RISE summarizes recent regulatory-related headlines.
FATHER AND SON SENTENCED TO PRISON IN $21M MEDICARE SCHEME
The Department of Justice (DOJ) announced that a father and son from California were sentenced in federal court this week to go to prison for their roles in fraudulently receiving more than $21 million in Medicare payments and lying to cover it up.
Anthony Duane Bell Sr. and his son, Anthony Duane Bell Jr., were sentenced to 65 months and 12 months and one day, respectively, for conspiring to commit Medicare fraud by billing for medically unnecessary durable medical equipment such as knee, ankle, shoulder, wrist, and back braces. Bell Sr. pleaded guilty to Medicare fraud while Bell Jr. pleaded guilty to making false statements to a federal officer.
U.S. District Court Judge William Q. Hayes also ordered Bell Sr. to pay $21.7 million in restitution to Medicare and forfeit $806,000 and a luxury house in El Cajon. The forfeited property was purchased using money obtained from the fraud. In arriving at the sentence, Judge Hayes found that Bell Sr. intended to defraud Medicare of over $46 million dollars and received over $21 million dollars.
“This brazen scheme exploited elderly and disabled Medicare beneficiaries so these defendants could line their own pockets,” said U.S. Attorney Tara K. McGrath, in the announcement. “Together with our law enforcement partners, this office will continue to vigorously investigate and prosecute fraud that diverts Medicare funds from some of our nation’s most vulnerable citizens.”
According to court records, the Bells created companies known as Universal Medical Solutions 1 and Universal Medical Solutions 2, which supplied durable medical equipment. To find customers for their businesses, the Bells entered into sham agreements with “marketing” companies that, instead of marketing, provided packets of information about Medicare beneficiaries for $125 to $350 each. These packets of information included a Medicare beneficiary’s personal information, medical history, Medicare number, and an audio recording between a call center and the patient, in which the patient supposedly agreed to accept a brace. The packet also included a signed prescription from a doctor, obtained via telemedicine, claiming that the brace was medically necessary for the patient–although in almost all cases the prescription was signed by a physician who had no previous doctor-patient relationship with the patient, was often in another state, and at most had conducted an audio call with the patient. In all cases the doctor had not conducted any kind of physical examination of the patient.
The Bells bought thousands of these patient packets, each time indirectly paying the telemedicine doctors through the “marketing” companies. The packets were referred to in the industry as “Doctor’s Orders” or “D.O.s.” The Bells purchased the “D.O.s” for a variety of braces, paying the most (up to $350) for a back brace prescription, the type of medical equipment for which Medicare offered the highest reimbursement. The Bells could then, after shipping the brace to the patient, bill Medicare around $1,359.89 for each back brace, through their companies. The Bells also bought other braces, including wrist, knee, and shoulder braces, and billed Medicare at much higher prices than they paid for them.
When Bell Jr. was interviewed by the FBI, he lied about his knowledge of the scheme.
COMMONWEALTH FUND: AUTOMATIC ENROLLMENT IN HEALTH INSURANCE CAN INCREASE COVERAGE FOR LOW-INCOME INDIVIDUALS
Implementing automatic health insurance enrollment for low-income people who quality for no-cost coverage through Medicaid or marketplace plans would substantially reduce the number of uninsured and have a significant impact on uncompensated care, according to a new report published by Commonwealth Fund. Researchers used the Urban Institute’s Health Insurance Policy Simulation Model to analyze alternative auto-enrollment approaches and determine the impact on coverage and spending at the federal and state levels. If all states adopted an auto-enrollment policy for those with incomes or at below 150 percent of the federal poverty level, 4.3 million uninsured people would be identified and enrolled. An additional 1.8 million would be “deemed” covered, either auto-enrolled through provider contact or contingently covered and thus protected from huge medical bills. Provider spending on uncompensated care would fall 32 percent, while federal spending would increase by $30.3 billion and state spending would increase by $7.7 billion per year. Despite the benefits, auto-enrollment would be a major administrative effort and require significant outreach and education to make sure beneficiaries and providers understand the implication of the policy. Click here to read the full report.
DOJ SUES SIX HEALTH PLANS FOR CONCEALING OVERPAYMENTS FOR MILITARY MANAGED CARE PROGRAM
The Department of Justice has filed a complaint alleging that six health plans that participate in the Uniformed Services Family Health Plan (USFHP) program, as well as their trade group, the US Family Health Plan Alliance, violated the False Claims Act by knowingly retaining erroneously inflated payments for health care services the health plans contracted to provide to retired military members and their families.
The United States has also reached a settlement with Department of Defense (DOD) contractor Kennell & Associates Inc., a consulting firm, related to the conduct.
The USFHP program is one of the health care options available to military personnel, retirees, and their families. Six health plans are eligible to participate in this program and are defendants in the complaint: Brighton Marine Health Center, CHRISTUS Health Services, Johns Hopkins Medical Services Corporation, Martin’s Point Health Care, Pacific Medical Center, and St. Vincent’s Catholic Medical Centers of New York.
Through the USFHP program, the DOD pays the plans capitated rates to provide health care services to their enrollees. According to the complaint, in June 2012, the plans learned of calculation errors that had inflated the rates they had been paid in prior years. The plans then took steps to conceal the overpayments from the government and continued to submit invoices at inflated payment rates. The complaint alleges that during discussions about rates for the subsequent year, some of the plans even asked the government to continue paying them at the prior, inflated rates even though, by that time, those plans knew the rates were inflated by the errors.
“Contractors have an obligation to return overpayments, and we will hold accountable contractors that knowingly and improperly retain such funds,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, in the announcement. “We are committed to ensuring that taxpayer funds for health care services to military members and their families are actually used for that purpose, not to enrich those charged with administering the program.”
The United States filed its complaint in a lawsuit originally brought under the qui tam or whistleblower provisions of the False Claims Act by Jane Rollinson and Daniel Gregorie in the District of Maine. From 2007 to 2015, Rollinson worked at Martin’s Point Health Care, including as its interim chief financial officer. Gregorie was a consultant to the CEO and board of Martin’s Point Health Care and later served on its Board of Trustees. The False Claims Act permits a private party to file an action on behalf of the United States and receive a portion of any recovery. The United States has the ability to intervene in such lawsuits, as it has in this case. The qui tam case is captioned United States ex rel. Rollinson v. Martin’s Point Health Care Inc., No. 2:16-cv-00447-NT.
NEW WHITE PAPER PROPOSES OVERHAUL OF MEDICARE RISK ADJUSTMENT SYSTEM
Duke-Margolis Institute for Health Policy recently released a new white paper that examines the current challenges with the risk adjustment system and why it is critical to modernize the system. Researchers propose a pathway to address the challenges in effective risk adjustment in Medicare Advantage and the Medicare Shared Savings Program (SSP). The new approach would involve a clear vision and strategy to modernize accountable care payments and reporting for both risk and quality based on reliable data derived from EHR systems, the need to implement a transition path for aligning risk adjustment and performance reporting, and a routine audit system designed to work directly with electronic health source data to validate risk adjustment and performance measurement reporting. Click here to read the entire paper and recommendations.
INSPECTOR GENERAL NAMED AMONG TOP WOMEN LEADERS IN HEALTH CARE
Inspector General Christi A. Grimm, who will be speaking at next week’s RISE National, was selected as one of Modern Healthcare’s 2024 “Top Women Leaders in Healthcare.” The recognition celebrates the outstanding accomplishments of women across the nation, highlighting their contributions to their organizations and efforts in broadly improving care delivery, promoting health equity, shaping policy, and advancing gender equality in health care leadership. Grimm is recognized for her contributions to health care oversight spanning more than two decades of federal service. Appointed as inspector general in 2022, Grimm has led the agency in continually addressing the most consequential issues facing HHS programs and the people who rely on their services, including the access, quality, and safety of care; the protection of public health; and the prevention of fraud, waste, and abuse that harms people and diverts critical financial resources.