Monday, December 7, 2015

Dermatology and Cosmetic Center Pays $150,000 to Settle False Claims Act Allegations of Upcoding Medicare Claims for Surgical Closure Procedures

The False Claims Act was used to resolve billing allegations of upcoding. Two related dermatology and cosmetic medical entities, Rhode Island Dermatology and Cosmetic Center, LLC, and Rhode Island Dermatology OBS, LLC recently paid $152,043.25 to resolve civil allegations that they violated the federal False Claims Act by billing Medicare for some patient services and procedures performed at rates higher than were warranted.

The investigation was conducted by the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) and the United States Attorney’s Office. The United States alleged that between 2009 and 2014, Rhode Island Dermatology, which provides dermatology, plastic surgery, and cosmetic surgery services, billed Medicare for surgical closure procedures at a higher rate of complexity than was supported by certain patients’ condition or the circumstances of the closure, and which should properly have been classified at a lower billing rate for less complex procedures.  

In general, the amount that Medicare pays for a given medical or surgical procedure is frequently dependent on the complexity of that procedure.  Upcoding, or billing for a level of complexity that is not warranted by a patient’s actual condition and treatment, results in improperly higher payments for care that should have actually been reimbursed by Medicare at a lower rate.

In this case, the matter was settled prior to litigation on or about November 8, 2015, without an admission of liability or wrongdoing on the part of the practice. The settlement amount for billings over a five year period and the lack of admissions demonstrate that this was not a criminal case and it appears the medical practice had mounted a strong defense in order to obtain this favorable settlement.

Posted by Tracy Green, Esq.


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