Owner Of New Jersey Mobile Diagnostic Testing Facility Sued For Submitting Claims To Medicare for Cardiologist Who Was on Pre-Payment Review

A recent federal criminal and civil qui tam case relate to a Medicare provider billing for services provided by another provider who was on pre-payment review. 

Pre-payment review is also called "paper billing" and is ostensibly designed to ensure that doctors or providers submit claims within established rules and regulations, and which required them to submit documentation, including medical records, to support the services being billed to Medicare. 

Under pre-payment review, claims for reimbursement that do not have the documentation necessary to support the services being billed are rejected by the Medicare contractor. When a provider is placed on pre-payment review, it is often the death knell for a health care business since collections grind to a halt and often legitimate claims are denied or rejected for arbitrary reasons. It used to be used to train providers but it is now often used as a way to shut down a provider's Medicare practice.

In this recent case, a cardiologist decided to find a way around the pre-payment review limitations which brought this civil case and a criminal case. On December 6, 2016, Vijay Patel of New Jersey, and his business Mobile Diagnostic Testing of NJ LLC were named in a civil federal qui tam lawsuit for allegedly knowingly submitting false claims to Medicare for thousands of diagnostic testing services they did not render.  

The civil complaint alleges that Vijay Patel had an associate who was a cardiologist and also a Medicare provider. It is alleged that from around 2009 through 2012, the cardiologist was on “pre-payment review.”  What happened is that instead of the cardiologist submitting the claims, from August 2011 through December 2012, Mr. Patel's entity and his brother's entity (Biosound Medical Services Inc. ) submitted the cardiologist's claims as if these entities had performed them instead of the cardiologist. 

Owner of Portable Diagnostic Provider Convicted of Health Care Fraud Where X-Ray, MRI and Ultrasound Interpretations Not Performed By Physicians. Finding That Two Patients' Deaths Caused By X-Rays Not Being Reviewed By Radiologist

One of the issues with diagnostic providers is that with electronic reports there are times when radiologists become concerned that the IDTF is using technicians to do draft reports and have someone sign their signatures to radiology reports without having a radiologist read the reports. Recently such a case was prosecuted and went to trial in Maryland.

On February 17, 2016, a federal jury convicted the owner of Alpha Diagnostics, Rafael Chikvashvili of multiple felonies: health care fraud and wire fraud conspiracy, healthcare fraud (including two counts of health care fraud resulting in death); wire fraud, false statements and aggravated identity theft. The total billings to Medicare and Medicaid were more than $7.5 million.  

Judge Bredar ordered that Mr. Chikvashvili be immediately taken into custody with a detention hearing to be held to determine whether he will remain in custody pending his sentencing.

According to the evidence presented at the two-and-a-half week trial, Mr.Chikvashvili formed Alpha Diagnostics Services, Inc., which later became Alpha Diagnostics, LLC, in 1993, and was the Managing Member, Authorized Official, Managing Employee, President and Chief Executive Officer for Alpha Diagnostics. Mr. Chikvashvili holds a PhD in mathematics, but was never a medical doctor or licensed physician. 

Timothy Emeigh was the Vice President in charge of Operations at Alpha Diagnostics and was a licensed radiologic technologist. Timothy Emeigh previously pleaded guilty to health care fraud and is awaiting sentencing.

Alpha Diagnostics was a portable diagnostic services provider, principally of X-rays, but also provided ultrasound tests, and cardiologic examinations.  Alpha Diagnostics’ clients included nursing homes whose patients were covered by Medicare and Medicaid. Alpha Diagnostics operated in Maryland, Delaware, Pennsylvania, Virginia and the District of Columbia, but was headquartered in Owings Mills, Maryland, where Mr. Chikvashvili worked full time.

Based on the evidence, the jury found that from 1997 through October 2013, Mr. Chikvashvili conspired with others to defraud Medicare and Medicaid by: 

- creating false radiology, ultrasound and cardiologic interpretation reports; 

U.S. Attorney’s Office Files Civil Qui Tam Lawsuit Against New Jersey Couple And Two Diagnostic Companies For Falsifying Diagnostic Test Reports And Failing To Properly Supervise Tests

Medicare and OIG have targeted diagnostic companies for the past five years. There has been an increase in whistleblower and false claims cases involving diagnostic companies as well.

On November 19, 2015, the government intervened in a False Claims Act lawsuit and filed a complaint against a New Jersey couple and their diagnostic imaging companies for knowingly submitting false claims to Medicare for thousands of falsified diagnostic test reports and the underlying tests. This followed the owners' guilty pleas to health care fraud relating to the qui tam claims in the civil lawsuit.

Nita K. Patel and Kirtish N. Patel of New Jersey were and/or are owners and operators of Biosound Medical Services Inc. and Heart Solution PC. The Patels pleaded guilty November 17, 2015, to health care fraud charges set forth in an Information related to this conduct.

The civil complaint alleges that the Patels and their companies:
(1) created fraudulent diagnostic test reports, 
(2) forged physician signatures on these reports, and 
(3) billed Medicare for the fraudulent reports and the underlying tests that were used solely to create these reports. 

Diagnostic Company’s Unlicensed Vice President Pleads Guilty To Health Care Fraud After Performing and Interpreting X-rays and Other Tests in Lieu of Qualified Physicians and Radiologists

On July 17, 2014, a licensed x-ray technician Timothy Emeigh who was a vice-president of a diagnostic company pleaded guilty to health care fraud in the District of Maryland arising from a scheme in which insurance providers and Medicare were fraudulently billed for tests interpreted by unlicensed personnel, and for tests and services which in fact had not been provided.

According to his plea agreement, Mr. Emeigh was a licensed x-ray technologist in Maryland but was not a licensed physician. Mr. Emeigh worked at Alpha Diagnostics Services beginning in 1993 as an x-ray technologist and by 1997, he was named vice president of the company’s operations.

Alpha Diagnostics was principally a portable x-ray supplier in Maryland, Delaware, Pennsylvania and Virginia. However, Alpha Diagnostics also supplied or provided portable ultrasound tests, electrocardiograms (“EKGs”), echocardiograms and Holter monitors. The majority of its clients were nursing homes, whose patients Alpha Diagnostics tested. Alpha Diagnostics was enrolled in the Medicare program. Medicare required that a licensed physician order and interpret the x-ray or other test, and render a formal report.

Nonetheless, in 1997, Mr. Emeigh began performing x-ray interpretations in lieu of a licensed physician or radiologist, and producing fraudulent reports using the names of actual physicians who had never seen the x-rays in question. In 2003, as technology improved, Mr. Emeigh began interpreting medical tests and writing reports in the name of registered licensed physicians from his home using his home computer.

In addition to x-rays, Mr. Emeigh began interpreting and drafting fraudulent reports for ultrasounds and EKGs from his home, while traveling out of state, and at times, from overseas. Sometimes Mr. Emeigh performed medical interpretations and transmitted x-ray images using a cell phone application.

By 2010, Emeigh performed more than 70% of the x-ray interpretations, masquerading as a licensed radiologist or physician. On an average month, more than 1,000 x-ray interpretations were conducted by Alpha Diagnostics in Maryland alone. Mr. Emeigh suggested to Alpha Diagnostics that he transmit particularly difficult medical interpretations to actual licensed physicians. If a patient caregiver contacted Alpha Diagnostics to question any of the medical interpretation reports generated by Mr. Emeigh or other unlicensed Alpha Diagnostics personnel, the diagnostic interpretation was reassigned to an actual licensed physician for a second interpretation, who would not be apprised of the first interpretation and conclusion.

There were other fraud allegations including one that Alpha Diagnostics would bill insurance providers for 2-view chest x-rays even where single-view x-rays had been ordered or performed. Another fraud allegation was that Alpha Diagnostics routinely submitted insurance payment claims which exaggerated the number of anatomical views performed by its x-ray and ultrasound technologists; and for multiple transportation charges on occasions when multiple patients had been examined at the same facility. Alpha Diagnostics would routinely bill Medicare for “global” x-ray procedures (i.e., both professional and technical components), along with transportation and setup charges, for studies interpreted "in-house" by Mr. Emeigh or other unlicensed Alpha Diagnostics personnel.

From January 2007 through October 2012, the financial loss to Medicare for the alleged misconduct was more than $2.5 million but this did not occur any losses to private insurance.  The statutory maximum on Mr. Emeigh’s sentence is 10 years in prison and a $250,000 fine. U.S. District Judge James K. Bredar scheduled sentencing for October 29, 2014.

Attorney Commentary: Diagnostic companies who perform tests and reports have been under scrutiny by OIG for the past eight years since diagnostic testing was targeted to the high reimbursements paid.  Audits were conducted of many diagnostic companies and once those audits were completed, some cases were referred to Office of Inspector General for criminal investigation.

There have been many cases where radiologists who had a high number of reports were suspected of having technicians write the reports but this case was extreme in that the technician used radiologists' names where the radiologist did not interpret the test. We have represented radiologists where this was done to them in part because the diagnostic company wanted to avoid paying the interpreting fee. In this case, the radiologists were not charged -- only the diagnostic company. However, the supervising physicians could have had some exposure if they knew or should have known of the misconduct. 

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law

Phone: 213-233-2260

Email: tgreen@greenassoc.com

California Attorney General Issues Opinion On Corporate Practice Of Medicine Involving Radiology Services

On September 24, 2009, California Attorney General recently issued an Opinion reinforcing California's ban on the corporate practice of medicine with respect to radiology services. 08 Ops.Atty.Gen. 803 (2009).

The issue presented was: "whether an entity or individual who is not licensed to practice medicine in California may perform professional radiology services for a Medical Provider Network."

The phrase "professional radiology services" was deemed to include "creating, reading and interpreting radiological images, [and] related professional services such as [1] the selection of suitable radiologist, [2] the selection of a radiology site with appropriate equipment and personnel, as well as [3] collecting fees for such services."

The conclusion was: "An entity or individual not licensed to practice medicine may not perform professional radiology services, either as part of a Medical Provider Network or otherwise.We conclude that they may not."

As part of its analysis, the Attorney General Opinion "reiterate[d] [its] view that professional radiology services—specifically including the selection of a suitable radiologist, and the selection of a suitable radiology facility with appropriate equipment and personnel, as well as preparing and interpreting radiological images—involve the exercise of professional judgment as part of the practice of medicine. Unless otherwise provided by law, it is unlawful to practice or attempt to practice medicine without a license.

The Opinion restated the ban on the corporate practice of medicine: "California law establishes a general rule that a license to practice medicine may be issued only to a properly qualified person, and not to a corporate entity."

"The practice of medicine by a corporate entity, except a professional medical corporation, is prohibited because 'it is incongruous in the workings of a professional regulatory licensing scheme which is based on personal qualification, responsibility, and sanction . . . [and] the interposition of a lay commercial entity between the health professional and the patient would give rise to divided loyalties on the part of the professional and would destroy the professional relationship that is based on trust and confidence.' The ban applies to for-profit and not-for-profit corporations alike."

A copy of the Opinion 08-803 can be found at:
http://ag.ca.gov/cms_attachments/opinions/pdfs/o548_08-803.pdf

Attorney Comments: This opinion should be of concern for the viability of Independent Diagnostic Testing Facilities under California law and other referral or management arrangements involving radiology. This opinion is broad and there are numerous arrangements where radiologists work with entities that are not professional medical corporations for leasing equipment, technologists, and for billing and collection.

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers. Their website is: http://www.greenassoc.com/

Diagnostic Testing: Attorney Comments On NYT Article About Quality Control And Changing IDTF Laws

When it comes to medical imaging like CT scans and MRIs, the insurance industry and Medicare have been trying to reduce unnecessary tests. According to a New York Times article, the problem with scans is not just quantity: but it’s also quality. See: http://www.nytimes.com/2009/03/02/health/02scans.html

The article states that insurers pay the same for scans done in old machines and newer models, even though the differences of the images can be significant. The article discusses how insurers fail to distinguish between scans done well or poorly or interpreted by more- or less-qualified physicians.

Differences in scan quality have a real impact on patients and the cost of their care. Linking pay to quality may be difficult in medical imaging. Insurers don’t receive the images and reports, making it impossible for them to know whether the scans are high quality.
This article raises additional issues when it is considered in conjunction with OIG’s 2008 report that from 2000 through 2006 Medicare spending for imaging services more than doubled, increasing to about $14 billion. One reason for the increase was the growth in in-office diagnostic services.

For practitioners, this article should also be read in conjunction with an understanding of the key provisions of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA). Under MIPPA, there will be numerous changes which most profoundly affect Independent Diagnostic Testing Facilities (IDTFs) which can be owned by non-medical professionals. Under this law, the changes which include:

■ By 2012, providers of the technical component of advanced diagnostic imaging services must be accredited, at which time CMS may refuse payment to unaccredited suppliers. This includes physician offices. Medicare has not yet developed a list of approved accreditation organizations.
■ By 2010, the Department of Health and Human Services (HHS) Secretary must designate accreditation organizations for suppliers of the diagnostic imaging technical component. CMS will also be conducting a voluntary two-year demonstration project to collect data to determine if advanced diagnostic services are provided appropriately to Medicare beneficiaries.
■ By March 2014, the Government Accountability Office (GAO) must complete a study on accreditation requirements for advanced diagnostic imaging services; specifically, GAO will investigate how required accreditation affects the amount, type, and quality of imaging services provided to Medicare beneficiaries.

■ IDTF facilities and in-office services will continue to be subject to very different standards for staff training and certification. In-office services will remain exempt from the rule requiring IDTFs to use registered radiologic technologists with subspecialty certification for the high-tech scanners they operate.

■ The supervision requirements are also different between IDTFs and in-office settings. The supervising physician for an IDTF must be supervised by a physician deemed proficient in the interpretation of imaging performed with that technology (which is being interpreted as being a board-certified radiologist). In contrast, the supervising physician for an IDTF High-tech equipment in an in-office setting need not be supervised by a physician deemed proficient in the interpretation of imaging performed with that technology. As we understand it, a group practice may designate any of its physicians, regardless of qualifications, to the role.

This new law is in addition to the 2009 Medicare Physician Fee Schedule (MPFS) changes affecting diagnostic studies and IDTFs:

■ Generally, the anti-markup rule prohibits ordering physicians from charging Medicare more for the technical services performed on scanners outside their offices than they paid to rent or lease the equipment. Federal law also prohibits them from billing Medicare for the use of equipment that they own offsite. Under the 2009 rule, claims for the technical component of services are exempted from the anti-markup rule when the physician who supervises the test also performs more than at least 75% of all his or her medical services for the billing physician's practice. Exemption from the anti-markup rule can also be secured by qualifying for the "same building" requirement. This stipulates that equipment is exempted if it's located in the office (or same building) where the billing physician practices.

■ The anti-markup rules still broadly apply to the professional billing component, however. In these instances, the billing physician is prohibited from charging Medicare more than the radiologist is paid to read the imaging study if the study is interpreted at a remote site. Teleradiology and IDTFs will be significantly impacted by this rule. If the radiologist providing interpretation does not bill Medicare separately, then the reassignment of the right to the ordering physician group will be subject to the anti-markup rule.

■ New MPFS rules also require high-tech mobile imaging services to register with CMS as IDTFs. This potentially costly requirement means that mobile services must bill Medicare separately from the healthcare facilities where their mobile equipment visits. The rule even applies to a mobile equipment trailer anchored at a specific site. Until now, mobile services have often billed Medicare through the providers who contract for their services. They have not generally signed on with Medicare as participating providers, much less registered as IDTF. The resulting confusion may require Medicare to clarify, if not modify, its position.

Conclusion: The rules affecting diagnostic studies performed in-office and IDTFs are complex and constantly changing. In addition, the state Medi-Cal laws are different. If your office or IDTF is providing these services, research the new laws, plan for those coming into effect in coming years and make sure you are compliant. Failure to be compliant can result in loss of a provider number, an audit resulting in a significant overpayment or other adverse consequences that can be avoided.

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates. They focus their practice on the representation of individuals, businesses licensed professionals, including health care professionals, including IDTFs, radiologists, individual physicians, corporate providers and group practices.