DOJ Announces Settlement of Two Cases Involving Allegations of Fraudulently Billing Medicare for Electro-Acupuncture Services - Medicare RAC Audits & Appeals Services
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DOJ Announces Settlement of Two Cases Involving Allegations of Fraudulently Billing Medicare for Electro-Acupuncture Services

using magnifying glass to investigate fraud

On August 25, 2020, the U.S. Department of Justice (DOJ) announced that a pain management physician in Texas had agreed to settle charges of Medicare fraud involving electro-acupuncture services. The announcement comes less than two months after the DOJ announced a similar settlement involving a Texas anesthesiologist.

DOJ: Pain Management Physician Falsely Billed Medicare for Neurostimulator Electrode Implantations

The August press release discusses the case of a pain management physician from Houston. According to the DOJ, the physician fraudulently billed Medicare for neurostimulator electrode implantations (“a surgical procedure that usually requires use of an operating room [and for which] Medicare pays thousands of dollars . . .”) when in fact he performed non-invasive electro-acupuncture procedures. As the DOJ’s press release states:

“This procedure involves inserting needles into patients’ ears with the neurostimulator taped behind them with an adhesive. . . . Medicare does not reimburse for electro-acupuncture devices as implantable neurostimulators.”

The pain management physician, Dr. Syed Nasir, is alleged to have fraudulently billed electro-acupuncture procedures as neurostimulator electrode implantations on multiple occasions during the period from March 1, 2019 through October 31, 2019. Without admitting or denying the allegations against him, Dr. Syed agreed to pay $530,000 to resolve his case with the DOJ.

DOJ: Anesthesiologist Falsely Billed Medicare for Neurostimulator Electrode Implantations

The DOJ announced the prior settlement on June 30, 2020. According to the agency’s press release, this case involved an anesthesiologist from Katy, Texas, which is located just west of Houston. The press release reads similarly to the one issued on August 25:

“From Nov. 1, 2018, to March 31, 2019, Dr. Jaime Robledo billed Medicare for the implantation of neurostimulator electrodes – a surgical procedure that usually requires use of an operating room. Medicare pays thousands of dollars for this procedure.

“However, Robledo did not perform these surgeries. Instead, he applied a device used for electro-acupuncture. This procedure involves inserting needles into patients’ ears with the neurostimulator taped behind them with an adhesive. 

“Medicare does not reimburse for electro-acupuncture devices as implantable neurostimulators.”

Without admitting or denying the DOJ’s allegations, in this case Dr. Robledo agreed to pay $100,000 in order to avoid prosecution for Medicare fraud.

3 Notable Takeaways from the DOJ’s Recent Electro-Acupuncture Settlements

Aside from the substantial settlements that the doctors in both of these cases agreed to pay, there are several other notable aspects of these cases as well. For example, as federal healthcare fraud defense lawyers, our three big takeaways from these two cases are as follows:

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Dr. Nick Oberheiden
Dr. Nick Oberheiden



Lynette S. Byrd
Lynette S. Byrd

Former DOJ Trial Attorney


Brian J. Kuester
Brian J. Kuester

Former U.S. Attorney

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney

Local Counsel

John W. Sellers
John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara
Linda Julin McNamara

Federal Appeals Attorney

Aaron L. Wiley
Aaron L. Wiley

Former DOJ attorney

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (DOJ)

Chris Quick
Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow
Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

1. Both Investigations Targeted the Exact Same Allegations

First, both of the investigations targeted the exact same allegations: fraudulently billing for neurostimulator electrode implantation surgical procedures when the actual procedure performed was non-surgical electro-acupuncture. This suggests that the entity or entities behind the investigations (more on this below), have identified an issue that they have decided to target specifically. This happens frequently in the world of healthcare billing compliance; and, once a billing fraud trend has been identified, it is not uncommon for multiple providers to face allegations in short succession.

2. Both Investigations were Conducted with the Assistance of Qlarant

Second, the DOJ’s press releases indicate that both of the investigations were conducted, “with the assistance of Qlarant.” Qlarant is the Unified Program Integrity Contractor (UPIC) for Medicare in Texas and several other states. UPICs are fee-for-service contractors that work with the Centers for Medicare and Medicaid Services (CMS) to uncover fraud, waste, and abuse (FWA) in the Medicare and Medicaid programs.

All Medicare providers are subject to being audited by the UPIC for their region. During UPIC audits, auditors thoroughly examine providers’ program billing records in order to uncover evidence of fraudulent billings and overpayments. Since both of these investigations appear to have been initiated as the result of Qlarant audits, it seems as though Qlarant may be specifically looking for evidence of providers fraudulently billing for electro-acupuncture, and its auditors may be considering use of neurostimulator electrode implantation billing codes as a “red flag” for fraud.

3. Both Settlements were Based on Several Months’ Worth of Fraudulent Billings

Third, in each case, the settlement amounts were calculated based upon several months’ worth of allegedly fraudulent billings. This is not unusual, but it is worth noting for healthcare providers that bill Medicare, Medicaid, and other healthcare benefit programs.

Under the False Claims Act, each individual “false or fraudulent billing” is considered a separate offense. So, if your practice routinely bills a service incorrectly, each individual billing is its own violation of federal law. When these billings are uncovered during an audit or investigation, they can lead to substantial liability. Assuming you are not charged criminally, each individual violation carries a civil fine of up to $23,331 (as of June 2020). This is in addition to liability for recoupments, treble damages, other financial penalties, and the potential for pre-payment review or program exclusion.

When Do Medical Billing Mistakes Amount to Medicare Fraud?

Based on the information provided in the DOJ’s press releases, we do not know whether either doctor is alleged to have intentionally engaged in Medicare fraud, or whether the doctors (or their billing administrators) simply made a mistake. However, this raises another important point for healthcare providers as well: When it comes to Medicare fraud, claiming that you made an “innocent mistake” is not a defense.

The False Claims Act is one of several statutes that the DOJ uses to pursue Medicare fraud allegations; and, like many other federal statutes, it includes provisions for both civil and criminal enforcement. While criminal charges for Medicare fraud require evidence of intent, civil charges do not.

As a result, when facing Medicare audits and investigations, healthcare providers need to be extremely careful about how they choose to defend themselves. For example, the following are not defenses to allegations of civil Medicare fraud:

  • Mistakenly billing a non-reimbursable service as a reimbursable service.
  • Mistakenly submitting the wrong billing code for a reimbursable service.
  • Relying on a third-party billing administrator that inadvertently submits a false billing.

Improperly billing Medicare is a violation of the False Claims Act (and potentially other statutes as well), and this is true regardless of whether or not an honest mistake was made.

How Can Medicare Providers Avoid Costly Billing Mistakes?

Given the severe consequences of billing errors, and given that auditors and federal investigators routinely examine providers’ billing records for evidence of fraud, what can providers do to avoid getting into trouble with the DOJ? Billing compliance is key, and providers of all sizes need to adopt and implement effective Medicare compliance programs.

In addition to submitting incorrect billing codes, there are numerous other issues that can lead to Medicare fraud allegations as well. An effective Medicare compliance program will address all of these risks, and will facilitate the implementation of internal procedures and controls that systematically identify and prevent compliance failures. To this end, the core components of an effective Medicare compliance program include:

  • Medical staff training
  • Administrative staff training
  • Contractual protections in third-party agreements (i.e. third-party billing administrator contracts)
  • Identification of correct Medicare billing codes for all services the practice offers
  • Procedures for establishing and documenting medical necessity for all services
  • Recordkeeping protocols
  • Copay billing and collection protocols

In addition to preventing billing errors that create exposure to Medicare fraud allegations, effective billing compliance programs can help improve healthcare practices’ profitability as well. For example, compliance programs can (and should) also address issues such as:

  • Ensuring that all services get billed
  • Avoiding delays in billing
  • Improving the practice’s collection rate (which should be well above 90%)

What Should You Do if Your Practice is Being Audited or You are Under Investigation for Medicare Fraud?

Even if your practice has a Medicare compliance program in place, it will still be audited, and it is possible that federal authorities could still choose to examine your practice’s Medicare billings as well. Unfortunately, this is just the reality of billing a federal government program that suffers tens of billions of dollars in fraudulent losses each year.

If you are facing a Medicare fraud audit or investigation, what should you do? First and foremost, you need to engage experienced federal healthcare fraud defense counsel. You will need to hire a law firm to handle the audit or investigation on your practice’s behalf, and it is extremely important that you choose a law firm with specific experience in Medicare fraud matters.

Once you engage a healthcare fraud defense law firm, your lawyers will reach out to the auditors or investigators who are looking into your practice, and they will conduct an independent, privileged assessment of your practice’s Medicare compliance efforts. With the knowledge gained from this assessment in hand, your attorneys can then execute a defense strategy focused on protecting you against Medicare fraud liability. Learn more: What You Should Do When You Are Under Investigation for Healthcare Fraud?

Speak with a Healthcare Fraud Compliance and Defense Lawyer at Oberheiden P.C.

Does your practice bill Medicare for neurostimulator electrode implantations? Do you have concerns about your practice’s liability risk in the event of a Medicare fraud audit or investigation? Our healthcare fraud defense attorneys assist service providers and businesses under investigation for alleged Qui Tam Lawsuit, Stark Law, False Claims Act, or Anti-Kickback violations. To speak with a healthcare fraud compliance and defense lawyer at Oberheiden P.C., call 888-680-1745 or request a confidential consultation online now.

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