Medicare Fraud & Abuse Statutes
Every year, billions of dollars are lost to fraud in both federal and state health care programs. Each dollar lost is a dollar not used toward home care for seniors, or research into HIV and other such treatments. It is money that won't be spent on immunizing children or discovering more effective treatments for cancer and other diseases. Some health care fraud schemes even threaten the lives of patients directly. To combat these horrible crimes, governments have enacted statutes, laws and regulations designed to punish those who take advantage of the system.
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Types of Medicare Fraud and Abuse
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Some of the fraud and abuse practices include billing for services that are never rendered, billing for products that are never sent, unbundling or misrepresenting services, billing for unnecessary medical services, duplicate billing, increasing service units that are paid by rate, falsifying reports, kickbacks and the like.
Bribery Statute
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In May of 2000 the U.S. Supreme Court determined when a federal bribery statute could be used in cases of Medicare fraud that directly affected health care providers. The statute imposes either a fine or imprisonment for up to 10 years, or both can apply to those convicted under this statute. Organizations that receive payments from Medicare need to be aware because under this statute the government can now prosecute fraudulent activity. If a health care provider does not accept Medicare as a form of payment, the provider should still be aware since the acceptance of any federal funding could possibly be reason to invoke this statute in the case of fraud.
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Stark Statue: The Physician Self-Referral Prohibition
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According to the Stark Statute any entity that provides health services is prohibited from submitting Medicare claims for a patient if that patient was referred to them by a physician with whom the health care entity has an inappropriate financial relationship. Congress found that these inappropriate financial relationships compromise the physician's professional judgment when it comes to deciding whether a service is truly a medical necessity, or whether it is safe or effective. Studies showed that physicians with financial relationships with particular medical service providers, and/or hospitals, used those providers' services more often than physicians who did not have the same financial relationships. The Stark Statute was designed to reduce the financial losses that these questionable relationship and practices created.
Stark I and II
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The Stark Law was enacted in three parts that combined are referred to as the "Stark Statute." Stark I was enacted in 1989 and prevented physicians who had inappropriate financial relationships with clinical labs from referring patients to these clinical laboratories for services. Congress amended this in 1993 with Stark II. This amendment prevented physicians from doing the same thing only this time included 10 additional health care service providers: physical therapy; radiology; inpatient and outpatient hospital services; durable medical equipment and supplies; occupational therapy; radiation therapy; prosthetics, orthotics and prosthetic devices and supplies; parenteral and enteral nutrients; home health services; and outpatient prescription drugs.
Anti-Kickback Statute
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The Anti-Kickback Statute is found in § 1128B of the Social Security Act, (42 U.S.C. § 1320a-7b). It states that it is a criminal offense to willfully and knowingly offer, solicit, pay or receive any payment to reward or induce referrals for services or items which are reimbursable by federal health care programs. Both parties are ascribed criminal liability when involved in a violation of this anti-kickback statute and both may receive penalties including not being paid for claims, being excluded from the Medicare program, having to pay for civil penalties, being liable for submitting false claims to the government and possibly imprisonment and/or criminal fines.
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