How can a doctor or medical practice in New York find themselves the focus of a health care fraud or overbilling investigation, when they think they followed the rules correctly?

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Health care providers can become the subject of a health care fraud or overbilling investigation in several ways, including: (1) billing CPT codes more frequently than their comparable peers, which raises an actuarial red flag that can draw scrutiny from regulators and insurance companies; (2) an employee believing that improper practices are occurring and initiating a “whistleblower” lawsuit; and/or, (3) engaging in practices that a patient or an outside observer views as suspicious.

An investigation focused on improper billing can frequently occur where a health care provider did not intend to do anything wrong, and often did not do anything wrong. Investigators usually do not have a full understanding of the day-to-day work at a health care provider’s office and they can make assumptions or mistakes, for example, about: (1) “overbilling” occurring because they do not understand where the provider has created efficiencies; (2) the details of a specific medical procedure, how it can be conducted, and how it can be properly billed; and/or (3) basic issues relating to CPT coding. In my legal career, I have seen regulators and auditors make mistakes about all three of these things — sometimes in outrageous and surprising ways.

I have also seen many situations where providers fail to adequately learn about proper CPT coding practices, and fail to have their support staff trained on these issues. Sometimes providers rely on third-party billing companies to assist them. I have also seen providers rely on recommendations from medical device manufacturers about issues like what kind of staff can perform a procedure, how the procedure should be conducted, and what CPT codes should be billed. Relying too much on outside billers or medical device manufacturers for billing advice can be a recipe for unintentionally committing serious billing errors. Ways to avoid these problems include routinely having an independent auditor review billing practices, and to have staff participate in regular trainings about health care billing practices and other related issues.  

Ensuring that staff receive ongoing training and establishing a compliance program to regularly review practices also protects a provider against unfair “whistleblower” lawsuits alleging fraud. Create a strong office culture for training and compliance. This makes errors less likely and increases the chance that if staff see errors occurring, they will bring them to the attention of a provider instead of going outside the organization. In addition, having an independent auditor regularly review practices can also correct misinformation among staff and prevent it from leading to mistaken views that improper billing is happening when, in fact, it is not.

Regulators and insurance companies are under enormous pressure to investigate health care providers and recoup the money. As a result, they can often be overaggressive and make mistakes. Innocent health care providers often end up in the crosshairs of these unfair investigations. Understanding the issues described here, and creating better practices around training and compliance, will help a well-intentioned provider be in the best position to respond to an investigation if it occurs.

Answered 06/29/2017

Disclaimer: This answer was provided by an attorney selected to Super Lawyers, and is intended to be an educated opinion only. This answer should not be relied upon as legal advice, nor construed as a form of attorney-client relationship.


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