On May 28, the US Attorney’s Office for the District of Maryland unsealed an indictment charging a South Carolina man with defrauding Medicare through a laboratory test scheme during the COVID-19 pandemic.
As alleged in the indictment, during the pandemic, the defendant, 41, of Charleston, South Carolina, and formerly of Annapolis, Maryland, offered COVID-19 screening tests to nursing home residents across the country. He then allegedly fraudulently billed Medicare, through his company, for expensive respiratory pathogen panel (RPP) tests for these residents. The RPP tests were medically unnecessary, never ordered by a treating physician as required, and many were never actually performed, including tests for residents who were already deceased.
Through his company, the defendant caused the submission of more than $15 million in fraudulent claims for RPP tests to Medicare. Medicare eventually paid out more than $5 million.
“Individuals who steal from Medicare waste taxpayer dollars and create incisions in the fabric that holds our healthcare system together. HHS-OIG will continue the pursuit of upholding the integrity, trust, and confidence in federal healthcare programs, which benefits the people they serve,” Dixon said. “HHS-OIG, in collaboration with our law enforcement partners, will continuously investigate alleged attempts to defraud these programs.”
The defendant is charged with five counts of healthcare fraud and one count of money laundering in the indictment related to the RPP scheme.
Compliance Perspective
Issue
All laboratory tests performed for residents must be medically necessary to be billed to Medicare, Medicaid, or private insurance. A test or procedure is considered medically necessary when its results are needed to diagnose or treat an illness, injury, condition, disease, or its symptoms. Submitting claims for tests that are not medically necessary may violate the False Claims Act and could result in fines, criminal charges, or other sanctions.
Discussion Points
- Review your policies and procedures related to laboratory testing, billing practices, and protocols for preventing and reporting potential False Claims Act violations. Update policies as needed to ensure they align with federal and state requirements.
- Ensure that staff understand that all tests must be medically necessary. If a test or service appears unnecessary, staff should seek clarification from the ordering provider before proceeding. Involve the medical director in reviewing cases where medical necessity is uncertain or where there are concerns about inappropriate test ordering. Reinforce the importance of prompt reporting and make sure staff know how to report concerns or suspected violations.
- Conduct periodic audits to verify that billed laboratory tests meet medical necessity criteria. Survey professional staff to assess their understanding of medical necessity and their ability to identify and respond to potentially unnecessary services or false claims.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*