Wound Care Healthcare Fraud is On the Rise - What You Need to Know About Protecting Your Practice
As the U.S. Department of Justice continues to crack down on healthcare fraud, wound care providers must take heed.
As healthcare compliance experts, we explore the important laws you need to know, and provide actionable steps you can take to stay compliant.
Stories about wound care schemes, false healthcare claims and billing practices, and other types of healthcare fraud continue to make news headlines.
In June 2024, the U.S. Department of Justice charged nearly 200 people in healthcare fraud schemes that included approximately $2.75 billion in alleged false claims. Among the individuals were two Arizona wound care company owners and two nurse practitioners who are accused of providing unnecessary and costly amniotic wound grafts to elderly patients in an effort to submit fraudulent claims to Medicare - to the tune of $900 million - and accept more than $330 million in kickbacks.
With an increase in wound care fraud cases and a nationwide crackdown from the Department of Justice, compliance needs to be top of mind for healthcare providers that want to prevent regulatory scrutiny and criminal fraud charges.
More than $100 billion may be lost in fraud, waste and abuse annually - U.S. Department of Justice
Fraud and Abuse Laws Wound Care Providers Need to Know
For wound care centers and providers, there are certain federal fraud and abuse laws they need to abide by to prevent regulatory scrutiny, criminal penalties, civil fines, exclusion from the federal health care programs, and the loss of their medical licenses.
Compliance with federal and state regulations for wound care also ensures that providers deliver safe, quality care, protect the privacy and security of patients’ health information, build trusted relationships with patients, and protect—and strengthen—their reputation.
According to HHS-OIG, some of the federal fraud and abuse laws that a wound care provider needs to be aware of include:
False Claims Act (FCA)
The FCA prohibits submitting false or fraudulent claims for payment to Medicare or Medicaid. Violators can incur fines of up to three times the program's loss as well as $11,000 per claim filed. Plus, under the civil FCA, each instance of an item or a service billed counts as a claim which can further increase fines and violators can also face imprisonment.
The AKS is a law that makes the knowing and willful payment of “remuneration,” or anything of value (cash, expensive hotel stays, and meals, etc.) in exchange for patient referrals, or services payable by a federal healthcare program a crime. The statute covers both the payers and recipients of kickbacks.
Providers could be at risk for violating the statute for certain activities that may seem harmless such as sales reps applying a product to a patient or providing physicians with an excessive amount of free samples.
Providers can incur criminal penalties and administrative sanctions including fines, jail terms, and exclusion from participation in the federal health care programs. Under the Civil Monetary Penalties Law, they can also face penalties of up to $50,000 per kickback plus three times the amount of the remuneration, HHS-OIG states.
Physician Self-Referral Law
The Physician Self-Referral Law, or Stark Law, prohibits providers from referring patients to receive designated health services such as clinical laboratory services or Durable Medical Equipment (DME) from entities that the providers or an immediate family member have a financial relationship with, including ownership and investment interests and compensation arrangements.
The Stark Law also prohibits providers from submitting claims in violation of the law’s restrictions on referrals. Providers who violate the law can incur fines and be excluded from participation in the federal health care programs, according to HHS-OIG.
How to Stay Compliant and Protect Your Practice
To mitigate fraud, waste and abuse and stay compliant with federal regulations, healthcare organizations must take certain steps.
Stay up to date with medical billing and coding
With growing complexity, evolving standards, regulatory requirements, and best practices, healthcare organizations should ensure coders and revenue cycle staff are continuously reviewing and staying up to date with the billing and coding guidelines for wound care. Doing so allows organizations to stay compliant, mitigate risk, and avoid potential legal action and penalties.
Develop a robust compliance program
The Department of Justice states that healthcare organizations must have a compliance program in place. The program should include seven identified elements, including internal investigations. In cases of suspected fraud, waste, or abuse, an investigation:
• determines whether or not the report is valid and identifies any misconduct
• mitigates potential risks to the organization, its employees, and patients
• demonstrates the organization’s commitment to compliance and integrity
A compliance program should include policies and procedures, its expectations for employees, and a system for employees to report suspected wrongdoing. The program should also include provisions and procedures for conducting internal investigations, identify the roles and responsibilities of the team, and include the reporting requirements and actions that must be taken after the investigation is complete.
With an uptick in wound care fraud, there’s no doubt that the Department of Justice will continue to prioritize its efforts to identify and prosecute cases. The team of experts at CCG Healthcare has a thorough understanding of healthcare compliance and will put their experience to work for you by partnering with your organization to develop a comprehensive compliance program and in cases of suspected fraud, waste, and abuse, conduct internal investigations that can lead to a favorable outcome.
To learn more, contact us today.