White Collar Criminal Defense Group

Failure To Comply With Requirement For Documented Physician/Patient Face-To-Face Encounter Will Result In Denial/Overpayment Demand For Home Health Services

Correct documentation is always important.  Recently, HHS-OIG provided another example why.

HHS-OIG recently published a Report, “Limited Compliance With Medicare’s Home Health Face-to-Face Documentation Requirements.”  [Link]  HHS-OIG concluded, after an extensive audit, that 32% of home health claims that required face-to-face encounters were improperly documented and failed to meet Medicare requirements, resulting in $2 billion in Medicare payments that never should have been paid.

To qualify for home health services, Medicare beneficiaries must: 1) be homebound; 2) need intermittent skilled nursing care, physical or speech therapy, intermittent home health services, or other services; 3) be under the care of a physician, and 4) be under a plan of care that has been established, and periodically reviewed, by a physician.

In order for home health agencies to be paid, a physician must certify initially the beneficiary’s need for home health services and recertify that need every 60 days.  For the first certification, the physician must document (and sign) a face-to-face encounter with the patient.  The documentation must include:

1. Certifying physician’s identifying information with physician’s signature;
2. The face-to-face documentation must be title as such;
3. The date of the face-to-face encounter must be documented;
4. The face-to-face encounter must occur within 90 days prior to start of home care, or within 30 days after start of care; and
5. The documentation must include a description of:
   • Why the patient is homebound; and
   • Why the skilled service is necessary.

Failure to document remains one of the most routine bases for overpayment demand by Medicare.  Given recent regulations promulgated pursuant to the Affordable Care Act, and recent MAC and court opinions overwhelmingly upholding overpayment decisions for lack of documentation, this report and audit is important guidance to home health care service providers.  We expect increased review of, and resulting overpayment demands to, home health care service providers as a result of this report. 

Twin Brother Pharmacists Sentenced To 42 Months In Prescription Drug Scam

Pharmacists, and twin brothers, William and Robert Carlucci, owners of the West Orange Pharmacy were sentenced to 42-months in federal prison for billing for prescription drugs that were never dispensed.  According to the Government, the brothers from 1997 to 2012 used a system of secret codes dubbed “TRADE-QUICK” to underfill prescriptions.

Under the “TRADE-QUICK” system, each of the letters in the name corresponded with consecutive numbers, beginning with “T,” standing for the number one, and ending with “K,” standing for zero.  According to federal prosecutors, two-letter codes would be entered into pharmacy logs to indicate how a prescription was to be shorted. For example, a 90-pill prescription that only received 60 pills would be tagged “QK,” but the brothers would bill for the larger amount.  At other times, the Carluccis would charge insurers and Medicaid for refilling prescriptions without patient knowledge, and bill for brand-name drugs when dispensing generics.  According to the U.S. Attorney for the District of New Jersey, the Carluccis devised codes to carry out those practices as well.

According to the government, this scheme went beyond overcharging for dispensing medication.  For example, on occasions when prescriptions were not profitable, the brothers “looked through a patient’s profile and found additional costs that they could pass on to Medicaid and other insurance companies.”  The government further alleged that there were instances where the two pharmacists illegally supplemented their inventory by purchasing unused drugs back from their customers, and by purchasing discounted medicines from unlicensed wholesalers.

The brothers also were each fined $75,000 and ordered to pay $750,000 apiece in restitution.  A co-conspirator in the case, Leonard Stefanelli, has pleaded guilty to illegally dispensing narcotic painkiller oxycodone and will be sentenced later this year.

The cases are U.S. v. Carlucci, case number 2:13-cr-00511, U.S. v. Carlucci, case number 2:13-cr-00512, and U.S. v. Stefanelli, case number 2:14-cr-00036, in the U.S. District Court for the District of New Jersey.