Alleged MU Health Care billing fraud part of national problem

Wednesday, June 13, 2012 | 4:43 p.m. CDT; updated 9:13 p.m. CDT, Wednesday, June 13, 2012

COLUMBIA — Fraudulent Medicare billing uncovered at MU Health Care's Radiology Department fits into a larger national problem.

Two doctors have already resigned over preliminary results of the federal investigation, and the U.S. attorney's office in Kansas City is continuing the probe. In addition to possible criminal charges, MU could face monetary penalties from the federal government.

Michael Williams of the National Health Care Anti-Fraud Association said his organization estimates that health care fraud costs the federal government "tens of  billions of dollars each year."

U.S. Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius teamed up to combat Medicare fraud starting in 2009. Since their efforts began, the federal government has collected more than $6.6 billion from cases involving fraud, according to a February news release from the Health and Human Services Department

“Fighting fraud is one of our top priorities and we have recovered an unprecedented number of taxpayer dollars,” Sebelius said in the news release. 

Accusations against MU Health Care involved billing for reviews of X-rays that allegedly weren't provided. In addition to billing for services that weren't provided, the National Health Care Anti-Fraud Association categorizes the most common types of health care fraud as:

  • Billing for a higher level of treatment than was provided.
  • Performing unnecessary procedures to collect insurance payments.
  • Misrepresenting treatments as medically necessary when they actually are not.
  • Falsifying a patient's diagnosis.
  • Billing a patient more than the co-pay amount.
  • Accepting kickbacks for patient referrals.

On June 1, MU Health Care announced the departure of Kenneth Rall and Michael Richards after they were implicated in a federal investigation by the U.S. attorney's office in Kansas City. Rall and Richards are accused of billing Medicare for reviewing patient X-ray images they allegedly did not review, in violation of the program's billing rules. The U.S. attorney's office is involved because Medicare is run by the federal government. 

The investigation is ongoing, and MU Health Care Public Relations Manager Mary Jenkins said MU still does not know how many patients were involved or how much money was wrongly billed. 

The investigation also triggered the resignation of Robert Churchill, dean of the MU School of Medicine. He was not implicated in the investigation.

Another case of health care fraud in Missouri, which came to light in February, involved Mercy Hospital in suburban St. Louis. The hospital was accused of unnecessarily keeping patients overnight after kyphoplasty, a procedure used to treat spinal fractures usually involving osteoporosis.

The St. Louis Post Dispatch reported that Mercy Hospital paid the federal government $365,000 — part of a larger $12 million collected from different hospitals across the country. 

Williams said the federal government has created nine task forces across the country to prevent fraud from happening in the first place. 

One of those task forces led to a crackdown on May 2, when 107 doctors and nurses in Los Angeles, Detroit, Miami, Houston, Tampa, Fla., and Baton Rouge, La., were charged by federal authorities for their roles in unrelated fraud schemes. The bust was estimated to involve $452 million in Medicare fraud, a record amount.

Other university-owned hospitals have also been cited for Medicare fraud. In January, The Baltimore Sun reported a rehabilitation center owned by the University of Maryland Medical System was being sued by the government for $8.1 million for allegedly misdiagnosing patients with malnutrition.

In May, the Justice Department announced that Temple University in Philadelphia settled for about $400,000 over plastic surgery fraud.

Williams said specific statistics for university-owned hospitals are not computed by his association. Instead, they are lumped in with other hospitals.   

Health care fraud became a federal offense in 1996 when Congress passed the Health Insurance Portability and Accountability Act. Under the law, health care fraud comes with a prison sentence of up to 10 years. 

Williams said any consequences MU Health Care might face depend on the specific facts and whether the U.S. attorney's office decides to act. 

In the Temple University fraud case, Joseph Kubacki was convicted of 73 counts of health care fraud and was sentenced to seven years in federal prison. 

The U.S. Department of Health and Human Services announced that in 2011, 175 people involved in health care fraud were sentenced to prison for an average term of more than 47 months.

Medicare billing issues in MU Health Care's Radiology Department are not new. A 2010 internal audit from MU Health Care's Office of Corporate Compliance revealed 62.5 percent of cases reviewed had improper documentation for the services provided. By 2011, the audit was updated and said the problems were corrected, and a new case study revealed no problems.

But by June 1, MU Health Care had received preliminary findings of a federal investigation alleging billing fraud.

"We were shocked to learn about this because any kind of fraud is entirely inconsistent with our health system's values, our mission and our commitment to patient care," said Harold Williamson, MU Health Care vice chancellor.

When the resignations were announced June 1, Williamson said MU had no evidence that patient care was compromised and was giving patients the opportunity to have an outside physician review images if they choose.

The U.S. attorney's office in Kansas City declined comment on the investigation, citing Justice Department policy.

Supervising editor is John Schneller.

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