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Rising Risks of Medicare Audits

Texas physician Dennis B. Barson Jr. and his medical clinic administrator are headed to prison. The 10-year prison sentence imposed against Barson, like an $8 million-plus healthcare fraud civil settlement announced by the Justice Department on July 24, 2014, illustrate the significant legal risks that physicians and other healthcare providers face when physician charges are improperly billed to Medicare, Medicaid, Tricare or other federal or state healthcare programs for services actually provided by non-physician staff.

Physicians and others should heed the lessons from these and other similar federal and state healthcare fraud enforcement actions when deciding when it is appropriate to bill federal healthcare programs for physician services where physicians assistants, nurse practitioners or other nursing staff or other non-physicians perform part or all of the procedures billed.

Dr. Barson Prison Sentence Highlights Criminal Risks

On Monday, July 27, 2015, U.S. District Court Judge Melinda Harmon ordered Barson to serve 120 months in prison, followed by three years of supervised release, and to pay restitution of approximately $1.2 million for his Nov. 5, 2014, conviction on all 20 counts of conspiracy to defraud Medicare of $2.1 million.

With Judge Harmon presiding, a Houston jury found Barson and his medical clinic administrator, Dario Juarez, 55 years old, guilty on the Medicare fraud charges last November. Another co-defendant, Edgar Shakbazyan, entered a guilty plea to the 21-count original indictment on Oct. 27, 2014. Shakbazyan, of Glendale, CA, was sentenced to 97 months in prison, while Juarez, of Beeville, Texas, received 130 months. Both will also serve three years of supervised release.

The jury convictions of Barson and Juarez followed a trial where Department of Justice prosecutors proved the healthcare fraud charges based on evidence that Barson, Juarez and Shakbazyan fraudulently billed Medicare for rectal sensation tests and electromyogram (EMG) studies of the anal or urethral sphincter that were never performed. Shakbazyan was additionally charged and pled guilty to conspiracy to pay kickbacks for payments made to recruiters and beneficiaries.

According to the testimony at trial, Barson was the only doctor affiliated with the medical clinic located at 8470 Gulf Freeway in Houston. However, Juarez represented himself to be a doctor and was the one who actually saw patients at the clinic. Barson, Juarez and Shakbazyan caused Medicare to be billed for procedures on 429 patients in just two months. The three men also billed Medicare for seeing more than 100 patients on 13 different days, including a high of 156 patients on July 13, 2009.

Barson’s defense attempted to convince the jury that he was a victim of identity theft and was not the perpetrator of the crimes. The conviction shows the jurors did not believe his story. The criminal charges are the result of a joint investigation conducted by agents of the FBI, Department of Health and Human Services-Office of Inspector General and the Medicaid Fraud Control Unit of the Texas Attorney General’s Office.

Margossian Settlement Shows Even More Common Civil Penalty Risks

Barson’s sentencing is one of a growing series of criminal convictions and sentencing of physicians and other healthcare providers for healthcare fraud by participating in arrangements where Medicare, Medicaid or other federal healthcare programs are billed for services not provided or not provided as required to qualify for reimbursement. On July 24, 2015, for instance, the U.S. Attorney for the Eastern District of New York and the State of New York announced that Brooklyn, NY, OB/GYN Haroutyoun Margossian will pay $8 million as part of a civil settlement with the U.S. and the state of New York. The settlement resolves charges brought under the federal False Claims Act and the New York False Claims Act that Margossian wrongfully billed Medicare and Medicaid for physician services for treatments of women suffering from urinary incontinence that unlicensed and often unsupervised staff, rather than Margossian or another physician, actually administered. The government has also filed a criminal charge against Margossian for making false statements to Medicare and entered into a deferred prosecution agreement with him.

Healthcare Fraud Investigations Raise Other Licensing and Practice Risks

The Barson and Margossian actions are just two of the already long and ever-growing list of criminal convictions, civil sanctions and civil settlements that federal and state healthcare fraud fighters already can count as notches of success in their war against healthcare fraud by physicians and other healthcare providers. With these successes fueling more investigations, physicians and others should be prepared to “do time” for improperly billing physician fees to federal healthcare programs for services not provided by the billing physician or for engaging in other inappropriate billing practices. Targets of audits and investigations also must prepare to deal with a host of other threats to their practices that almost inevitably arise regardless of whether the government investigation leads to a conviction, civil sanctions or a settlement.

As demonstrated by the Margossian settlement, even if physicians, practice management and others swept up into these investigations escape being criminally charged, subjected to civil sanctions or penalties or suspended or excluded from Medicare or other federal healthcare programs, healthcare fraud investigations or charges still will carry a heavy cost. Healthcare fraud warriors are realizing great success in securing civil sanctions and settlements, federal program exclusions and other civil and administrative punishments against physicians and other healthcare providers that the government accuses of violating the False Claims Act or other federal healthcare fraud rules.

Of course, whether healthcare fraud investigations ultimately result in any civil or criminal prosecution, conviction or settlement, physicians and other licensed healthcare providers under suspicion of healthcare fraud inevitably must deal with a broad range of other professional fallout. These activities almost always trigger scrutiny or other actions by employers and medical practices, healthcare organizations and licensing boards.

Act to Strengthen Your Defenses

Physicians and others should take steps to minimize the risk of an investigation or audit as well as take steps to help ensure sufficient resources to defend themselves if the government comes knocking.

Of course, the first step should be to take proper, well-documented efforts to comply with the rules. Physicians and the clinics, hospitals and management working with them should carefully evaluate what can be defensibly billed as physician services to Medicare or another federal healthcare program — keeping in mind that the billing party, not the government, generally bears the burden of proving that the amount bill qualifies for coverage. Physicians and others must carefully consider the adequacy of the physician’s involvement in prescribing and delivering services intended to be billed as physician services. In areas where questions could be raised, physicians and their organizations are strongly urged to take extra care to retain documentation of their analysis and efforts to verify their compliance, including consulting legal counsel for advice within the scope of attorney-client privilege.

Physicians and others working with them also should familiarize themselves with their obligations and rights under employment agreements, shareholder or partnership agreements, medical staff bylaws, managed care contracts, medical licensing board rules and the Health Care Quality And Improvement Act. In many cases, these arrangements will compel a physician to provide notice of an investigation, audit, allegation or charge, will trigger separate investigatory or disciplinary action against the physician, or both.

Along with the stiff civil sanctions or settlements imposed, physicians and others investigated or charged with healthcare fraud often incur significant legal and other costs. Physicians and others should consider if they can expect to have sufficient funds to pay the legal and other costs of their defense. Physicians and their organizations concerned about the adequacy of these resources may wish to explore, where available, raising their malpractice policy coverage limits, purchasing other supplemental coverage and taking similar steps to better position themselves. Physicians generally will want to review the adequacy and limits of the coverages that their practices provide, as well as consider the reliability of that coverage in the event that the physician is terminated or leaves the practice.

Because of the 10-year statute of limitations applicable to False Claims Act claims, billings can come back to haunt a physician 10 years after their submission. With this tremendously long liability period, even in the absence of government investigation, a significant risk exists that a physician may experience a practice relocation or other change that would affect his coverage during this period. When an investigation happens, the possibility that the physician will relocate his practice skyrockets. Consequently, physicians should consider purchasing tail coverage, maintaining separate, portable professional liability coverage or both.

Physicians and their practices also should consider the adequacy of the coverage provided by their professional liability or other policies. If the policy provides no or limited coverage, both the physician and his associated organization or practice may want to explore purchasing additional riders on the existing policy, purchasing separate coverage or both, as well as to raise the limits on the coverages.

Practice leaders, hospitals and other organizations that would be swept up into these investigations generally share an interest in ensuring that the physician possesses adequate resources to defend herself, as their organization and its billings are likely to be hurt if the physician is unable to defend the billings.

Better Way to Handle Soft-Tissue Injuries

The most costly problem facing employers today is work-related, soft-tissue injuries, more commonly known as work-related musculoskeletal disorders (WRMSD). According to OSHA, WRMSD account for 34% of lost work days in the U.S., as well as a third of the dollars spent in workers’ compensation and of all work-related injury cases.

Not surprisingly, soft tissue injuries — to the ligaments, tendons and fibers of the body that connect the bones — are difficult to diagnose. Standard diagnostic tests such as X-rays or imaging are frequently unable to document the presence of pain and loss of function. As a result, diagnoses are often subjective, leading to poor treatment (including unnecessary surgery and overuse of narcotics), extra lost work time, precariously high medical costs and, at times, fraudulent claims.

There is a need for accurate, timely and evidence-based diagnosis and treatment to curtail escalating costs and improve clinical outcomes, as these case studies show:

Case 1

A 44-year-old gentleman had undergone a baseline EFA. (The Electrodiagnostic Functional Assessment, or EFA, combines mutltichannel wireless electromyography (EMG) with range-of-motion testing and integrates that with a functional output). He is employed as an unloader in the shipping department. He alleged a work-related injury in October 2014, five weeks into his employment. He stated that he injured his shoulders when he put his hands out to block a fall. He complained of bilateral shoulder pain, radiating to the right upper extremity. He rated the pain as an eight on a scale of one to 10. But an EFA found no change from the baseline test.

Outcome: Because there was no change from his baseline, he was released from treatment and advised to see his primary care physician for any further medical needs.

Case 2

A 37-year-old gentleman was employed as a loader. He alleged a work injury in October 2014; when he bent to lift some ice, he felt a pain in his lower back. He complained of radiating lower back pain, into the left lower extremity, rated as a 6/10. He was referred by his occupational medicine doctor, as there were no objective findings, and his subjective complaints seemed out of proportion. An EFA revealed normal EMG activity, with chronic, unrelated pathology.

Outcome: When he returned for his follow-up evaluation after the EFA, he still had the same subjective complaints. After his doctor reviewed the EFA findings, he stated that he felt much better and asked for a release to return to  full duty at work.

Case 3

A 34-year-old gentleman was employed as a mix/truck driver. He had undergone a baseline EFA in June 2014 and had a work-related motor vehicle accident in September 2014. His head struck the roof of his truck, and he was not wearing a hard hat. He complained of neck, shoulder and head pain. When an EFA was compared with the baseline, chronic, unrelated pathology was noted. However, the comparison also revealed a change in the paracervical region. This change was consistent with the date and mechanism of injury and with his subjective complaints.

Outcome: The EFA comparison was able to identify and redirect care, away from the chiropractic care that he was receiving. After imaging studies were performed and the results found to be consistent with the EFA findings, he received site-specific, conservative care for his work-related injury, and his symptoms improved.

It is our opinion that the EFA-STM provides a book end solution, comparing a pre-injury test to a post-injury assessment to objectively and accurately determine AOECOE (arising out of employment/course of employment) status. One must base a medical evaluation on facts, not subjective complaints. When that is accomplished, proper diagnosis and treatment are rendered, and outcomes improved.

The authors invite you to join them at the NexGen Workers’ Compensation Summit 2015, to be held Jan. 13 in Carlsbad, CA. The conference, hosted by Emerge Diagnostics, is dedicated to past lessons from, the current status of and the future for workers’ compensation. The conference is an opportunity for companies to network and learn, as well as contribute personal experience to the general knowledge base for workers’ compensation. Six CEU credits are offered. For more information, click here.

New Data on Whether to Remove Surgical Hardware

Whether to remove hardware implanted in a patient during an earlier surgery raises questions because, while it’s obviously preferable to not leave hardware inside someone, removing the hardware requires cutting through scar tissue and can cause complications.A method we have begun to use and found beneficial after cervical and lumbar surgery is an electrodiagnostic functional assessment (EFA). The EFA combines electromyography (EMG), range of motion (ROM) and a functional capacity evaluation (FCE) to provide additional data about whether hardware removal is necessary.The approach could have broad implications because hardware removal accounts for as much as 33% of all planned orthopedic surgery.Two illustrative cases have been reviewed using the EFA to assess patients after lumbar fusion.The first case involves Mr. P. He is a 34-year-old who sustained a work-related injury on June 7, 2011. He complained of low back pain and right hip pain. He had an MRI that showed degenerative central disk herniation at L5-S1 with retrolisthesis. He failed eight weeks of physical therapy and a lumbar epidural steroid injection. His symptoms improved after this injection for more than three months, but he continued to complain of pain and had not worked for more than a year.

He underwent an L5-S1 posterior lumbar interbody fusion on July 17, 2012. He underwent a reoperation on March 26, 2013, for pseudoarthrosis at L5-S1 and had a fusion revision with bone morphogenic protein and an external bone stimulator.

Despite the operation and revision, he complained of persistent pain, and in September 2013 he continued to be taking Norco. He was still unable to work.

He had a CAT scan of the lumbar spine that showed what appeared to be a solid bony fusion at L5-S1. To try to determine the cause for his pain, he had an EFA test, which revealed appropriate EMG activity while sitting. He had moderate bilateral muscle spasms in the paraspinous muscles, and all other muscle groups evaluated exhibited appropriate EMG activity except for severe weakness in the bilateral quadratus lumborum muscles with compensation in the paraspinous muscles and hamstring muscles.

With these results, it was doubtful that the patient would benefit significantly from hardware removal. He had a hardware block with Marcaine and exhibited only transient benefit.

Nevertheless, because he remained disabled and on narcotics, he underwent a hardware removal and fusion exploration on Dec. 10, 2013. After this operation, he failed to improve, had the same pain, had weakness in his back muscles and still was on narcotic pain medication. He was ultimately released to pain management for weaning of pain medication.

With Mr. P, the EFA suggested he would not benefit from hardware removal, and he did not clinically benefit.

The next case is of Mr. M, a 48-year-old who sustained a work-related injury on Aug. 14, 2011. He underwent workup and had a decompression and fusion with instrumentation from L4 to the sacrum.

Before surgery, he failed physical therapy. After surgery, he had another course of physical therapy that did not benefit him. He continued to complain of bilateral low back pain and increased pain on the left radiating into the leg and foot. In addition, he complained of pins and needles in the same pattern into the left big toe. He was taking Lortab, OxyContin and Flexeril.

Because of his persistent pain, despite the fusion surgery and high doses of narcotics, he was scheduled for an EFA. The EFA revealed minimal bilateral vasoconstriction in the paraspinous muscles from L1 to the sacrum, quadratus lumborum and gluteal muscles that decreased with stretching, indicating a lack of clinical significance. The EFA thus provided objective evidence of noncompliance and lack of effort with all range-of-motion activities.

Taking into consideration the post-operative X-rays, MRI scans and EFA, it was deemed that the patient had reached maximal medical improvement and did not require hardware removal. Rapid weaning of his pain medication was recommended. He was ultimately released to return to work, with no lifting of more than 100 pounds and alternating sitting and standing as required. No further surgery was recommended.

Getting better data on whether to remove hardware is of overwhelming importance because this type of surgery not only requires a second surgical procedure in tissue that is already scarred but poses a risk for nerve injury, delayed fusion failure or progressive spinal deformity. Most series of patients undergoing hardware removal report a complication rate ranging from 3% to 20%. Additionally, hardware removal may not fully correct the problem because retained hardware may be only one of several pain generators in the post-operative spine—pain is the predominant indication for removal of the hardware.

Stabilization and fusion of the lumbar spine may be performed by using various anterior and posterior surgical techniques and a wide range of devices, including pedicle screws, facet screws and different types of vertebral cages and wiring techniques. The instrumentation is designed to stabilize and realign the spine and thereby enhance bone fusion. Post-operative imaging is typically used to determine positioning of the hardware and the progress of the fusion. But there is no reference standard for non-invasive imaging evaluation of spinal fusion. Radiography is the non-invasive procedure most commonly used for the assessment of fusion. Plain films can have limited benefits and frequent inaccuracy. Plain films can document broken or mal-positioned hardware, which is clinically useful. Flexion and extension plain X-rays are recommended for routine assessment of instrumented fusion, but it can be challenging to document translational motion and instability.

An MRI scan is one of the better imaging tools to evaluate post-operative changes in the spine. It is particularly useful for detecting and monitoring infection or post-operative fluid collections and scar formation. It is also excellent at showing soft tissue and neural compression and is beneficial in identifying new pathology above or below the level of fusion. However, MRI is less sensitive in identifying bone healing than plain films or CT scans and, thus, is not the best test to assess fusion of the lumbar spine. The sensitivity of the MRI scan is significantly affected by magnetic-susceptibility artifact, which is often a problem, particularly in the presence of stainless-steel devices or implants. Recent hardware is made of titanium alloys, which produce less severe magnetic artifacts but still present a significant obstacle to visualization of areas near spinal implants.

The CAT scan with sagittal and coronal reconstructions of the lumbar spine is the most sensitive test to determine fusion vs. pseudoarthrosis. It is the best at demonstrating bony union in multiple planes of imaging and is the least affected by metal artifact.

Many spine surgeons would agree that there are some absolute indications for removal of pedicle screw fixation of the lumbar spine. These more absolute indications include:  pseudoarthrosis, persistent infection or abscess after post-surgical debridement, mal-positioned hardware causing neural impingement and migration of hardware or interbody grafts causing neurologic injury. More relative indications for hardware removal include:  broken hardware, prominent hardware, adjacent-level disease, bony erosion around the pedicle screws and metal allergy.

Most studies show that even with hardware removed for absolute or strong relative indications there are favorable outcomes in only 50% to 60% of patients, with high failure rates. These studies are limited because they are retrospective and not evidence-based.

Currently, if well-positioned hardware is painful, there is a method for testing whether removal could be beneficial. The patient is asked to show the doctor the point of tenderness. A local anesthetic is injected at the site. If the patient reports decrease in pain, then it is concluded that the hardware is contributing to the pain. But there are no level 1 evidence-based studies that conclude that there is a high correlation of good outcome with patients who have favorable responses to hardware blocks.

Hardware injections are fraught with subjectivity. Untested findings may subject patients to unnecessary surgery to remove hardware. This is especially problematic in the occupational setting because secondary gain and symptom magnification can play a major role in work-related injuries and their ultimate treatment.

In conclusion: Patients undergoing back fusion are highly complicated cases. Persistent pain after a lumbar fusion can stem from numerous factors, including both physical and psychological ones. In patients who lack objective evidence radiographically for absolute indications for hardware removal, it can be extremely challenging to identify the pain generator.

The EFA could prove instrumental in providing further objective information to identify the cause of dysfunction, pain and disability in patients and could accelerate return to work, while minimizing potential highly complicated and unnecessary surgeries.

Certainly, further studies evaluating outcome are indicated in patients who have persistent pain after lumbar-fusion surgery, using EFA as part of the pre-operative assessment.

The author invites you to join him at the NexGen Workers’ Compensation Summit 2015, to be held Jan. 13 in Carlsbad, CA. The conference, hosted by Emerge Diagnostics, is dedicated to past lessons from, the current status of and the future for workers’ compensation. The conference is an opportunity for companies to network and learn, as well as contribute personal experience to the general knowledge base for workers’ compensation. Six CEU credits are offered. For more information, click here.

What Do New Workers' Compensation Reforms Sweeping the Country Have in Common?

AOECOE – Not Just Another Acronym

California Senate Bill 863 was passed in the fall of 2012 and went into effect on January 1, 2013. Senate Bill 1062 was just signed into law by Governor Mary Fallin of Oklahoma and will take effect January 1, 2014. On April 30, 2013, Tennessee Governor, Bill Haslam, signed into effect Senate Bill 200. House Bill 154 is expected to go into effect in Georgia in July, 2013. What are these bills? The first of many sweeping Workers' Compensation reforms. A common theme in these bills and other pending reforms is to level the playing field for employers and accept only those claims that arise out of the course and scope of employment, AOECOE.

A well-known term of art in the Workers' Compensation arena, AOECOE is not just an acronym. It is transitioning from a term of art to a statement with teeth, as reforms are actually including such wording into bills. The purpose of doing this is to establish whether an employee's alleged injury is work-related and happened in the course and scope of employment, or whether the injury is non-industrial or affected by third parties.

Workers' Compensation is a no fault system and thus benefits the injured worker, as, in order to receive benefits, he or she does not need to prove that the employer was negligent. However, it is the injured party's burden to show that the injury did, in fact, occur while at work, while employed as an employee and while undertaking some activity for the benefit of the employer. The injury itself must have been caused by the accident or employment conditions, and not from some other non-industrial related factors or degenerative factors.

The determination of AOECOE has long been an OSHA policy. OSHA's Injury and Illness Recordkeeping Regulation Section 1904.5: Determination of work-relatedness contained under section (a) basic requirement states in order for an injury or illness to be work-related an event or exposure in the work environment is either caused or contributed to the resulting condition or significantly aggravated a pre-existing injury or illness. Work-relatedness is presumed for injuries and illnesses resulting from events or exposures occurring in the work environment.

California's SB 863 was signed into law by Governor Brown on September 18, 2012, for a January 1, 2013, effective date. While certainly not the first bill to consider AOECOE issues, it is one of the most significant Workers' Compensation reform bills to specify AOECOE language. SB 863 calls for an Independent Medical Review (IMR). While this process may be problematic for an employer, since an IMR can be requested only by an injured worker following a denial, modification, or delay of a treatment request through the utilization review (UR) process, the bill specifically states that this does not apply if the injury is in question for AOECOE reasons.

On May 8, 2013, Oklahoma Governor Fallin signed into law historic Workers' Compensation reform, Senate Bill 1062. The bill defines compensable injury as arising out of the course and scope of employment and does not include: any strain, degeneration damage or harm to disease or condition of the eye or musculoskeletal structure or other body part resulting from the natural result of aging, osteoarthritis, degenerative process or pre-existing, except if a treating physician clearly confirms an identifiable and significant aggravation arising out of AOECOE.

On April 29, 2013, Tennessee Governor Haslam signed a Workers' Compensation reform bill into law, SB 200. It specifies that injuries arise out of and in the course and scope of employment only if proven by a preponderance of evidence that employment contributed more than 50% to causing the injury, AOECOE.

In my experience, the majority of injuries are real, but they are not AOECOE. Injured parties may exaggerate the severity and extent of their injuries or may attempt to hide pre-existing conditions. So how do any employers determine if injuries are AOECOE? The answer is simple. They need to ascertain what the employees' statuses are pre-injury. This is effectively done with baseline testing.

Baseline testing is a bookend solution. To be effective, it should be objective, meet the criteria for evidenced-based medicine, be job related and consistent with medical necessity. It needs to be specific to the metrics being evaluated. A good example of a specific baseline test that is recognized in some jurisdictions by statute is audiometric testing. Hearing tests are routinely done in environments with high noise exposure to determine a baseline that is referenced once a claim is filed. This is commonly referred to as the lock box defense.

Audiometric testing is beneficial for documenting hearing loss but is not designed to address other conditions such as musculoskeletal disorders (MSD). MSDs are the most frequent and costly claims for an employer. In order for a baseline test to be utilized for MSD, it must not only be objective and reproducible, it must contain measurements to ascertain electromyography (EMG), range of motion (ROM) and function.

In addition, baseline testing must be legally defensible. In 1990, Congress enacted the Americans with Disabilities Act that outlines what makes a legally defensible test. To be legally defensible, the testing needs to be job-related and consistent with business necessity i.e. the employer must show that it “substantially promote[s]” the business' needs. It must be repeatable, objective and address functionality. Also, since baseline testing is considered to be a medical exam, it needs to evaluate some functions of the job.

Baseline testing is not a post-offer, pre-placement test, as it can not identify disability because the data is not read and no hiring decisions are made with baseline evaluations. When a work-related injury occurs, a post loss test is conducted, at which time the baseline test is read and compared to the post loss results, hence the bookends.

When compared, the results can determine if an injury exists and if it has arisen out of the course and scope of employment, thus determining an employer's true responsibility. Good baseline testing is non-discriminatory and prevents “false” claims. The sweeping Workers' Compensation reforms allow for a new definition of “false” claim: one that is not AOECOE. A false claim no longer means fraud! A proven example of an effective baseline test is the EFA-STM.

Workers' Compensation statutes are helping employers by allowing them to accept the claims that are only AOECOE. Employers need to see that they comply with legislation, and baseline testing now gives them an objective assessment to do just that.