Maine Dermatology Settles Medicare Fraud Allegations for Over $600,000

With a current caseload of over 50 million enrollees, and as one of the prime programs targeted for fraud nationally, the Medicare program has a lot on its plate. In today’s case, we review a recent Medicare settlement between the federal government, the state government of Maine, and a Portland-area dermatology clinic accused of bilking the government out of hundreds of thousands of dollars through intentionally fraudulent billing practices.

While this particular case did not involve the help of a whistleblower, the facts present an all-too-common scenario with which all healthcare professionals should be familiar, particularly those involved in billing and revenue cycle management.

Details of the allegations against Maine Dermatology

Under Medicare guidelines, certain non-cosmetic dermatological procedures are covered either partially or in full, including various screenings and preventative care services. Moreover, practitioners are permitted to routinely bill for Evaluation & Management (E&M) services, also known as office visits, in the event a patient is scheduled for a procedure. However, in the event that a patient is also scheduled to appear at the clinic for a medical procedure or additional service, the E&M visit is only billable if it is a “significant, separately identifiable service from the other procedures provided.”

In this case, the government alleged that Maine Dermatology consistently and routinely billed for E&M visits that occurred on the same day as scheduled medical procedure and that the office visits did not meet the definition of a separate and distinct service. The office is also alleged to have billed for the most expensive office visit code, which is to be used only in the event of a lengthy and complex office visit. These billing schemes are alleged to have occurred from June 2010 through August 2013 and to have cost taxpayers an estimated $314,908.

Settlement agreement

In October, the Department of Justice filed a complaint seeking double damages to the tune of $633,520 against Maine Dermatology – a figure far less than the statutory maximum treble (triple) damages.

The U.S. Attorney’s Office said in a statement, “Defendant Maine Dermatology acted with knowledge or reckless disregard of clear guidance from the Medicare Program that its Medicare claims at issue were ineligible for payment…. [U]nder Medicare, any services billed must be medically necessary, and any provider billing Medicare must have documentation showing the medical necessity of those services.”[1. “Lincolnville Medical Practice Settles Federal Health Care Billing Complaint,” Department of Justice, October 27, 2015, http://www.justice.gov/usao-me/pr/lincolnville-medical-practice-settles-federal-health-care-billing-complaint.]

Presumably due to the fact this was Maine Dermatology’s first offense, the company was not required to enter into a corporate integrity agreement, nor was it suspended from enrollment in Medicare or Medicaid.