Like visiting in-laws, the feds never seem to leave.
That's a possible interpretation of the government's ongoing crackdown on alleged Medicare billing fraud.
Two recent cases, one in Pennsylvania and the other in Illinois, suggest that when the government zeros in on a hospital because of an allegation, it's going to poke around in the hospital's other activities for a long time.
"When you're the subject of a federal investigation, you stay in high focus for a long time after, even if you survived the first one and particularly if it embarrassed the government," said Neil Caesar, president of the Greenville, S.C.-based Health Law Center.
Caesar, who specializes in fraud cases, said the government rarely leaves after starting in on a provider's records.
In a recent case in Pennsylvania, fraud may have been suspected, but it didn't turn out to be the issue, even though the hospital wound up paying a large fine, conceded the assistant U.S. attorney charged with prosecuting the case.
Crozer-Chester Medical Center in Upland, Pa., paid HHS' inspector general's office $415,044 in November to settle charges that it billed Medicare for lung volume reduction surgery, a procedure not covered as a Medicare benefit in 1996-1997.
"It left a very bitter taste in our mouth," said John McMeekin, president and chief executive officer of Crozer-Keystone Health System, a five-hospital system headquartered in Springfield, Pa. "We honestly believe what we did was correct."
In a settlement agreement MODERN HEALTHCARE obtained from a Freedom of Information Act request, the hospitals admitted no guilt.
It wasn't Crozer-Keystone's first involvement with federal prosecutors.
In 1997, one of the system's other facilities, Springfield Hospital, became the first in the country to settle a dispute that was part of the government's nationwide investigation of how hospitals bill Medicare for pneumonia cases.
The government accused the 70-bed hospital of billing Medicare for more- complex-and more-highly reimbursed-cases of pneumonia when patients had less-severe cases. The government's probe, along with a subsequent internal investigation by the hospital, uncovered 109 such cases submitted to Medicare for payment from October 1992 to March 1997.
"I think it's likely there's a relationship between the two cases (pneumonia and lung)," Caesar said.
Alice Gosfield, a Philadelphia lawyer specializing in fraud issues, said federal investigators may have uncovered the billings while looking into the pneumonia case.
"If you have a compliance plan in place, you don't have these problems," Gosfield said. "The problem is when no one is paying attention to them. They (federal investigators) rarely go after people for absolutely nothing. But everyone makes mistakes."
Crozer-Keystone paid a $664,500 fine to settle the pneumonia case without admitting any wrongdoing.
McMeekin said he didn't think the lung volume reduction surgery settlement, believed to be the first and only case involving that procedure, was related to the pneumonia settlement.
Because of high mortality rates, HCFA in January 1996 stopped paying for an advanced form of lung reduction surgery that uses lasers to shrink damaged lung areas.
"HCFA decided it was an experimental treatment and stopped paying for it," said Stephen Britt, assistant U.S. attorney for the Eastern District of Pennsylvania, Philadelphia.
In 1997, under pressure from surgeons and advocacy groups, HCFA and the National Institutes of Health initiated a seven-year clinical trial of the lung reduction treatment involving 3,000 patients at approved centers around the country. The centers could legally bill HCFA for the surgeries. While Crozer-Chester was not one of those centers, it nonetheless continued to perform the procedures that year and billed Medicare for them, Britt said.
McMeekin said the hospital performed only six of the operations during that period.
"This is an operation of the last resort to prolong and improve the quality of life. And if that's the only thing that will save a patient's life or improve it, why wouldn't you do it?," he asked. "Our understanding was we would do them and not charge anybody. There was nothing illegal about that. We think we did the right thing. Unfortunately, those we did were mistakenly billed."
McMeekin said the hospital billed Medicare for about $207,000 for the procedures, resulting in a civil monetary penalty of about double that amount. The hospital could have been liable for far more under the False Claims Act.
Britt said the government initially thought Crozer-Chester might be filing false claims but reconsidered, acknowledging that it was a billing error.
Another recent series of actions against a hospital system in Chicago support the view of Caesar and Gosfield that once a provider is investigated, it becomes fair game for further prosecutorial activity.
In 1996, University of Chicago Hospitals paid a $1 million fine to the state of Illinois for allegedly overbilling the state's Medicaid program. In 1998, it paid a $250,000 fine for allegedly misusing federal grant money. Also in 1998, one of the system's hospitals paid a $3.4 million fine in a Medicare pneumonia billing case.
This year, the U.S. Justice Department joined a "whistleblower" lawsuit against the system, which alleges it falsified Medicare and Medicaid billing codes for outpatient care (March 22, p. 12).