Federal Prosecutors Have Raided Medicaid and Medicare Providers for Alleged Fraud in Connection with Oxygen Therapy Devices
Medicare and Medicaid reimburse well for hyperbaric oxygen therapy devices and several business owners and providers have promoted the idea to beneficiaries. Unfortunately, however, the dispensing of oxygen devices is a decision of medical necessity that requires the authorization and order by a physician. Federal prosecutors, the Medicaid Fraud Control Unit, the FBI, and the Office of Inspector General (OIG) are currently scrutinizing providers for (1) allegedly overprescribing medically unnecessary devices and for (2) dispensing oxygen therapy machines without valid prescription.
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Why the Government Picks Your Business for a Fraud Audit
If you wonder why your business is selected for a fraud audit for potential abuse of oxygen therapy devices, the answer is simple. Computer analysists in Washington D.C. compare the sales number of providers nationwide. If you happen to distribute more devices than some of your competitors within a certain defined geographical area, then chances are high that your office will undergo a fraud audit for being an “outlier.”
How You Know that Your Business Is a Target of an Oxygen Therapy Fraud Investigation
There are essentially two ways to find out that you are under investigation for Medicare or Medicaid fraud, the soft one and the hard one. The soft approach is when you receive a letter from CMS or an intermediary either informing you that you are an outlier when it comes to oxygen devices. The hard approach, increasingly applied, is when you come to your office and you see dozens of federal agents and police officers searching and seizing your office based on a federal search warrant. Either way, from the earliest moment of knowing or believing that you may be on the government’s radar, you should contact Oberheiden, P.C. to find out how to protect your license, your reputation, and your assets.
Example 1: Oxygen Therapy Medical Equipment Sales to Ohio Medicaid Beneficiaries
Under Ohio Medicaid Code 5160-10-23, pulse oximeters are a covered medical equipment item eligible for reimbursement when used in a personal residence as an alternative to hospitalization to manage the care of oxygen dependent recipients. Home pulse oximetry is covered when used to monitor oxygen saturation in order to determine appropriate supplemental oxygen levels.
Under Ohio Medicaid laws, prior authorization is not required for non-invasive pulse oximeters; however, pulse oximeters do require a physician order in order to determine medical necessity during post-payment review. According to Ohio Medicaid Code 5160-10-23, only a physician, a physician assistant, a nurse, or a DME provider may supply pulse oximeters.
Payment for a pulse oximeter can be made only if a prescriber certifies that the oxygen is medically necessary for an individual. A completed certificate of medical necessity (CMN) must be signed and dated by the prescriber before a claim is submitted. The default form is the ODM 01909, “Certificate of Medical Necessity: Oxygen.” On the CMN, the prescriber must specify an estimated length of need (certification period), which may range from one month to a lifetime.
Example 2: Oxygen Therapy Medical Equipment Sales to Indiana Medicaid Beneficiaries
Indiana Administrative Code 405 IAC 5-19-2 and Indiana Code IC 25-26-21 define durable medical equipment (DME) and home medical equipment (HME) as equipment that can withstand repeated use, is primarily and customarily used to serve a medical purpose, and generally is not useful to a member in the absence of illness or injury. A pulse oximeter is classified as DME under the Indiana Medicaid guidelines.
For all medical supplies and equipment (which includes pulse oximeters), the Indiana Health Coverage Programs (IHCP) requires a written order by a physician, optometrist, or dentist. Verbal orders, communicated by the doctor or other provider to the supplier, are permitted when appropriately documented; however, verbal orders must be followed up with written orders. Suppliers of DME must maintain the written physician’s order to support medical necessity during post-payment review.
Per 405 IAC 5-25-3(a) of the coverage guidelines, a physician’s written order and plan of treatment are required as follows: “All Medicaid covered services other than transportation and those services provided by chiropractors, dentists, optometrists, podiatrists, and psychologists certified for private practice require a physician’s written order or prescription.” The written order for DME should include, at a minimum, the following information:
- Patient’s name
- Date ordered
- Physician’s signature
- Area of body for use (for items that may be appropriate for multiple sites)
- Type and size of the product
- Quantity intended for use
- Frequency of use (for example, change dressing three times per day)
- Anticipated duration of need
- Indication of refill authorization and the number of refills (if applicable)
Indiana suppliers are responsible for ensuring that the written order contains the necessary information to complete the order. If the physician’s order lacks information necessary to accurately dispense the appropriate, specific DME, HME, and medical supplies, including type or quantity, the supplier must contact the physician’s office for written clarification.
All DME sales require a physician order, regardless if Prior Authorization is required. Prior Authorization is not the same thing as a physician order. Prior authorization refers to additional documentation submitted relating to a reimbursement request. Pulse Oximeters do not require this additional submission of information but do require a physician order to be sold in the place.
What Are Potential Penalties?
The goal of your attorney must be to intervene early and to convince government lawyers to allow a civil resolution of the problem rather than bringing criminal felony charges. The longer you wait to get the help of experienced counsel, the more difficult it is for anyone to turn the investigation into a civil case. If the government nonetheless insists on criminal prosecution, then the general statute applicable to health care fraud is 18 U.S.C. 1347. Pursuant to this statute, a person is guilty of health care fraud if the following conditions are met:
- The defendant made and subscribed a return, statement, or other document which was false as to a material matter;
- The return, statement, or other document contained a written declaration that it was made under penalties of perjury;
- The defendant did not believe the return, statement, or other document to be true as correct as to every material matter; and
- The defendant falsely subscribed to the return, statement, or other document willfully, with the intent to violate the law.
A defendant convicted of health care fraud under 18 U.S.C. 1347 must expect severe penalties. Pursuant to Title 18 of the United States Code, a defendant guilty of health care fraud will be ordered to not more than 10 years imprisonment per count, a term of supervised release, criminal fines; asset forfeiture, and a mandatory special assessment. The rule is that the higher the alleged damage to the government or insurance program, the higher the penalties. Speak to one of our lawyers today and get a free assessment of your exposure and have a discussion of how to mitigate or fight charges.
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Oberheiden, P.C. offers clients nationwide service. Our mission is to defend those unjustly accused of fraud and our focus is to help business owners and health care professionals maintain their license, their good name, and their ability to make a living. When you work with Oberheiden, P.C., you will be represented by a team of partner-level attorneys who are profoundly familiar with your industry and can thus help you competently and instantly. Contact us today.