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Podiatrists are Being Investigated for Billing Fraud in Connection with Grafts and Other Wound Treatment Procedures

Male doctors looking at x-ray of foot

As a podiatrist, you know that promptly treating a patient’s wounds can be critical to mitigating the risk of infection and other potentially-debilitating complications. However, you likely also know that obtaining authorization for these treatments and the skin substitutes used during these treatments can be extremely challenging. Obtaining authorization can take days or weeks, if not months; and, in many cases, the authorizations that eventually come fall far short of covering patients’ needs.

While Medicare generally should cover all aspects of grafts and other wound treatment procedures, this is not always the case. The same is true for Veterans Affairs (VA), Tricare, and other government healthcare benefit programs. Unfortunately, due to the complexities and challenges involved with billing for varying procedures and brands of skin substitutes – even setting aside the enormous burdens of general program billing compliance – podiatrists are increasingly finding themselves at the center of federal healthcare fraud investigations.

Common Issues in Federal Healthcare Fraud Investigations Targeting Podiatrists

Although there are numerous issues that can potentially trigger, healthcare fraud investigations, with regard to investigations targeting podiatrists, recent cases suggest that federal authorities are targeting a few specific types of practices. These include:

1. Billing for Lab Work and Skin Substitutes Deemed Not Medically-Necessary (and Other Billing-Related Issues Involving Lab Work and Skin Substitutes)

Prior to performing grafts and other wound treatment procedures, podiatrists must quickly but carefully determine what type of procedure is necessary. In order to do so, they must frequently obtain x-rays and other scans and test results so that they can confidently make an accurate diagnosis. Various forms of lab work will be necessary as well, and podiatrists must determine which type of skin substitute is most appropriate given the extent and current condition of the patient’s injury.

Despite the need to quickly make informed decisions, podiatrists will often find their medical judgment being second-guessed in healthcare fraud investigations. This typically takes the form of federal agents and prosecutors accusing them of ordering tests or using certain types of skin substitute (usually the more-expensive alternatives) that are not “medically necessary” under the applicable program billing guidelines. For example, types of lab work and skin substitutes that will often be subjected to close scrutiny in federal healthcare fraud investigations targeting podiatrists include:

In some cases, federal authorities may also accuse podiatrists of unnecessarily using a skin substitute in lieu of a product such as Fibracol Plus, which is inferior but less expensive. This is common in cases involving treatment of injuries such as:

2. Use of Improper CPT Codes for Billing Purposes

Even when a test, treatment, or skin substitute qualifies as medically-necessary under the relevant program guidelines, podiatrists can still face investigations triggered by use of incorrect CPT billing codes. The list of potentially-relevant codes is extensive, and many billing codes are very similar to one another. For example, your practice’s billing administrator is probably familiar with the following:

But, while these numbers may be familiar, does your billing administrator (either an in-house employee or a third-party billing company) have the medical knowledge to determine when one code should be applied as opposed to another? Under the False Claims Act and other federal statutes, even unintentional and unknowing billing violations can trigger civil penalties, and podiatrists (and other doctors) cannot avoid liability by delegating their billing compliance efforts. In federal healthcare fraud investigations, agents from the U.S. Department of Justice (DOJ), Federal Bureau of Investigation (FBI), Office of Inspector General (OIG), and other agencies will routinely scrutinize providers’ reimbursement requests for billing and coding violations.

Put our highly experienced team on your side

Dr. Nick Oberheiden



Lynette S. Byrd

Former DOJ Trial Attorney


Brian J. Kuester

Former U.S. Attorney

Amanda Marshall

Former U.S. Attorney

Local Counsel

Joe Brown

Former U.S. Attorney

Local Counsel

John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara

Federal Appeals Attorney

Aaron L. Wiley

Former DOJ attorney

Local Counsel

Roger Bach

Former Special Agent (DOJ)

Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen

Former Supervisory Special Agent (FBI)

3. Kickbacks and Referral Fees Paid to Skin Substitute Companies and Other Third Parties

Another common issue in healthcare fraud investigations targeting podiatrists is the alleged payment and receipt of illegal kickbacks, referral fees, and other forms of remuneration. While this issue can arise within the context of various business relationships, it most commonly comes up with regard to podiatrists’ dealings with skin substitute companies. Unfortunately, these companies will often use unethical means to attempt to convince podiatrists to use their products as opposed to those sold by their competitors, and falling victim to these attempts can lead to civil or criminal Anti-Kickback Statute liability.

Under the Anti-Kickback Statute, it is a federal offense to offer, pay, solicit, or receive any improper payment in connection with medical services or supplies (including skin substitutes) provided to a federal healthcare benefit program beneficiary. Accepting payments, discounts, and even free products from skin substitute companies can potentially expose podiatrists to Anti-Kickback Statute liability. While there are a number of “safe harbor” provisions that can apply, most of these safe harbors are so narrow that a business relationship must be specifically structured with a particular safe harbor in mind in order for the doctor to be protected from federal prosecution. As a result, federal authorities routinely pursue charges under the Anti-Kickback Statute when investigating podiatrists and other doctors as well.

Avoiding Liability in a Federal Healthcare Fraud Investigation

With these concerns in mind, in order to mitigate their risk of being charged as the result of a federal healthcare fraud investigation, podiatrists must undertake program-specific compliance efforts, and they must be prepared to affirmatively demonstrate their compliance in the event of an investigation. While these efforts should be specifically tailored to each individual podiatrist’s practice, some general guiding principles include:

Contact the Federal Healthcare Fraud Defense Lawyers at Oberheiden, P.C.

Are you concerned about your podiatry practice’s billing compliance? Have you been contacted by agents from the DOJ, FBI, OIG, or another federal agency? If so, we encourage you to contact us immediately for a free and confidential case assessment. We represent clients in need of qui tam defense, involved in False Claim Act investigation, facing federal criminal charges, and in other legal matters. To speak with a member of our federal healthcare fraud defense team in confidence, call 888-680-1745 or request an appointment online now.

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