Government fraud-busters have an eye on imaging

The federal government has put a lot of time and money into cracking down on healthcare fraud in recent years, highlighted by the headline-grabbing sweep just last week that involved 243 arrests and $712 in false billings. And this focus on healthcare fraud affects radiologists and technologists more than they may realize.

According to Ken Davis, a partner at the law firm Katten Muchin Rosenman LLP, the increased attention toward healthcare fraud has been hugely successful for the government. That success has led investigators to dig deeper into the problem, resulting in more attention going to specific specialties, like radiology.

“I think what you’re seeing now is, they’re looking for new areas to focus on,” Davis told in a phone interview. “And I think radiology is one that is, from their  perspective, a sensible area to be looking at, because of the big dollars that are involved.”

Davis said one reason that radiology has gained the government’s attention is the shared belief that imaging involves a certain amount of wasteful spending.

“There’s a general sense that a not-insignificant percentage of radiology is unnecessary,” he said. “You could probably get most people to acknowledge that maybe 5-10% is not necessary. And then some people will say 30% or 40% is unnecessary. If you’re looking at it from the federal government’s standpoint, you’re saying, ‘if we can eliminate that, then we can save a tremendous amount of money for Medicare.’”

Davis said investigators seem to be keeping a close eye on radiology in two ways:

·         seeking out inappropriate relationships between referring physicians and imaging centers

·         pushing for an increase in regulations

Seeking out inappropriate relationships

Perhaps the easiest kind of fraud to identify in all of radiology is an inappropriate relationship between a referring physician and an imaging center or hospital. For example, in the recent “Operation RayScam” kickback scheme in New Jersey, an imaging center bribed a physician for referrals to the benefit of both parties. Referring physicians aren’t always compensated with under-the-table cash in these instances, Davis said. The payoff could come in the form of a hospital working out a ‘sweetheart’ deal for a physician to rent out space or even a hospital handing out a high-ranking staff position.

 “Imaging centers—whether they are freestanding, independent testing facilities, owned by a radiologist, or owned by a hospital—the one thing they have to be careful about is their relationships with their referring physicians,” Davis said.

The government watches these financial relationships so closely that imaging centers sometimes get in trouble for non-monetary compensation.

Davis listed sporting event tickets and gift baskets as examples of this type of activity. Imaging centers do have an exception for non-monetary compensation that allows for imaging centers to spend a certain amount of money each year as “marketing” or “gifts” to a referring physician. But going even a dollar over that limit can draw the attention of investigators. In 2015, that allowed amount is $392, up from $385 in 2014.

“Let’s say you wanted to provide a wine and cheese basket at Christmas to your referring physicians and that’s all you wanted to do, and it’s $150,” Davis said. “You could probably provide that to them … but the problem with the limitation is, when most imaging centers are out doing pro-active marketing with referring physicians, if you start adding up everything they’re doing for that physician and that practice, you can burn up that non-monetary compensation amount very quickly.”

Most imaging centers will track their non-monetary compensation numbers closely, Davis said, because too much “marketing” can quickly morph into serious healthcare fraud.

An increase in regulations

Investigators sniff out sloppy, more obvious cases of fraud at a rapid rate, but the government’s other tool for cutting down on spending in radiology is taking a more regulatory approach, Davis said.

Regulations related to clinical decision support (CDS) are one example of this. The CDS software has been shown to cut down on utilization, so once it’s mandatory in 2017, it is expected to have a significant impact on exams that may be viewed as wasteful. This doesn’t mean the sole reason for CDS requirements is to save money—it’s also seen by many as being beneficial to both patients and physicians—but those savings are certainly something the government will be happy to see.

Another example Davis pointed to was the attempts to update the Ethics in Patient Referrals Act, commonly known as the Stark Law, so that the in-office ancillary services exception wouldn’t apply to advanced imaging. (In Maryland, this update is now the law, but nothing has gone through on the federal level yet.)

These regulatory changes don’t necessarily lead to criminals being caught red-handed for committing fraud, but they can help the federal government save at least some of the money they’re aiming for while creating an environment where it is more difficult for that fraud to occur.