Question of the Week — Should providers who defraud Medicare be excluded from it?
Sometimes, though rarely, when a medical provider settles a False Claims Act case or is found to have violated the FCA at trial, they are excluded from participating in healthcare programs as a condition of resolving the case. Often, this is a limited-time ban that is meant to incentivize providers to follow Medicare’s rules in the future and to deter other providers from committing fraud.
Between Medicare, Medicaid, TRICARE, and other programs, the federal government is the nation’s biggest insurer. Not being able to do business with it can put even the largest healthcare providers in dire financial straits.
In a recent example, Frances Parise, the operator of a physical therapy clinic near Chicago, was banned from participation as a provider from Medicare, Medicaid, and all other federally funded healthcare programs for five years. This ban was part of a nearly $10 million settlement along with five nursing homes and Parise, who personally paid $160 thousand. The government alleged that Parise conspired with the facilities to artificially boost patient “Resource utilization groups” (“RUG scores”), the main determinant of the amount Medicare pays for patients in long-term-care facilities., an example of upcoding.
Billing Medicare as an excluded provider can cause a separate action under the FCA. All billings resulting from an excluded provider’s treatment of a patient, or ownership of a healthcare facility, might be automatically considered fraudulent, regardless of what services were rendered or how well they were performed.
Such exclusions are often mandatory in cases where a provider is convicted of a felony for healthcare fraud but are much more discretionary in civil cases. Proponents of such exclusions argue that they are an effective way to prevent and deter fraud. Others worry that, given the size of the Medicare program, these exclusions might be too Draconian, and force certain providers out of business. That could prove especially problematic for rural providers, whose going out of business can substantially affect a region’s access to healthcare.