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April 15, 2014 Healthcare Fraud

American Family Care Inc. to Pay $1.2 Million to Settle Medicaid and Medicare Fraud Claims

In its latest efforts to combat Medicare fraud, the Department of Justice recently announced a $1.2 million settlement with an Alabama-based walk-in clinic. American Family Care, Inc. has agreed to the settlement after allegations of upcoding and fraudulent invoice practices surfaced when a whistleblower filed a qui tam lawsuit against the facility under the False Claims Act.

The federal government and the state of Alabama have agreed to divide the settlement according to their contribution to the Medicare and Medicaid reimbursements. The whistleblower’s reward has been set at approximately $204,000, according to her whistleblower attorney.

Do you know someone who is committing Medicare or Medicaid fraud? Contact Berger Montague today.

About the case

Under the rules of Medicare and Medicaid invoicing, a clinic must bill for the precise service rendered or it could be considered a false claim. In other words, if a doctor visits with a patient for 15 minutes, the facility must bill for that time.

What has become increasingly common is for medical facilities to bill for extended doctor-patient visits, or for visits between patients and office staff that did not involve the physician’s time. This practice is prohibited under the False Claims Act, and any facility caught engaging in this type of billing could face triple damages for each instance of a false claim.

According to allegations, American Family Care submitted invoices for outpatient physician visits that exceeded the actual amount of time the doctor spent with the patient.

Medicare billing protocol allows a facility to bill for doctor visits using a level system – level 1 visits result in a lower reimbursement, while level 5 visits result in the highest reimbursement. A level 5 visit may involve either a new or established patient and must include all three of the following: (i) a comprehensive review of the patient’s medical history; (ii) a comprehensive medical exam, and; (iii) highly-complex medical decision-making.

Conversely, a Level 1 visit generally involves a minor presenting problem, lasts between 10-15 minutes, and includes all of the following: (i) a problem-focused review of the patient’s medical history; (ii) a problem-focused examination of the patient; (iii) straightforward, non-complex medical decision-making.

Allegedly, American Family Care was routinely billing for level 5 visits where such visits did not actually occur.

Dangers of Medical Upcoding

Medical “upcoding” has plagued the Medicare and Medicaid systems for years. Recently, several state and federal agencies have taken aim at this practice, working tirelessly to identify and punish clinics, hospitals, specialists, and other medical professionals found exaggerating the extent of their services in order to obtain higher refunds from the government.

According to the relator’s whistleblower attorney, the plaintiff was working at American Family Care as part of the office management staff when she began to realize the practice and reported it immediately.

The Department of Health and Human Services said in a statement, “Billing the government for services not provided as claimed cheats both taxpayers and patients….We will pursue aggressively providers like American Family Care alleged to have improperly maximized reimbursements.”

Assistant U.S. Attorney for the Northern District of Alabama Joyce Vance also commented by adding, “The False Claims Act is a critical tool for weeding out fraud and protecting the taxpayers….My office will continue to return funds, like the $1.2 million in this case, to the taxpayers by proceeding against those who abuse our public health programs.”

Check Your Invoice and Report Suspicious Billing Activity

Upcoding can take many forms. Some offices bill for a 30-minute visit when the doctor only spent a few minutes with the patient. Other offices may claim the doctor visited with the patient when, in fact, it was a nurse or member of the staff.

If your recollection of your recent visit to the doctor does not match the subsequent invoice or information contained in your Explanation of Benefits (EOB), your office may be engaging in upcoding as well. For more information about this practice and how to file a whistleblower complaint, contact Berger Montague today.