The U.S., on behalf of the Department of Health and Human Services (HHS), is suing several healthcare groups for allegedly engaging in a Medicare billing “scheme” through a "quantity over quality" policy on patient visits, costing taxpayers tens of millions of dollars.
“Defendants have engaged in a years-long, wide-ranging health care fraud scheme that involved billing Medicare for thousands of false claims for visits with nursing home and assisted living facility residents,” assisted U.S. attorney Steven Weinhoeft wrote in the lawsuit.
“These claims were false because the associated patient visits were either not performed, not medically necessary, or insufficient to meet the requirements of the billing code for which reimbursement was received. Defendants’ unlawful scheme netted tens of millions of dollars in payments, with American taxpayers footing the bill,” Weinhoeft added.
The suit was filed against defendants General Medicine PC, General Medicine of Illinois Physicians PC, General Medicine of North Carolina PC, Advanced Medical Haggerty Partners PC, Borough Medical Partners PC, Centro Medical Partners PA, City Medical Partners PA, Integrated Medical Partners PA, Metro Medical Haggerty Partners PA, Metropolis Medical Partners PA, National Medical Partners PA, New Castle Haggerty Medical Partners PA, Regional Medical Partners PA, Sigma Haggerty Medical PA, Silverton Medical Partners PA, Statewide Medical Partners PA, Vicinity Medical Partners PA, Westco Haggerty Medical Partners PA and Thomas M. Prose. The suit states that Prose owned and operated numerous medical entities.
The complaint was brought under the False Claims Act and alleges common law theories of fraud, payment by mistake and unjust enrichment.
The complaint states that the defendants, referred to as GM Shell Entities, agreed to work with General Medicine PC to execute the alleged health care fraud scheme with General Medicine PC serving as the dominant public front of the company. The GM Shell Entities were allegedly used to employ clinicians in various states or to bill Medicare for services performed by employees of General Medicine PC and other GM Shell Entities.
Beginning as early as Jan. 1, 2013, the defendants are accused of playing “a numbers game designed to bill as many patient visits as possible, regardless of whether those visits were actually performed as documented or medically necessary.”
The defendants allegedly submitted inflated claims to Medicare in an effort to bill at the highest possible rates when the services they provided did not meet the requirements of those billing codes.
“Despite receiving numerous warnings since at least 2013 that GM’s visits were excessive, medically unnecessary, and did not meet the requirements for the codes that were billed, the only changes defendants made to their scheme were designed to further conceal their fraudulent practices from Medicare,” Weinhoeft wrote.
The suit alleges the defendants also avoided obligations to pay back money they allegedly received fraudulently from the government.
The visits were allegedly dictated by GM policy rather than medical need. One clinician explained the practice as being “quantity over quality.” The adopted policies established “regulatory” visits, requiring clinicians to perform them at regular intervals and led them to believe the medical visits were required by Medicare regulations.
“In addition, defendants instructed their clinicians to perform more face-to-face visits with nursing home residents for other identified situations, such as reviewing the results of a routine lab test or signing a form, regardless of whether the patient’s medical condition necessitated a visit,” Weinhoeft wrote.
The suit states that the number of regulatory visits varied for each patient’s insurer. Medical providers were allegedly instructed to perform at least two separate regulatory visits for each Medicare patient per month. Whereas, medical providers were instructed to perform only one regulatory visit for each Medicaid patient per month. Medicaid programs typically pay providers “much less” per visit than Medicare, the complaint alleges.
“GM required clinicians to perform more ‘regulatory’ visits with Medicare beneficiaries than Medicaid beneficiaries, even though the same CMS regulations applied to the treatment of long-term care residents whether they were insured by Medicare or Medicaid,” Weinhoeft wrote.
The complaint alleges that sometimes these regulatory visits, including care plan reviews and monthly medication reviews, were conducted a day or two after the patient’s last visit by a clinician and “provided little to no benefit to the resident.”
Billing care plan reviews and monthly medication reviews separately was a form of unbundling, the suit states. Unbundling is “the practice of billing multiple procedure codes for a group of procedures that are covered by a single comprehensive code.” Medical providers have been warned against unbundling, which is fraudulent when used for the purpose of increasing reimbursement.
“Moreover, GM instructed clinicians to perform a full physical examination of the patient during each MMR, regardless of when the patient was last examined and regardless of whether it was medically necessary for the visit,” Weinhoeft wrote.
Clinicians were allegedly incentivized to perform visits with quotas and compensation structures based on the number of visits conducted.
“Initially, GM’s employment contracts required clinicians to agree to a minimum quota of visits per day,” Weinhoeft wrote. “If a clinician performed fewer than the daily quota, the contract established that the clinician’s pay could be reduced. If a clinician performed more than the daily quota, the clinician could receive a bonus for each additional visit.
“GM later changed its compensation structure from a daily quota to payment on a simple per-visit basis.”
The suit states that in November 2016, two nurse practitioners discussed via text about how difficult it was to find enough visits to meet their quotas each month.
Then in November 2017, another nurse practitioner complained to GM management that she had to make up reasons to see patients in order to meet her quota of 18 visits per day.
Another nurse practitioner was conducting a regulatory visit when a patient died at a Southern Illinois nursing home on Dec. 1, 2015. General Medicine PC and the GM Shell Entities then repeatedly billed Medicare for visits on that same day.
“Performing ‘regulatory’ visits to fulfill GM quotas was especially unnecessary when the patients died the same day,” Weinhoeft wrote.
Other GM medical providers performed “gang visits” by seeing “large numbers” of nursing facility residents in one day.
The suit alleges that the defendants’ pressure for medical providers to meet quotas meant that clinicians spent minimal time with patients, did not perform comprehensive visits, or billed for visits that were not performed at all.
In one example, the defendants allegedly billed for 75 patient visits performed by a single nurse practitioner over a two-day period from July 3-4, 2017.
“When considering the estimated time to complete each visit based on the CPT codes billed, it would have taken 43 hours over a 48-hour period to perform those services,” Weinhoeft wrote.
Additionally, several clinicians’ progress notes included the wrong medications and incorrect patient physical condition or history.
“Multiple progress notes listed vital signs that were identical to vital signs documented in nurse’s notes from previous days, suggesting they had just been copied from the chart,” Weinhoeft wrote.
The suit alleges the defendants billed for duplicative services as nurse practitioners and physicians “rarely coordinated with each other about the various services they were supposedly providing.” GM billers would allegedly change one of the visits to something else, so both visits could be billed.
Nursing facilities, clinicians and patient families allegedly complained to the defendants about the excessive visits and raised concerns that they may be fraudulently billing.
In response to investigations and audits by Medicare, General Medicine and Prose created the GM Shell Entities in February 2016. Prose was the sole shareholder, officer and registered agent for all of the new entities.
The defendants operated and managed all medical services and business out of an office in Novi, Mich. Additionally, the suit states that functions such as human resources, billing, accounting, business development and clinical operations were performed by General Medicine PC employees for all GM Shell Entities.
“Nursing homes and assisted living facilities often were not aware that GM Shell Entities existed and believed all services were performed by employees of General Medicine PC,” Weinhoeft wrote.
Additionally, nurse practitioners and physicians were not aware of the numerous GM Shell Entities or that multiple entities billed for their services, the suit alleges. Some of the employees would also enter into an employment agreement with one entity but would be paid by multiple other entities without explanation, the suit states.
After the GM Shell Entities were created, a Missouri Medicaid audit and compliance was initiated against General Medicine PC, which found that 100 percent of the initial nursing facility visits were billed using the highest possible code, subsequent visits were billed at a rate 14 times that of other medical providers, and providers spent an unlikely number of hours per day providing services, among other allegations.
Then in July 2017, General Medicine PC’s Medicare enrollment was revoked.
“Defendants simply continued billing Medicare for the same medically unnecessary and upcoded services through the numerous GM Shell Entities,” Weinhoeft wrote.
The suit alleges Prose orchestrated the fraudulent policies and profited from the results.
U.S. District Court for the Southern District of Illinois case number 3:22-cv-651