Hematology-Oncology Practice settles for $5.31 Million for Submitting False Claims

November 8th, 2016

In October, the United States Attorney for the Southern District of New York and his counterpart from the Department of Health and Human Services Office of the Inspector General’s (HHS-OIG’s) New York Region, announced a $5.31 million settlement of a civil fraud lawsuit against a Manhattan based hematology-oncology group, Hudson Valley Associates. This settlement resulted from claims brought under the False Claims Act.

The government’s complaint, filed after it intervened on a whistleblower qui tam action, alleged that Hudson Valley routinely waived Medicare beneficiaries’ copayments without an individualized documented determination of financial hardship or exhaustion of reasonable collections efforts. Having thus waived the copayments, Hudson Valley received higher reimbursement from the Medicare than it was entitled to.

Additionally, the government claimed that Hudson Valley routinely overbilled for office visits and billed for routine procedures on the same date as office visits without documenting that it provided any significant, separately identifiable office visit on that same date. This issue relates to the inappropriate use of the so-called Modifier 25. The Centers for Medicare & Medicaid Services (CMS) does not normally allow additional payments for separate office visit services performed by a provider on the same day as a procedure. However, if a provider performs an office visit service on the same day as a procedure that is significant, separately identifiable, and above and beyond the usual preoperative and postoperative care associated with the procedure, Modifier 25 may be attached to the claim to allow additional payment for the separate office visit service. CMS states that a significant number of claims using Modifier 25 do not meet the programs requirements and they have therefore aggressively sought to limit its inappropriate use.

The government also claimed that Hudson Valley billed Medicare and Medicaid for office visits without documenting in the medical record that those services were medically necessary and/or that those services were actually performed.

Hudson Valley entered into a corporate integrity agreement with HHS-OIG, committing to establishing a compliance program, submitting to monitoring by HHS-OIG for five years, and taking other specified steps to ensure future compliance with Medicare and Medicaid rules.

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