing dental services to an indigent population.
The lesson:  check and double check those requests for payments.  You don’t want the FBI and various other agencies studying them.


TLD’s Shannon M. Jenkins to Speak at the OCMGMA: “Managing In A Down Economy”

Tredway Lumsdaine & Doyle LLP (TLD) Partner Shannon M. Jenkins is scheduled to speak to the Orange County Medical Group Management Association (OCMGMA) on Friday, May 9 in Orange, CA in regards to “Managing In A Down Economy”.

Her litigation experience includes handling disputes primarily for the employer from pre-litigation negotiation through jury trial or bench verdict, individual and class action cases, administrative (including the Labor Commissioner, EDD and DFEH) and judicial forums and alternative dispute resolution. More specific litigation experience includes successfully defending litigated sexual harassment claims and those involving alleged discrimination, breach of employment agreement, wage and hour, breach of confidentiality agreement, breach of fiduciary duty, wrongful termination and all manner of related tort claims. 

Ms. Jenkins has hosted numerous employment law seminars and speaking engagements, examples of which include the top ten things employers do wrong, best practices in employment law and yearly updates on new employment law cases.  Ms. Jenkins also provides non-litigation related but equally important preventative services such as required sexual harassment training and preparation of the spectrum of pre-hire/hire/post-hire and termination employer documentation.

If you are interested in attending this speaking engagement, please RSVP by Friday, May 4, 2012 to Sue Carlin at SueCarlin  Click here to read the full annoucement from the OCMGMA, including the cost to attend.

U.S. Attorney’s Office Press Release: Medicare Fraud Settlement

United States Attorney Benjamin B. Wagner Eastern District of CaliforniaPsychiatric Solutions Inc. And Universal Health Services Inc. Agree To Jointly Pay $3.45 Million To Settle Allegations Of Fraud

            SACRAMENTO, Calif. — United States Attorney Benjamin B. Wagner announced that Psychiatric Solutions Inc. (PSI) and Universal Health Services Inc. (UHS) have agreed to jointly pay $3.45 million to the United States to settle allegations that subsidiary BHC Sierra Vista Hospital Inc. defrauded the Medicare program. PSI owned Sierra Vista when the alleged conduct occurred; UHS acquired PSI and subsidiary Sierra Vista in November of 2010 and is jointly responsible according to the purchase arrangement.            

Sierra Vista owns and operates a psychiatric facility at 8001 Bruceville Road in Sacramento. The facility provides both inpatient and outpatient psychiatric services to Medicare beneficiaries and others. The United States contends that Sierra Vista failed to provide the number of services to certain patients required to qualify for per-diem payment under Medicare’s Partial Hospitalization Program. Sierra Vista then fraudulently billed for these unqualified patient visits from January 2003 through September 2009.            

The Partial Hospitalization Program is an intensive outpatient program of psychiatric services provided to patients as an alternative to inpatient psychiatric care. It is intended for patients who have an acute mental illness. Regulations require outpatient hospitals to provide at least three defined services each day for payment under this program. This requirement is meant to assure consistency in the level of program intensity among providers.            

Other alleged conduct resolved by this settlement agreement includes billing for outpatient treatment where beneficiaries attended only sporadically. There was also a failure to meet conditions required for payment, including: obtaining approval of certain outpatient treatment, documenting individual outpatient therapy sessions, obtaining physician orders for certain lab work and obtaining physician certification for certain admissions.            

As part of this resolution, Sierra Vista has entered into a five-year Corporate Integrity Agreement with the Office of the Inspector General for the Department of Health and Human Services (HHS OIG). The Corporate Integrity Agreement requires Sierra Vista to establish and maintain a designated Compliance Program that includes oversight by a Compliance Officer and Committee, designated training and education, and annual reporting to HHS OIG.            

This settlement also resolves allegations contained in a whistleblower lawsuit filed by a former Sierra Vista Utilization Review Coordinator under the qui tam provisions of the False Claims Act. The whistleblower provisions of the False Claims Act permit private citizens with knowledge of fraud against the government to bring an action on behalf of the United States and to share in any recovery. As part of today’s resolution, the whistleblower will receive a percentage share of the recovery in the amount of $587,000.            

“Today’s settlement demonstrates our continuing commitment to protect the integrity of the Medicare program, both by assuring appropriate care to beneficiaries and by recovering improperly paid funds,” said U.S. Attorney Wagner.            

This settlement is the result of an investigation by the U.S. Attorney’s Office for the Eastern District of California and the U.S. Department of Health and Human Services, Office of Inspector General. Assistant United States Attorney Catherine Swann handled the matter for the United States.

Submitted by Matthew L. Kinley who comments: “This is interesting because it was initiated by a whistle-blower. The whistle-blower received almost $600,000 for making the reports on this issue.”