DOJ Alleges Copay Waivers Led to Medically Unnecessary Procedures

Reprinted from REPORT ON MEDICARE COMPLIANCE, the nation's leading source of news and strategic information on Medicare compliance, Stark and other big-dollar issues of concern to health care compliance officers.

By Nina Youngstrom, Managing Editor

January 12, 2015Volume 24Issue 1

In a false claims complaint based partly on copay waivers, the Department of Justice alleges they led to medically unnecessary tests and procedures at a Florida cardiology practice. According to the complaint, which was announced on Jan. 5, interventional cardiologist Asad Qamar, M.D., routinely waived Medicare copayments, which allegedly encouraged some patients to submit to vascular interventions and other services they didn’t need.

Qamar and his medical group, the Institute for Cardiovascular Excellence (ICE), are accused of defrauding Medicare of millions of dollars from 2008 to 2011. Some of the reimbursement allegedly was received while Qamar was on prepayment review by the Medicare administrative contractor (MAC) for six CPT codes for cardiac catheterization procedures, which means his claims were reviewed before being paid. In 2012, Medicare paid Qamar $18 million, more than any other cardiologist. “His billings for 2012 put him second on the list of all doctors, nationwide,” the complaint contends.

The false claims lawsuit was initially filed by Holly Taylor, former director of client services at Partners in Practice (PIP), which provided practice management services for Qamar and ICE. The Department of Justice has now revealed it will take over the case.

In a YouTube video, Qamar says the allegations are “baseless” and “fiction.” He notes that ICE serves 24,000 patients in northern central Florida, and there have been zero deaths in connection with the 20,000 invasive procedures it has performed. The $18 million billed to Medicare has been taken out of context, a spokesman says, because it represents services provided in six ICE locations by 10 physicians.

The complaint alleges that Qamar told patients they did not have to pay the 20% Medicare copays, and that insurance payments would cover their bills even if they weren’t in financial distress. Unaware of his assurances, PIP billed patients for copays, who called to complain that Qamar had told them they were off the hook.

There are two problems with copay waivers, the complaint said. First, they inflate the amount Medicare pays for services. As the HHS Office of Inspector General said in a 1994 fraud alert, “if a supplier claims that its charge for a piece of equipment is $100, but routinely waives the copayment, the actual charge is $80. Medicare should be paying 80 percent of $80 (or $64), rather than 80 percent of $100 (or $80). As a result of the supplier’s misrepresentation, the Medicare program is paying $16 more than it should for this item.” Second, patients are less likely to think twice about the value of a service. “Copayments are intended to eliminate the moral hazard created when a third party (here, American taxpayers) pays for treatment,” the complaint alleges.

Complaint Alleges Documentation Games

Copay waivers were one reason for the medically unnecessary services, the complaint alleges. Patients allegedly did not question the high cost of the procedures because they didn’t have to pay their share.

For example, Qamar and ICE billed for “an unrealistically high percentage of expensive interventional procedures; in particular, peripheral vascular interventions and diagnostic imaging of the renal arteries,” the complaint alleges. In the general population, about 5% of people over age 50 have peripheral vascular disease and the same is true for 20% over age 70, yet only a small number of them need intervention. However, almost all patients under Qamar’s care who received peripheral vascular ultrasound diagnostic scans underwent the interventions, the complaint alleged.

Also, patients scheduled for a catheterization often had additional, unplanned diagnostic imaging, the complaint alleged. “Dr. Qamar would sometimes explain he had done so because he was ‘already in there,’” the complaint alleged. “For example, patients would be scheduled for a diagnostic heart cath and end up having diagnostic imaging done on multiple vascular beds.”

Documentation wasn’t up to par, the complaint alleged, which perpetuated medical necessity problems. Qamar didn’t chart his procedures or approve the scribes’ documentation of his procedures.

Allegations of copay waivers are unusual and hard to rebut because they are illegal on their face, unless providers obtain documentation of the patient’s financial struggles, says attorney Ed Gaines, chief compliance officer of Zotec Partners in Greensboro, N.C., who is not involved in this case. “It puts a new twist on a classic issue,” he says. “It will be interesting.”

OIG warned against copay waivers on the same day the false claims case was announced — perhaps not coincidentally — in the first advisory opinion issued this year (14-11). There is always the potential for civil monetary penalties and exclusion if beneficiaries are given remuneration that could influence their selection of a provider or supplier, although in this case OIG said it would not sanction a charity for helping financially needy patients who have Crohn’s disease or ulcerative colitis with copayment obligations.

Compliance monitoring often focuses on providers whose billing falls off a bell curve. Billing far outside the norm, as alleged in the complaint, is a good way to get on the government’s bad side, although it doesn’t necessarily equate to noncompliance, Gaines says. Compliance officers in practices and hospitals that employ physicians should identify physicians who are coding outliers as a first step. “You can go to the MAC and get comparative billing reports,” he says. Ask for CBRs by tax identification numbers, and compare the physicians’ billing and coding to see if anything jumps out. But there could be a good reason for an outlier. Maybe a physician who bills a lot of level five evaluation and management (E/M) services works in a trauma center. Or a sudden shift from mostly level threes to level fives reflects a change in work schedule from a rural to an urban emergency room, Gaines says.

Read the press release at www.justice.gov and the OIG advisory opinion at http://tinyurl.com/q7va2dd. Watch the YouTube video at http://youtu.be/NSWC6TsuPg8.

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