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TeamHealth Coughs Up $60 Million to Settle False Claims Act Allegation

In what began as a whistleblower case filed by a hospitalist, TeamHealth Holdings, as success-in-interest to IPC Healthcare Inc., f/k/a IPC The Hospitalists Inc. (IPC), agreed earlier this month to pay $60 million to settle allegations that IPC violated the False Claims Act by upcoding – that is, by billing Medicare, Medicaid, the Defense Health Agency and the Federal Employees Health Benefits Program for higher and more expensive levels of medical service than were actually performed.

The case was initially filed under the False Claims Act by whistleblower Dr. Bijan Oughatiyan, a physician formerly employed by IPC as a hospitalist.

Allegations in the case included that the hospitalist company trained its employees to disregard the actual level of complexity and to bill at the highest levels, that the systems used to compensate physicians incentivized upcoding, including basing compensation on their individual billing, that “dashboard” performance tracking systems were used in a manner that essentially ignored the full extent of the upcoding situation, and that IPC exerted corporate pressure on their hospitalists with lower billing levels to “catch up” to their peers.

The $60 million settlement was the result of a coordinated effort by the U.S. Department of Justice’s Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Northern District of Illinois, and HHS-OIG.

In addition to agreeing to pay the $60 million, TeamHealth entered into a five-year Corporate Integrity Agreement with the OIG covering the company’s hospital medicine division.

As usual in settlements of this nature, TeamHealth’s settlement comes without an admission of wrongdoing by it or its predecessor-in-interest, IPC.

To illustrate the prosecutorial mindset:

“Medical providers who fraudulently seek payments to which they are not entitled will be held accountable,” said U.S. Attorney Zachary T. Fardon for the Northern District of Illinois. “False documentation of treatment is not just flawed patient care; it is illegal.”

“When health care companies boost their profits by misrepresenting the services they bill to taxpayer-funded health care programs, our office will make sure they are held accountable for their deceptive schemes and that they make changes to bill these programs appropriately,” said Special Agent in Charge Lamont Pugh of HHS-OIG.

And, I assume, Dr. Oughatiyan said something like, “Thanks approximately 11.4 million!” which, in dollars, is what his whistleblower bounty comes to.

The Essential Takeaways For You

1. Whistleblower cases invariably come from an insider. How many do you have working for you right now?

2. Just as you may have seen in the national news last week about Wells Fargo Bank having fired several of its high-level employees in connection with the ongoing fallout from the opening of fraudulent customer accounts, unmonitored “sales contests” can lead to disastrous results. 

3. Normal compensation practices in industry, such as paying physicians based on productivity, can be seen by bureaucrats (investigators as well as prosecutors, who get a twice monthly automatic payroll deposit in the exact same amount month after month) as “it’s got to be criminal!” behavior.

4. There’s no excuse for upcoding, no matter what. 

5. The best practical advice is to audit your medical group’s/business’s compliance with the broadest range of underlying regulations and laws. This isn’t an “add on” – it’s a necessary part of today’s healthcare business climate.

 
 

Wisdom. Applied. 98 - What You Don't Know About The OIG Fraud Alert On Physician Compensation Can Hurt You

The federal Anti-Kickback Statute (the “AKS”) makes it a crime to pay remuneration to induce a referral of a federal health care program patient.


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All Things Personal

Perseverance.

When I first sat down to write this post, my plan was to use my dog Larry’s incessant, yet spectacularly unsuccessful, hunt for squirrels as an analogy for the fact that we should never give up on our attempt to achieve greater goals.

But then he caught one.

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Bred as independent thinkers to herd sheep and fight off wolves, Larry (a Briard) herds me and, due to a paucity of wolves in our backyard, set his site on squirrels.

For the most part, the squirrels seemed to be laughing.

Day after day, week after week, for more than a year, Larry tried and tried, yet failed and failed. Yet every time I let him into the yard, he ran like a streak from tree to tree, and along the fence from corner to corner trying to latch onto an evil predator a furry forager.

We humans tend to give up too quickly. We say that we tried it once and failed. We’re embarrassed to keep trying because we don't like it when our goals laugh at us like squirrels in the trees.

What does a dog with a squirrel in his mouth know about success that we don’t?

 



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Mark F. Weiss

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Having fallen for the fallacy that there’s profit in market share, hospitals have gorged on acquisitions and on employment and alignment of physicians. Many physicians have been willing participants through practice sales and in the belief that there’s safety in hospital employment. But it’s becoming evident that physician employment leads to losses and that integrated care delivers neither better care nor lower costs. And now, technology is about to moot many of the reasons for a hospital’s existence. How can your practice survive and even thrive in the post-hospital world?
 
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Today’s medical groups must confront multiple challenges: The impact of Obamacare. Increasing commoditization. More competition, not just from other physicians and medical professionals, but also from hospitals, investor-owned groups, and disruptive ventures. Yet at the same time, the future of healthcare offers medical groups tremendous opportunity.
 
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Some days, it seems as if everyone, from anesthesia groups to vascular surgery practices, is talking about selling their practice to a larger group, to private equity investors, or to a hospital.


The reality is that some practices can be sold, some can never be sold, and some have nothing to sell.

The reality also is that there are a number of strategic alternatives to a practice sale.

 

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The healthcare market is changing rapidly, bringing new sets of problems.
 
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Recent Interviews and Published Articles

Mark was quoted in the article ASC Regulatory Areas That Developers Need To Pay Attention To published on Nov. 9, 2016 in The Ambulatory M&A Advisor. Read or download here

Mark's article OIG Advisory Opinion Secrets and Strategies was published in the Summer 2016 volume of Communique. Read or download here.

Finders keepers, losers weepers. Except in connection with overpayments from Medicare, then it’s a violation of the federal False Claims Act leading to significant liability—that is, unless you repay the overpaid sum within 60 days. Read CMS Resets the Clock for Return Of Medicare Overpayments published on AnesthesiologyNews.com in May 2016. Read or download here.


Mark's article A New Strategy To Profit From Interventional Radiology, co-authored with Cecilia Kronawitter, was published on AuntMinne.com on May 23, 2016. Read or download here.


Three of Mark’s blog posts were republished as a column entitled Practice Challenges in the Spring 2016 issue of the Pennsylvania Society of Anesthesiologists Newsletter, the Sentinel. Read or download here.

Mark's article Is There An Interventional Radiology ASC (irASC) In Your Future? was published in the April/May 2016 volume of Radiology Business Journal. Read or download here.

Mark's article Impending Death of Hospitals: Will Your Anesthesia Practice Survive? was published in the winter 2016 volume of Communique. Read or download here.

Mark was quoted in the article Practice Patterns Change While Outcomes Remain Steady Among Older Anesthesiologists, published in the December 2015 issue of Anesthesiology News. Read or download here.
 
Mark's article Anesthesia Group Mergers, Acquisitions and (Importantly) Alternatives was published in the summer 2015 volume of Communique. Read or download here.
 
Mark was quoted in the article Anesthesiology Acquisition Rate Still at Fevered Pace, published in the July 2015 issue of Anesthesiology News. Read or download here
 
Mark's article Seeking Certainty In Radiology: Mergers, Acquisitions and Alternatives was published in June 2015 on Imagingbiz.com. Read or download here.