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Oversight of Quality of Care in Medicaid Home and Community Based Services Waiver Programs
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Seven of the twenty-five States that the OIG reviewed did not have adequate systems to ensure the quality of care provided to beneficiaries. Although CMS renewed the waiver programs in all seven of these States, three did not adequately correct identified problems. Not only did these States fail to correct these problems before renewal of their programs, they also had still not adequately addressed the problems long after renewal. In addition, CMS did not consistently use the few tools it has to ensure that States correct problems related to quality of care.
See on www.oig.hhs.gov
Physician’s Own Use of Hydrocodone Warrants Medicare Exclusion
Health care fraud is not limited to financial misconduct. Improper drug use can lead to exclusion from Medicare.
In the unpublished opinion from last week reproduced below, the U.S. Court of Appeals (4th Cir.) affirmed a district court’s decision that barred a West Virginia doctor from practicing in Medicare programs for five years after the doctor diverted hydrocodone samples for his personal use., This case has limited precedential value but physicians and other healthcare providers should be aware of how their personal conduct can have serious repercussions.
(By the way, if this were a Florida physician, he would not be allowed to renew his license in Florida by virtue of being on the excluded entities list. New thing as of 7/1/12. The conviction, as well, could knock him out.)
Morgan v. Sebelius
U.S. Court of Appeals, Fourth Circuit
10-2270
June 14, 2012
(Unpublished)
May 17, 2012
BRETON LEE MORGAN, M.D., Plaintiff-Appellant, v. KATHLEEN SEBELIUS, Secretary of Department of Health and Human Services, Defendant-Appellee.
Case History and Disposition
Appeal from the United States District Court for the Southern District of West Virginia, at Huntington, Robert C. Chambers, District Judge.
Affirmed by unpublished per curiam opinion.
Opinion Text
PER CURIAM:
Breton Lee Morgan appeals a district court order dismissing his action challenging the decision of the Secretary of the United States Department of Health and Human Services (“the Secretary”) to exclude him for five years from participating in Medicare, Medicaid, and all other federally sponsored health care programs pursuant to the applicable terms of 42 U.S.C.A. § 1320a-7(a)(3) (West 2011). Finding no error, we affirm.
I.
Morgan is a physician licensed to practice medicine in West Virginia. In March 2007, he pled guilty to one count of violating 21 U.S.C. § 843(a)(3), which proscribes “knowingly or intentionally … acquir[ing] or obtain[ing] possession of a controlled substance by misrepresentation, fraud, forgery, deception, or subterfuge.” 21 U.S.C.A. § 843(a)(3) (West 1999). His plea was based upon several occasions in which Morgan obtained free hydrocodone samples from pharmaceutical representatives for his personal use by leading the representatives to believe that he would be giving the samples to his patients for medical purposes. As a result of the plea, Morgan was sentenced to 30 days’ imprisonment and three months of supervised release.
On May 30, 2008, the Inspector General (“I.G.”) of the Department of Health and Human Services (“HHS”) wrote Morgan, notifying him that he would be excluded for five years from participating in Medicare, Medicaid, and all other federal health-care programs pursuant to the applicable terms of 42 U.S.C.A. § 1320a-7(a)(3). This statute requires the Secretary to impose such an exclusion on “[a]ny individual or entity that has been convicted for an offense which occurred after August 21, 1996, under Federal or State law, in connection with the delivery of a health care item or service” if that offense consists of a “felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.” 42 U.S.C.A. § 1320-7(a)(3).
Morgan appealed the I.G.’s decision in a proceeding before an Administrative Law Judge (“ALJ”) in HHS’s Departmental Appeals Board (“DAB”) Civil Remedies Division. The ALJ found that the I.G. had a sufficient basis to exclude Morgan and that the five-year term of the exclusion was not unreasonable in light of applicable law.
Morgan then appealed the ALJ’s decision to the DAB Appellate Division on April 3, 2009. In his proceeding before the Appeals Board (the “Board”), Morgan argued, as is relevant here, that to warrant an exclusion under 42 U.S.C.A. § 1320a-7(a)(3), a conviction must be for an offense that relates to financial misconduct. Morgan maintained that his fraud conviction was not related to “financial misconduct” since he neither had a corrupt motive nor received any substantial pecuniary benefit in committing the crime to which he pled guilty. The Board rejected Morgan’s argument, finding that Morgan was excludable under § 1320a-7(a)(3) because his conviction constituted “fraud” within the plain meaning of the statute regardless of whether it was related to financial misconduct. The Board additionally concluded, in any event, that his crime was related to financial misconduct insofar as he “derived some unquantifiable measure of pecuniary value by illegally diverting the controlled substances.”
Morgan subsequently brought an action in federal district court, asserting that the Board erred in failing to recognize that § 1320a-7(a)(3) applies only to offenses relating to financial misconduct. Concluding that the statute unambiguously is not limited to offenses relating to financial misconduct, the district court dismissed Morgan’s action.
II.
Reiterating his argument that § 1320a-7(a)(3) is limited to offenses relating to financial misconduct, Morgan argues that the district court erred in dismissing his suit. We disagree.
“We review questions of statutory construction de novo.” Orquera v. Ashcroft, 357 F.3d 413, 418 (4th Cir. 2003). Because the Secretary is charged with administering § 1320a-7(a)(3), the established rules of deference in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), guide our analysis. Under Chevron, if a statute is unambiguous regarding the question presented, the statute’s plain meaning controls. See Saintha v. Mukasey, 516 F.3d 243, 251 (4th Cir. 2008). However, “[i]f … the statute is silent or ambiguous with respect to the specific issue before us, the question for this court becomes whether the [Secretary’s] interpretation ‘is based on a permissible construction of the statute.’” Id. (quoting Chevron, 467 U.S. at 843).
Under Chevron’s first step, we “employ[] traditional tools of statutory construction” in considering whether Congress addressed “the precise question at issue.” Chevron, 467 U.S. at 842, 843 n.9. In doing so, “we begin with the text and structure of the statute.” National Elec. Mfrs. Ass’n v. United States Dep’t of Energy, 654 F.3d 496, 504 (4th Cir. 2011).
Congress required the Secretary to exclude from participation in federal health-care programs any person who has been convicted of an offense “in connection with the delivery of a health care item or service” if that “offense consist[s] of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.” 42 U.S.C.A. § 1320-7(a)(3). It is undisputed that Morgan was convicted of a felony relating to fraud and connected to the delivery of health care. He nevertheless maintains that his conviction was not for “a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct” since his offense did not relate to financial misconduct. That is incorrect.
The applicable language makes clear that to warrant mandatory exclusion, an offense need only relate to at least one of five categories: (1) fraud, (2) theft, (3) embezzlement, (4) breach of fiduciary responsibility, or (5) other financial misconduct. The argument that the presence of the fifth category, “other financial misconduct,” somehow narrows the meaning of “fraud” from its ordinary usage is unpersuasive. See Carbon Fuel Co. v. USX Corp., 100 F.3d 1124, 1133 (4th Cir. 1996) (explaining that unless there is “explicit legislative intent to the contrary,” we must give words in a statute their “plain and ordinary meaning”). Morgan maintains that if the presence of the word “other” did not have this narrowing effect, “there would be no reason to have the word ‘other’ in the statute.” Appellant’s brief at 11. But that is simply not correct. That the fifth category is “other financial misconduct” reflects the fact that the other four categories can, themselves, relate to financial misconduct. In this way, the presence of “other” eliminates the possible confusion that could have resulted from a statute that applied to “embezzlement… or financial misconduct.”
In fact, it is Morgan’s interpretation that would render much of the language surplusage. See Gustafson v. Alloyd Co., 513 U.S. 561, 574 (1995) (explaining that a court should “avoid a reading which renders some words altogether redundant”). Had Congress intended that an offense must relate to financial misconduct for the mandatory exclusion to apply, then it could have omitted the terms “fraud,” “theft,” “embezzlement,” and “breach of fiduciary responsibility” and simply required the exclusion for offenses “relating to financial misconduct.”
Furthermore, Morgan’s interpretation would not serve the statute’s purposes. See, e.g., United States Nat’l Bank of Oregon v. Independent Ins. Agents of Am., Inc., 508 U.S. 439, 455 (1993) (explaining that “[i]n expounding a statute, we must not be guided by a single sentence or member of a sentence, but look to the provisions of the whole law, and to its object and policy” (internal quotation marks omitted)). Congress enacted the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), of which 42 U.S.C. § 1320-7(a)(3) is a part, “to combat waste, fraud, and abuse in health insurance and health care delivery.” Pub. L. No. 104-191, 110 Stat. 1936, 1936 (1996). In fact, the legislative history to § 1320-7(a)(3) as it was originally enacted indicates that it was specifically intended to protect federal programs from untrustworthy individuals and to “provide a clear and strong deterrent against the commission of criminal acts.” * S. Rep. 100-109, at 5 (1987), reprinted in 1987 U.S.C.C.A.N. 682, 686. These purposes indicate that Congress was targeting fraud generally, not simply fraud relating to financial misconduct, and none of the purposes would be served by narrowing the scope of the statute as Morgan urges.
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* As originally enacted, the statute made exclusion from the federal programs only optional as opposed to mandatory.
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Finally, it is worth noting that the Senate Report that accompanied the statute as originally enacted described the provision as applying to “a criminal offense relating to fraud, theft, embezzlement, breach of fiduciary responsibility or financial abuse.” S. Rep. No. 100-109, at 6 (1987), reprinted in 1987 U.S.C.C.A.N. 682, 687; see National Elec. Mfrs. Ass’n, 654 F.3d at 504-05 (“[W]e have described legislative history as one of the traditional tools of interpretation to be consulted at Chevron’s step one.”). Considering that the word “other” did not even appear in the description, there was no suggestion that Congress intended that “fraud” would have anything other than its ordinary meaning.
For all of these reasons, we hold that regardless of whether the district court correctly concluded that the statute unambiguously does not require that any fraud relate to financial misconduct in order to warrant the mandatory five-year exclusion, the Secretary’s construction was, at the very least, a permissible one to which we must defer.
III.
Finding no error, we affirm the district court’s dismissal of Morgan’s case.
AFFIRMED.
Criminal and Civil Enforcement | Fraud | Office of Inspector General | U.S. Department of Health and Human Services
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Enforcement Actions | Fraud | Office of Inspector General: This site provides current and archived enforcement actions by the OIG. It explains who the bad guys are and the bad things that they did.
See on oig.hhs.gov
Simplified Analytics: Fraud detection in Medicaid/Medicare
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Experts estimate that abuses of Medicaid eat up at least 10 percent of the program’s total cost all over USA, which is a waste of more than a $80 billion a year.
See on simplified-analytics.blogspot.fr
ASA Comments on Long Awaited OIG Advisory Opinion on the Company Model
See on Scoop.it – Hot Topics in Healthcare Law and Regulation
HHS Issues Advisory Opinion on the Company Model.
See on www.asahq.org
Medicare And Medicaid Fraud Is Costing Taxpayers Billions – Forbes
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Criminals scam Medicare and Medicaid — and taxpayers — out of billions of dollars a year; the federal government is addressing the problem, but too slow and too late.
See on www.forbes.com
Conn. AG sues 28 in dental Medicaid fraud case
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Just days after a Connecticut dentist and former dentist were arrested for Medicaid fraud, the attorney general (AG) of Connecticut has brought a civil action against 26 other individuals, dental practices, and corporations for their alleged role…
See on index.aspx
Coast Medicare fraud hunt
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“MEDICARE will not confirm it has launched investigations into fraud by Sunshine Coast doctors but says it will pursue any tipoff it receives.”
See on www.sunshinecoastdaily.com.au
Physician’s Assistant Suspended for Taking Kickbacks
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According to the Rhode Island Department of Health (HEALTH), Michael J. Cobb engaged in unprofessional conduct by violating Federal Anti-Kickback laws. Cobb worked as a physician assistant to two surgeons.
See on www.golocalprov.com
Four Hot Topics in Healthcare Law Affecting Physician Practices
Constitutionality of Health Care Reform
Increased Regulatory Scrutiny
“Doc Fix”
New Alternative Structures in Physician Practices
Constitutionality
- More than 30 legal challenges have been filed challenging the health care reform law.
- Most cases have focused on the individual mandate to purchase health insurance.
- When the Supreme Court considers this issue in the Spring, some legal scholars believe the court’s four liberal(ish) justices – Justices Ginsberg, Breyer, Sotomayor, and Kagan – will vote to uphold the law.
- But there’s no clear consensus on how the five more conservative justices will rule, especially Justices Kennedy, Alito, and Roberts.
Increased Regulatory Scrutiny
Health care reform has made health care fraud much more dangerous:
- A physician no longer must have direct knowledge that his or her actions constituted a violation to be prosecuted.
- Activities of staff may be more easily attributed to the physician.
- There is new liability for making a false statement or material error on provider applications.
- Keeping an overpayment for longer than 60 days after discovery is now a violation of the False Claims Act.
- Physicians providing diagnostic services like MRI, PET and CT scans must provide information to patients in writing about the other area providers.
- New proposed rule (12/19/11) requires applicable manufacturers of drugs, devices, etc. covered by Medicare, Medicaid, or CHIP to report annually to HHS certain payments/gifts to physicians or teaching hospitals.
- There is a significant increase in targeted health care fraud enforcement efforts by the government’s Health Care Fraud Prevention and Enforcement Action Team (“HEAT”).
- Latest Enforcement Actions:
– 3 Patient Recruiters for Miami HHAs Sentenced to Prison in $25 Million Fraud Scheme (12/14)
– Philadelphia Doctor Charged With Running Pill Mill (12/14)
– 14 NJ health care providers arrested & charged with taking cash payments for patient referrals (12/12)
- HIPAA Issues
– Since HIPAA was passed, there have been 12,781 cases resolved with corrective action and 484 privacy breach investigations referred to DOJ for possible criminal prosecution.
– Theft or possible loss of laptops and other portable devices – 66% of the material breaches. Other common violations – improper disposal of PHI (e.g., in trash cans accessible to the public).
– One notorious example: Massachusetts General Hospital — February 2011 – PHI of 192 patients, including HIV patients, was lost when an employee left files on a subway while commuting to work. $1M fine plus corrective action.
- Florida law provides similar tools for Florida regulators – imposing possible civil and criminal penalties (and loss of license) even when no Medicaid or Medicare patients are seen
– Patient Self-Referral Act – like Stark but arguably more expansive, prohibits a physician in Florida from referring patients for the provision of any health services to an entity in which the physician (or a family member) has an investment interest or is an investor unless an exception applies.
– Patient Brokering Law – like the federal anti-kickback statute, prohibits offering, giving, or receiving any form of compensation for the referral of a health care service.
– Ownership and Control of Patient Records – like HIPAA, but more expansive.
– Fee-Splitting – enforced under the Patient Brokering Law and by Professional Boards.
“Doc Fix”
“Doc fix” is a misnomer because it isn’t the docs who are broken. Though they may be if their Medicare reimbursement is actually cut by 27% percent as slated for Jan. 1, 2012.
The cut is based on the Sustainable Growth Formula (“SGR”), a 1997 payment plan for Medicare. It links physicians’ costs, Medicare enrollment, and the GDP.
Last week, the House passed a payroll tax extension bill which included a two-year “fix” to the formula for Medicare payments to doctors. The Senate doesn’t like the House version and will not pass it. This week the Senate passed a bipartisan bill which included a “fix,” but the House has rejected it.
Alternative Practice Models
Health care reform, the “Doc Fix” uncertainty, regulatory concerns, and the economy, are all pushing a realignment of health care providers and providing new incentives for consolidation and other practice models:
- Consolidation of practices – single specialty and multi-specialty
- Hospitals are buying physician practices again (and physicians are selling).
- Physician-Hospital co-management arrangements are being seen in certain hospital departments (e.g., cardiology).
- Joint ventures with hospitals and private companies to set up ASCs
- MSOs buying or managing physician practices, with physician ownership.
- Electing a non-participating Medicare provider or opting out of Medicare
- Converting to a concierge practice
- Expanding services (e.g., dentists providing Botox)
- There are more practice breakups and departing physicians as a result of financial pressures and differing opinions on how to proceed.
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