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December 17, 2018 Healthcare Fraud

What are Medically Unnecessary Services?

Medical necessity has implications for good, safe patient care and for reimbursement or payment decisions. Although an unnecessary treatment is not always dangerous, it could be used in place of a more appropriate treatment. It could also have side effects or risks that are not justified when the treatment is not necessary in the first place. Separately, does anyone want to pay for drugs or treatments that are not needed?

This post will focus on the second issue, payment for medically unnecessary treatments. More specifically, although patients, private insurers or government healthcare programs can be billed for medically unnecessary treatments, we will focus on claims submitted to government healthcare programs, and whether those actions may constitute fraud.

“Medical Necessity” Definition

First, what is meant by “medical necessity” or its converse, medically unnecessary treatment? In 1998, the American Medical Association published the following definition of “medical necessity”:

Health care services or products that a prudent physician would provide to a patient for the purpose of preventing, diagnosing or treating an illness, injury, disease or its symptoms in a manner that is: (a) in accordance with generally accepted standards of medical practice; (b) clinically appropriate in terms of type, frequency, extent, site, and duration; and (c) not primarily … for the convenience of the patient, treating physician, or other health care provider.

AMA Policy, H-320.953: Definitions of “Medical Necessity.”

The concept of medically necessary treatment is also incorporated into Medicare’s coverage limitations, where coverage is limited to items and services that are “reasonable and necessary for the diagnosis or treatment of illness or injury.” 42 USC 1395y(a)(1)(A).

Medicare also requires healthcare practitioners and providers to assure that health services ordered for government patients are “provided economically and only when, and to the extent, medically necessary.” 42 USC 1320c-5(a)(1). Medicaid and Tricare also have requirements about a need for any medical services or products that are prescribed and billed to those programs.

What Kinds of Treatments Can Be Considered Medically Unnecessary?

Medically unnecessary treatments can be either services or products. Examples include widespread testing that is not truly needed; ambulance transport that is not appropriate because patients are fully mobile and not at risk; a repeated and premature rush to expensive or invasive treatment before trying other drugs or physical therapy – all of these can fall into the category of medically unnecessary treatment.

With the vastly increased number of drugs that are marketed directly to consumers (“DTC advertising”), through TV commercials, magazine ads or direct mailers, there is particular concern that patient demands are causing unnecessary prescriptions, often for expensive brand-name drugs. See, e.g., American Medical Association, “AMA calls for ban on direct-to-consumer advertising of prescription drugs.” Accessed December 9, 2015. Oftentimes these advertising blitzes are reinforced through aggressive marketing campaigns and inducements aimed at prescribers.

What About Treatment That Doesn’t Work?

Because medicine is not an exact science, there will often be situations where a treatment that is prescribed might not be strictly necessary but is prescribed with good faith medical judgment that it could be helpful. Sometimes there is not a clear diagnosis, so a medicine is prescribed that ends up doing no good or tests are ordered that turn out to be negative. Those situations do not constitute medically unnecessary treatments. Even a physician who is a bit of an outlier in terms of how often she prescribes a certain drug might simply be more aggressive in her treatment and not cross the line into a lack of medical necessity.

As the court explained in U.S. ex rel. Allen v. Alere Home Monitoring, Inc., 2018 WL 4119667 (D. Mass. Aug. 29, 2018), one must “distinguish between a claim that involved genuine medical judgment and a claim that was medically unnecessary.”  Id. at *7. Determinations in this area are quite nuanced and often turn on a gross overuse of a particular product or procedure, accompanied by a direct financial benefit to the prescriber.  See, e.g., U.S. ex rel. Polukoff v. St. Mark’s Hosp., 895 F.3d 730, 737 (10th Cir. 2018)(noting that the “Cleveland Clinic reported that it had performed 37 PFO closures in 2010; during that same time period [defendant’s] billing records indicate that he had performed 861”).

When Might You Suspect That Healthcare Providers are Billing the Government for Medically Unnecessary Services or Products?

Obviously, you could be employed in a setting where you observe such behavior. For example, if you work in an Emergency Department, you might wonder why so many patients are sent for chest X-rays – even if they came in with a complaint of dizziness, muscle spasms or severe indigestion. Although some screening of underserved populations for pulmonary disease or TB might warrant testing, widespread chest X-rays could be a simple money-making proposition for the hospital, with certain risks to patients.  See generally Routine Admission CXR, Core EM, Jan 4, 2017. Accessed 11/26/2018.

In United States ex rel. Scalamogna v. Steel Valley Ambulance, 2018 WL 3122391 (W.D. Pa. 2018), the whistleblower who filed a complaint under the False Claims Act was an EMT who worked for an ambulance company and observed numerous instances when the company “billed for services that were medically unnecessary, such as transporting patients by ambulance when Defendants could have used a wheelchair van.”  Id. at *2.

Similarly, if you work for a home health agency, you might notice that certain breathing treatments are routinely administered to all patients, without regard to whether the treatments are needed.

Possibly you work as a salesperson for a medical device or drug company, and you are instructed to present a sales pitch that encourages doctors to provide unnecessary treatment – and your sales demonstrate that it is actually happening.  See United States ex rel. Lutz v. Berkeley Heartlab, Inc., 225 F.Supp.3d 487, 501 (D.S.C. 2016) (upholding allegations under the False Claims Act against a laboratory for “encourag[ing] physicians to order tests that were medically unnecessary”). And sometimes even a patient or patient’s family might notice that certain treatments or products are being pushed on them, and a conversation with the healthcare provider leads them to believe that the practice is widespread.

Contact Berger Montague to Learn More

If you have a solid suspicion that services or products are being prescribed without legitimate medical need, and you observe that the patients being targeted include recipients of government health benefits, consider speaking with an experienced attorney to explore the possibility that the government is being fraudulently billed for medically unnecessary services.

There are three easy ways to contact our firm for a free, confidential evaluation with one of our whistleblower attorneys:

  1. Fill out the contact form on this page.
  2. Email [email protected]
  3. Call (844) 781-3088

Your submission will be reviewed by a Berger Montague qui tam attorney and remain confidential.