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Seven Things To Know When You Receive A Notice Of Investigation From The Department Of Health

Health Law Update August 2014


August 26, 2014




Michael L. Smith, R.R.T., J.D.

Thu T. Pham, O.D., J.D.

1.  Why Have You Received a Denial on Your Medicare Enrollment Application?

Did you receive a denial on your Medicare enrollment application and can’t figure out why? You may not know that even the smallest punctuation error, such as a missing comma or period, could be the reason Medicare rejected your application.

The Centers for Medicare and Medicaid Services (CMS) will deny Medicare applications of physicians, medical groups, home health agencies (HHAs), pharmacies and durable medical equipment (DME) suppliers because the name on file with the National Plan & Provider Enumeration System (NPPES) is not the same legal business name as reported to the Internal Revenue Service (IRS). The use of punctuation marks and abbreviations in your name with NPPES could produce a “no match” in the CMS records. When filling out Medicare enrollment forms you must use the exact legal business name on file with the IRS.

The easiest way for a healthcare provider or facility to apply for enrollment or make changes to enrollment information is to use the internet-based Provider Enrollment Chain and Ownership System (PECOS).

Here are some more situations that can cause a provider’s application to be denied:

1.  The form CMS-855 or PECOS certification statement is unsigned; is undated; contains a copied or stamped signature; or for the paper form CMS-855I and form CMS-855O submissions, someone other than the physician or non-physician practitioner signed the form.
2.  The submitted paper application is an outdated version.
3.  The applicant failed to submit all of the forms needed to process a reassignment package within 15 calendar days of receipt.
4.  The form CMS-855 was completed in pencil.
5.  The wrong application was submitted (for example: a form CMS-855B was submitted for Part A enrollment).
6.  If a web-generated application is submitted, it does not appear to have been downloaded from the CMS website.
7.  The healthcare provider sent in an application or PECOS certification statement via fax or e-mail when he/she was not otherwise permitted to do so.
8.  The healthcare provider failed to submit an application fee (if applicable).

If anything is incorrect, including an incorrect or incomplete name for your medical group, corporation or business, immediately fix this. Everything should be consistent. All of your state licenses and corporation/company information on file with your Secretary of State should also contain the same information.

The consequences of not checking your information on file are severe, and can include termination of your Medicare provider number and billing privileges.

2.  The DEA May Use Intimidation Tactics to Force Doctors or Pharmacists to Give up Their DEA Numbers

The U.S. Drug Enforcement Administration (DEA) continues to crack down, at least in Florida, on physicians and pharmacists suspected of prescribing and dispensing narcotics. However, just because you are not a pain management physician or pharmacist and you don’t write a lot of prescriptions for narcotics, does not mean you cannot be targeted by the DEA.

You should train your staff on what to do if the DEA “inspects,” “audits” or “investigates” you or your practice.

1.  Be prepared.  The DEA will always make a showing of force, with multiple agents, flashing badges and guns. The actual experience is calculated to surprise so that you are unprepared to rationally think about what you should do.
2.  Verify that your staff knows that no one is authorized to release records except the owner.
3.  Call your attorneys as soon as the DEA walks in. You and your staff should have the contact information for your attorney, including cell phone numbers for weekends and after hours.  
4.  Do not allow the DEA to get you alone.
5.  Get the names and business cards from all DEA personnel present.
6.  If you are not present, be sure your staff knows to call you and your attorney right away.
7.  Tell the DEA agents that you must speak with your attorney prior to speaking with the them.  Have a witness to this if you can.
8.  Do not make any decision until you speak with your attorney.
9.  If a DEA agent states that you do not have the right to speak to your attorney first, this is not true.
10.  DEA agents may say that unless you sign a voluntary relinquishment of your DEA number you will be arrested and prosecuted.  Usually, this is a bluff.  
11.  Never voluntarily relinquish your DEA registration. Once it’s gone, it’s gone.
12.  Be aware of the consequences of not having a DEA registration.  A physician will be unable to write most prescriptions, will lose hospital and nursing home clinical privileges, and will be terminated from most health insurance panels.  A pharmacist or pharmacy will be terminated from most insurance panels and may also have an investigation commenced against its license.  You may also be excluded from Medicare and Medicaid.
13.  If given the choice between voluntarily giving up your DEA registration and being arrested, you should select being arrested.  I doubt this will actually happen, but then you have a good chance at winning.  
14.  If the DEA attempts to take your original records, ask to see a search warrant. The DEA is not legally authorized to seize and take any property without one.  You could offer to make a copy and send the copy to them later, but you should object to providing your original records you are required to keep.
15.  Obtain a detailed, itemized written receipt for anything taken (even copies) by the DEA.

We have received reports from physicians and pharmacists that they were intimidated into handing over all their original records or “voluntarily” giving up their DEA registrations under the threat of arrest.  Be prepared for such scare tactics and prepare your staff too.

3.  Compassionate Use of Low-THC Cannabis

On January 1, 2015, physicians will be able to prescribe Low-THC Cannabis for patients suffering from cancer or a chronic condition that produces symptoms of seizures or severe and persistent muscle spasms.

A physician that intends to prescribe Low-THC Cannabis will need to register as the prescribing physician for the patient on the compassionate use registry maintained by the Department of Health (DOH).  The proposed application forms are available on the DOH website.

A physician that intends to prescribe Low-THC Cannabis for patients must complete an 8-hour course, and subsequent examination offered by the Florida Medical Association, or the Florida Osteopathic Medical Association.  The first course must be offered by October 1, 2014, and at least annually thereafter.

Neither the Florida Medical Association nor the Florida Osteopathic Medical Association has published any information on the required course for physicians to become qualified to prescribe Low-THC Cannabis.

4.  Tightened Controls on Prescribing for Medicare Part D Patients May Affect Healthcare Providers

On June 1, 2015, physicians and other healthcare providers will be under tighter restrictions when prescribing to Medicare Part D patients. A final rule released by CMS requires healthcare providers to enroll in the Medicare program, or have a valid opt-out affidavit on file, for prescriptions to be covered under Part D.

The need for this new rule allegedly stemmed from CMS’s lax oversight of the Medicare Part D program. This enabled some healthcare providers to be able to prescribe massive quantities of inappropriate medications, waste billions on expensive drugs, and expose the program to rampant fraud. The newly released rule will assist CMS in cracking down on providers that are reckless or abusive in prescribing drugs to Medicare patients.

Through the rule, the federal government granted itself new authority to expel physicians from Medicare if they are found to prescribe drugs in violation of Medicare rules. In addition, the agency will be able to strip away a provider’s Medicare enrollment if his or her DEA certification to handle controlled substances has been revoked, or if the state licensing board has revoked his or her authority to prescribe drugs. According to CMS, this authority will only be utilized in rare instances where abuses have been well documented.

5.  Thinking About Contacting the Professionals Resource Network (PRN) or the Intervention Project for Nurses (IPN)?  Read This.

Physicians, dentists, nurses and other health professionals, accused of wrongdoing, may be referred to or receive recommendations from colleagues to refer themselves to the Professionals Resource Network (PRN) or the Intervention Project for Nurses (IPN).  This is often done by someone who has absolutely no idea about these programs.  An individual who does this may find himself or herself in a situation that they regret.

Both programs have done some wonderful things. They have saved the lives and careers of many health professionals who have issues with drugs and alcohol, or who suffer from mental illnesses.  However, often a person may be accused of being an addict, alcoholic, substance abuser or having an uncontrolled mental illness when nothing is further from the truth.  Then these programs may not be right for that individual.

Many health professionals are advised by their colleagues that they should falsely claim they are alcoholics or addicts to get into PRN or IPN as to avoid disciplinary action against their licenses.  For those afflicted with a serious substance abuse problem or mental illness, this may be correct.  However, if it is not the case, this advice is egregiously wrong.

You should obtain information on the facts and alternatives immediately when accused and prior to making any such decision, calling anyone, or speaking with any investigator.  Contact an experienced health law attorney who can provide information on your options.

6.  Don’t Bury Your Head in the Sand: Embezzlement in the Medical Field

When running a medical office your patients are in the forefront of your mind, not embezzlement and fraud. However, this could be a gigantic mistake. The Association of Certified Fraud Examiners (ACFE) lists the healthcare industry as the fourth most prevalent industry that falls victim to fraud. Embezzlement victimizes almost 60 percent of healthcare practices. Annually, medical and dental practices lose $25 billion. You could potentially be looking at a 5 percent loss of revenue due to fraud each year.

It’s when you get a complete sense of security that you overlook indicators of fraud. The culprit of fraudulent crimes in your office will most likely be a long-time employee who is very familiar with your procedures and is trusted by you.

There are many preventative steps you can take in order to avoid occupational embezzlement. The first step is to make smart hiring decisions. References and background checks weed out potentially dangerous employees. You should also have a financial security plan of action. The objective is to discourage temptation by eliminating the opportunity to easily steal. This can be done in a number of ways:

–  Segregate your employees’ financial and bookkeeping duties. The same employee that collects payments should not be taking the deposits to the bank;
–  The employee that pays the bills should not be opening the mail;
–  Eliminate both signature stamps AND petty cash;
–  Direct all billing related mail to a lockbox or your private home address;
–  Do not allow employee access to patient credit card numbers and company credit cards;
–  Have a security code installed on your merchant terminal for refunds;
–  Have an independent certified public accountant (CPA) do random audits;
–  Comprehensively review and compare accounting materials such as billing statements, time sheets, receipts, deposits, and all other entities involved in the monetary running of your office. Look for unusual patterns or discrepancies.

Should you find yourself the potential victim of occupational embezzlement, remember that you should be guarded about discussing your suspicions. Do not immediately call the police, place bait or confront the suspected employee. Do not make any major immediate changes to financial protocols. If the suspected employee gets word that you are onto his or her criminal activity, the chance of destruction of necessary evidence is high.

When interviewing the employee you suspect, ensure that a witness is present. However, never directly accuse him or her of any crime in front of someone else. Use this as a time to ask for explanations on the discrepancies found. If the embezzlement is confirmed, immediately suspend the employee. Prosecute any employee found taking part. Set an example with this employee and make it known that you have a zero-tolerance policy for such criminal behavior.

7.  Brace Yourself: The RACs are Back

All good things must come to an end. This includes the two-month hiatus from Recovery Audit Contractors (RACs) that healthcare professionals have enjoyed. CMS has restarted audits of Medicare fee-for-service claims on a limited basis. The program was previously suspended since June 1, 2014, due to expired contracts.

According to CMS, current RACs will conduct a limited number of automated reviews and a small number of complex reviews on certain claims including, but not limited to:

    –    Spinal fusions;
    –    Outpatient therapy services;
    –    Durable medical equipment;
    –    Prosthetics;
    –    Orthotics; and
    –    Supplies and cosmetic procedures.

RACs will not conduct any inpatient hospital patient status reviews, for now.