On May 9, 2023, the U.S. Department of Justice announces that a hospital and hospitalist group agreed to settle allegations they violated the False Claims Act (FCA). The settlement resolved federal and state allegations.
According to the press release, between mid-2014 and mid-2020, Yale New Haven Health Services Corp. and Northeast Medical Group, Inc. submitted false claims to the federal government and Connecticut related to the commonly used (and often scrutinized) evaluation and management services. The issues involve proper claim submission and identification of the proper billing provider (i.e., supervising doctor versus mid-level provider.). The federal and state governments accused Yale and Northwest Medical of improperly submitting claims under doctors when a mid-level provider was appropriate. The government alleges that because of the improper billing, Yale and Northwest Medical were paid at a higher rate than if the billing had correctly reflected mid-levels.
Evaluation and management codes (E/M codes) and billing for mid-level services are topics that many providers and billers find confusing or for which they demonstrate overconfidence in the accuracy of their billing. In reality, it is easy to make mistakes when billing E/M codes and related modifiers. This case serves as a reminder that providers and healthcare entities should perform routine training and self-audits (with advice of counsel) to ensure billing practices are compliant with federal and state rules.
The government’s announcement also serves as a reminder of two key points. First, the government will use the FCA to pursue cases of potential fraud, despite the size of the case or how minimal and common the alleged improper act occurs. Second, the government continues to rely on whistleblowers. In this case, the settlement resolves a lawsuit brought under the qui tam or whistleblower provisions of the FCA. The qui tam provisions provide financial incentives and a procedural structure to whistleblowers – also called relators – who bring FCA cases on behalf of the government. In this case, the whistleblowers were three former Adobe managers. Providers and healthcare entities should note that the financial incentive to be a whistleblower can be significant, as whistleblowers are entitled to 15% to 30% of the money the government recovers, based on several factors. According to the press release, the relator will receive $106,536 as her share.
The qui tam case is captioned U.S. ex rel. Cadariu v. Northeast Medical Group et al. (Docket No. 19-cv-904).
The attorneys at Chilivis Grubman represent clients of all types and sizes in connection to health care fraud and False Claims Act litigation. If you need assistance with such a matter, please contact us today.