Avoiding Fraud and Abuse

Here are six common misconceptions about fraud and abuse. If you are alert to these misconceptions and the danger of complacency that can result from them, you should be better prepared to create and enforce company policies that will minimize your company's fraud and abuse exposure.

1. Only greedy con men get in trouble. Not true. HME companies with honorable goals also are at risk. Most of the laws tied to false claims focus on reimbursement errors that become fraudulent because they are allowed to continue without any attention to monitoring the problem or fixing it. Similarly, most of the anti-kickback laws focus on instances of value gain in exchange for referrals or recommendations.

   While the purpose of such actions may be for improved clinical care, that doesn't prevent regulatory scrutiny. Even if the "value" received is simply an opportunity to perform a legitimate service for a legitimate fee, it still may be viewed as a kickback.

2. Everybody does it this way so I won't get into trouble. Again, not true. It is irrelevant whether an activity is common practice. If it violates the rules, it is fraudulent. Plus, activities that appear to be "done by everyone else" often vary significantly in their details. Often, these details make the difference between a plan that passes scrutiny and one that doesn't.

3. Joint ventures are dangerous but everything else is safe. Not true. Among other risky agreements are those concerning managed care, rentals and space, management and professional service arrangements, discount arrangements or almost any other relationship where a financial arrangement involves the provision of services. Even though HME companies don't intend that such services be tied together, such a relationship raises the possibility of scrutiny under the law.

4. Only the mastermind behind an arrangement is at risk; HME companies aren't at risk if they simply "sign on" to someone else's plan. No. The anti-kickback laws make equally culpable all who offer or receive anything of value in exchange for a referral or recommendation. (Arguably, home care companies are even obligated to report those who make such an offer. Fortunately, I rarely see any evidence of enforcement of that obligation.)

   If you are financially involved in an arrangement with others who allegedly submit false claims, you may be in for a rough ride even if you were not involved with the billing procedures. As mentioned, all parties to a venture may come within the scope of any scrutiny attached to that venture. Also, if an HME company's payment as a subcontractor involves a receipt of improper funds, it may be subject to eventual repayment, with or without fines and penalties.

5. If those offering the relationship went to all of the trouble to put it together, they must have looked into all of these issues, and an HME company doesn't need to check out the details. No. This is a difficult and shifting area of the law. Many companies are insensitive to or ignorant of the issues. In addition, some companies are willing to take more risks than others. The mastermind behind the plan may be willing to take on far more risk than would a supplier fully informed about it.

6. If an HME company's staff submit a false claim or otherwise violate the law without the owners' personal knowledge, the owners are safe. Not true. In most contexts, the people responsible for the business are also responsible for staff supervision and must be informed about staff members' activities. They are responsible for all that goes out under their signature or stamp.

With the continued close watch over fraud and abuse in the home care marketplace, in addition to the incentives for whistleblowing by former employees, colleagues and patients, HME companies are advised to make sure their businesses run clean. The common misconceptions of the past have never been true. Watching your business practices and those of your partners will ensure that investigators never visit your business.

Neil Caesar is president of the Health Law Center (Neil B. Caesar Law Associates, PA), a national health law practice in Greenville, S.C. He also is a principal with Caesar Cohen Ltd., which offers compliance training, outsourcing and consulting and the author of the Home Care Compliance Answer Book. You can reach him at 864/676-9075 or ncaesar@healthlawcenter.com.

Materials in this article have been prepared by the Health Law Center for general informational purposes only. This information does not constitute legal advice. You should not act, or refrain from acting, based upon any information in this presentation. Neither our presentation of such information nor your receipt of it creates nor will create an attorney-client relationship.