Legal roundup: Audits increase

Sunday, December 28, 2008

YARMOUTH, Maine - With the economy tanking and Medicare fraud and abuse booming, it's no surprise that industry attorneys recently reported an increase in audits. When HME News caught up with them recently, they advised providers to tread carefully on a number of fronts.

'Keep an eye out'
After about two years of minimal activity, industry attorneys have noticed an uptick in the number of providers being audited by the DME MACs, the PSCs and even commercial insurers.

"When the money is flowing, no one goes after the quarter on the table because there are $1 bills floating around," said Jeff Baird, a healthcare attorney at Brown & Fortunato in Amarillo, Texas. "But when money is tight--and, obviously, it is in the healthcare arena right now--everyone's grabbing for that quarter."

Providers with multiple branches, especially, need to keep an eye out, industry attorneys say.

"I'm seeing problems with sloppiness at branch offices," said Neil Caesar, president of the Health Law Center in Greenville, S.C. "It's more important than ever that the care a provider puts into its headquarters is extended to its branch offices."

Increased audits often mean increased pre-payment reviews, which causes serious cash flow problems for providers, Caesar said.

Paying cash for oxygen services
Providers have been grappling with whether or not to continue servicing capped oxygen patients in 2009. If they opt out and they think they can sell services to those patients for a fee, they need to think again, industry attorneys said.

"It's a bad assumption," Caesar said. "It implicates participation and anti-kickback rules."

To make such an arrangement work, providers would have to create a separate business entity for those patients, Caesar said. Even then, providers would have to worry about privacy rules.

"The sharing of info between the two entities creates HIPAA problems," he said.

Are you a creditor?
A new "red flag" rule from the Federal Trade Commission requires creditors to have theft protection, detection and reporting in place. What does that have to do with providers?

"If a provider allows a patient to pay his co-pay next month or pay his co-pay in monthly payments over the next six months, the provider, it appears, falls within the definition of a creditor," Baird said.