The recent uptick in False Claims Act investigations explained

Under the Health Resources & Services Administration (“HRSA”) Uninsured Program (the “Program”), healthcare providers who conducted COVID-19 testing or provided treatment for uninsured individuals with a COVID-19 primary diagnosis on or after February 4, 2020, or provided COVID-19 vaccine administration on or after December 14, 2020, were entitled to reimbursement through the Program based on the Medicare fee schedule. Since its conception, the Program has reimbursed participating providers approximately $18 billion in claims. As the dust has begun to settle, it appears, based on audits/investigations we have come across, the federal government is now poised to take enforcement action against providers related to the Program, as necessary.

By way of background, in order to qualify for reimbursement under the Program, participating providers were required to meet the following criteria:

• They must have been enrolled in Medicare. To that end, providers must certify that they are not terminated from participation in Medicare, precluded from receiving payment through Medicare Advantage or Part D, excluded from participation in Medicare, Medicaid, and other Federal health care programs, and do not have Medicare billing privileges revoked.
• Participating providers must also have verified that the patient was uninsured at the time the services were rendered, meaning the patient did not have coverage through an individual or employer-sponsored plan, a federal healthcare program, or the Federal Employees Health Benefits Program.
• Providers must also have had to agree to accept Program reimbursement as payment in full, and not “balance bill” the patient.
• Providers had to ensure that all items and services for which claims were submitted were medically necessary as a preventative vaccination, for the care or treatment of COVID-19 and/or its complications, or for COVID-19 testing and/or testing-related items and services, and that COVID-19 was the primary reason for the treatment provided. Except in the case of pregnancy where the COVID-19 code may be secondary, any items or services for treatment without a COVID-19 primary diagnosis were explicitly not covered under the Program.

As is often the case, the best way for providers who participated in the Program to mitigate the risk of government scrutiny is through self-auditing and self-disclosing where prudent. Audits should seek to determine whether a provider has complied with the Program’s Terms and Conditions and whether he or she has received an overpayment under the Program and evaluate appropriate remedial measures to address audit findings. Among other things, remedial measures may include refunding the overpayment directly to the Program, pursuant to applicable Program rules, or the Office of the Inspector General – Department of Health and Human Services (“OIG”) through the OIG Self-Disclosure Program. A typical audit includes the selection of a statistically significant sample of affected claims, reviewing the underlying billing and clinical records associated with such claims and evaluating them based on the Program’s Terms and Conditions and other requirements (e.g., medical necessity and coding guidance) to identify errors/discrepancies.Then, if the auditing team reports positive findings, the percentage of the affected claims is identified and extrapolated over the claims universe to calculate the potential overpayment. From there, the provider, may take the aforementioned remedial measures.

Providers should note that acceptance into the OIG Self-Disclosure Program does not avail the provider of a release of claims under the FCA, but if a Provider is able to secure a release from the Civil Monetary Penalties Law through self-disclosing, the U.S. Department of Justice has shown that it does not routinely threaten or file an FCA action against the self-disclosing provider arising from the self-disclosed conduct.Despite this, voluntarily refunding/self-disclosing the overpayment remains a provider’s best way to mitigate the risk of governmental investigations/actions.

In light of Attorney General Merrick Garland’s stated commitment “to hold accountable those who seek to exploit the pandemic for personal gain,” it behooves providers to proactively self-audit to verify their compliance with the applicable requirements and manage/control the provider’s legal exposure.

Mohamed H. Nabulsi, Esq., is a Partner and Chair of the Healthcare Practice at Mandelbaum Barrett PC, a law firm based in Roseland, NJ.Contact him at mnabulsi@mblawfirm.com. Ahmed H. Gadalla, Esq., is an associate in the Healthcare Practice at Mandelbaum Barrett PC.