Understanding Your Role in Compliance Malfeasance: Part I

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Are you part of the problem or the solution?

EDITOR’S NOTE: In a two-part series, physician-attorney Dr. John K. Hall will explore routine findings that may make you reconsider your role in compliance malfeasance.

Many of us review records regularly. The purpose of our reviews relates to aspects of revenue cycle, utilization, quality, or occasionally, peer review.

Our view of the services provided by our organizations is shaped by our reviews of the record. We suspect who might be a good provider based on the completeness of the record and the ability of a provider to lead us through their thought process, to diagnostic or therapeutic success. Many of us are unsurprised by denials and audits. As we review records, some of us wonder why we don’t see more denials and audits.

One of the possibilities we are forced to consider is the possibility of wrongdoing. That’s what I want to talk about in this two-part series.

Let’s stop for a moment and consider the nature of fraud. If you Google
“CMS (the Centers for Medicare & Medicaid Services) and fraud” together, it takes less than half a second to return over 20 million hits.

The first hit is invariably an advertisement for a whistleblower law firm, telling you if you properly report Medicare fraud, you may be entitled to a significant whistleblower reward. The ad will often claim that Medicare fraud is the largest area of fraud committed against the government, and that 10 percent of claims are fraudulent.

Further down in the results will be an MLN document from January 2021. This will tell you that fraud “typically” involves a range of activities related to Medicare claims, provider referrals, and provider relationships. Crucially, each of the described activities includes the words “knowingly.” That single word shapes the rest of our discussion. In legal terms, “knowingly” means that someone has actual knowledge of the prohibited nature of the actions, acts in deliberate ignorance of the prohibited behavior, or acts in reckless disregard of the prohibited behavior.

Essentially, “knowingly” means that someone realized what he or she was doing, was aware of the nature of the conduct, and did not act through mistake or accident. That being said, the law generally requires no proof of specific intent to defraud. In other words, fraud may be a byproduct of other intentional actions.

Next, we need to look to the False Claims Act, or FCA. This is the most common law under which healthcare fraud is charged. To violate the FCA, a person must have submitted, or caused the submission of, the false claim “with knowledge of the falsity.” There’s that pesky knowledge requirement again.

As we review these records, it’s the patterns we notice. In particular, it’s templated language such as “this patient presents for TKA after a minimum of six months of aggressive yet appropriate, conservative, non-operative therapy, including physical therapy, weight reduction, and assistive devices. The pain continues to limit activities of daily life, as well as the patient’s general enjoyment of life.”

That is actual language from several hundred records, by the way. I’m sure you noticed that there’s no reference to the side – or the patient’s gender. 

The question we all ask is, is this real? Is this valid? Is this even good medicine? These are the questions we’ll address in the second part of this series, along with your liability.


John K. Hall, MD, JD, MBA, FCLM, FRCPC

John K. Hall, MD, JD, MBA, FCLM, FRCPC is a licensed physician in several jurisdictions and is admitted to the California bar. He is also the founder of The Aegis Firm, a healthcare consulting firm providing consultative and litigation support on a wide variety of criminal and civil matters related to healthcare. He lectures frequently on black-letter health law, mediation, medical staff relations, and medical ethics, as well as patient and physician rights. Dr. Hall hopes to help explain complex problems at the intersection of medicine and law and prepare providers to manage those problems.

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