Fraud investigators begin to tug on the thread of medical necessity

Fraud trends tend to sneak up on us, one way or another. Sometimes, like Medicare Part D fraud, it's a slow and simmering, until it reaches the boiling point of "national epidemic." Other times there's a sudden explosion of billion-dollar overpayments that emerge with hardly a warning. (Hello, Medicare Advantage!)

But there are other fraud trends that sort of linger in the background, content to stand against the wall, careful not to draw too much attention or raise any alarms.

Fraud enforcement targeting medical necessity falls into that third group.

In a webinar last week, healthcare attorneys Jeffrey Fitzgerald and Brian D. Bewley, who work for the firm Posinelli, pointed to what they saw as a disturbing trend in False Claims Act (FCA) enforcement by the government. Federal prosecutors, they argued, are becoming increasingly brazen in their approach to cases involving medical necessity.

Bewley, a former prosecutor for the Department of Health and Human Services' Office of Inspector General, was particularly surprised by this, mostly because these types of cases were the most difficult to prove during his time at the agency. However, in recent cases, the government seemed more than willing to sling a stethoscope around its neck and second-guess the medical decisions of trained professionals.

Of course Fitzgerald and Bewley said this with the kind of outrage that you might expect from two attorneys who are paid to defend physicians and hospitals that find themselves facing this kind of government scrutiny. But they also make a valid point. Take a quick glance back at some of the medical necessity cases over the last couple years and you'll seen an increasing willingness on the part of the feds to challenge the decision-making of physicians. 

Some of these cases are relatively straightforward, if not unnerving. Last year, for example, Baptist Health System in Jacksonville paid $2.5 million to settle allegations that two of its neurologists misdiagnosed patients with neurological disorders, including multiple sclerosis, which led Medicare to pay for unnecessary treatments and prescriptions drugs. Or, take the infamous oncologist Farid Fata, who was just sentenced to 45 years in prison for grossly over-treating cancer patients with chemotherapy. It doesn't get much more unnecessary than that.

Other cases are a bit more convoluted. For example, in June, Westchester Medical Center paid $18.8 million to settle allegations that it violated the Anti-Kickback Statute by paying cardiologists to generate patient referrals. As lohud.com later pointed out, unusually high Medicare payments tied to potentially unnecessary stent and pacemaker procedures may have tipped investigators off.

If that's true, it may answer the question of why the government is more willing to jump into medical necessity cases, particularly those involving cardiac procedures, which it has pinpointed as a potential area of waste and abuse for the last several years. A 2012 study published in JAMA Internal Medicine, for example, found that unnecessary stent procedures cost the healthcare system as much as $200 million each year.

In January, The New York Times reported that because cardiologists were being scrutinized for potentially unnecessary surgeries that relieved blockages near the heart, more surgeons had begun doing similar procedures in the arms and legs. The Times pointed to Asad Qamar, M.D. Medicare's highest paid cardiologist, who was paid $18 million by Medicare in 2012, $13 million of which came from procedures to treat arteries in the legs. Qamar has been banned from Medicare and is currently facing charges from the federal government that he billed for unnecessary procedures, which he has vehemently denied.

The list goes on, and the settlements are only getting larger. In some cases, hospitals like King's Daughters Medical Center are willing to pay more than $40 million to settle claims tied to unnecessary cardiac procedures.

In this regard, greater access to payment data serves as the loose thread on an old sweater. Now we can begin to see where anomalies exist and where Medicare funnels most of its money. Sometimes it's nothing. But sometimes it's enought to start pulling that thread, and before long, half of the sweater is bunched up on the floor.

It's not hard to see how this may move beyond the confines of cardiology and into other sectors such as post-acute care. Just this week, the Wall Street Journal revealed how nursing homes may be providing unnecessarily high levels of therapy in an effort to maximize reimbursement. HCR ManorCare, which operates skilled nursing facilities in 30 different states, has already been hit with FCA charges that it orders medically unnecessary rehab services. You can almost see the feds absentmindedly picking at another seam.

However, a number of questions remain: How fair and effective is this approach? As the feds are more willing to wade into the waters of medical necessity, how will they avoid ensnaring legitimate providers attempting to provide the best care for their patients? And in doing so, are we effectively stripping physicians of their autonomy and tossing aside their medical expertise?

These are questions we will have to think about as the feds begin tugging on more of these threads and more cases begin to wade deeper into patient records and procedural guidelines. There's no doubt that medically unnecessary care harms patients and depletes taxpayer-funded healthcare programs, but there may come a point where necessary government enforcement crosses the line into a physician witch hunt. - Evan (@HealthPayer)