Clinic test settlement raises red flags for physicians
Clinic test settlement raises red flags for physicians
New developments in the case against Fresenius Medical Care Holdings, Inc., of Lexington, MA, underscore the need for physicians to be wary of claims made by supposedly reputable salespeople of medical equipment and clinical diagnostic tests.
On May 18, Fresenius paid $16.5 million to settle charges alleging that companies it acquired violated the False Claims Act and the anti-kickback statute by illegally paying physicians to order unnecessary tests for their patients. The companies in question were Biotrax International, based in Fair Lawn, NJ, and National Medical Care, Inc. (NMC), of Lexington, MA.
Interestingly, some of the physicians involved in the alleged kickback scheme may not have known they were breaking the law. According to a source close to the case, Biotrax and NMC presented themselves to physicians as "standard bearers" in the diagnostic test industry, and offered physicians assurances that the proposed arrangements were lawful. No physicians were named in the settlement, but those implicated in the scheme could face significant monetary penalties of their own, whether or not they believed what Biotrax and NMC’s salespeople were telling them.
"Doctors should see red flags whenever salespeople emphasize how much money they can make by purchasing [a company’s] services," says David H. Resnicoff, JD, the assistant U.S. Attorney for the Eastern District of Pennsylvania, who handled the Fresenius case. "Medicare reimburses for services ordered, strictly on the basis of medical necessity, and never for services that are ordered to enrich physicians."
In the settlement agreement, the government alleges that Biotrax and NMC’s conduct resulted in thousands of medically unnecessary diagnostic tests, primarily in the following areas:
1. Echocardiograms. According to prosecutors, Biotrax and NMC salesmen marketed these tests to primary care physicians who weren’t qualified to interpret the test results. The salesmen suggested that once the physicians ordered the tests, they could pay designated cardiologists $50 a pop to interpret them. The original physicians then could bill Medicare $100 as though they had performed the test themselves.
"The lesson for physicians here is that, except in a very limited set of circumstances, they may not bill for services that they do not provide themselves," Resnicoff says.
2. Nerve conduction studies and ultrasound arterial studies. With these tests, Biotrax and NMC allegedly provided physicians with boilerplate, "connect-the-dots" type reports, which physicians could use to bill Medicare, as though they had drafted the report themselves. "If a physician is billing for an interpretation, it should be an interpretation of real and raw data," Resnicoff says. "It should not be a pre-interpreted report to which the physician adds no value."
3. Cardiac Autonomic Neuropathy (CAN) studies. According to the U.S. Attorney’s office, Biotrax and NMC salesmen marketed CAN studies by telling physicians they were reimburseable under Medicare regulations. In fact, prosecutors say, CAN studies aren’t reimburseable at all, and salespeople provided the doctors with false codes under which to bill the tests. "Physicians need to remember that no salesman is acting solely in the doctor’s interest," Resnicoff says. "Physicians are responsible for making sure that their services are reimbursable before they submit the claims."
4. Electrocardiograms (EKGs). When Biotrax and NMC billed Medicare for performing an echocardiogram, they "unbundled" the EKG and billed for it as well, the U.S. Attorney’s office alleges. Medicare regulations prohibit billing EKGs separately when performed with echocardiograms.
The settlement resolved three separate qui tam cases. Franklin W. West and Robert Kane, cardiovascular experts who blew the whistle after hearing a sales pitch from Biotrax salespeople, will split $3,248,693.49 under the settlement. Elizabeth Strelow, who sued NMC, will receive $25,520.85, while Christopher Piacentile, who sued NMC Diagnostic Services, Inc., will get $20,655.
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