NN&I - May 2010
National 12 Nephrology News & Issues May 2010www.nephronline.com Fresenius appeals $19.4M verdict against RCG over Method II billingFresenius Medical Care, facing a $19.4 million penalty over alleged Medicare fraud by the former Renal Care Group, is appealing the verdict, denying pros-ecutor's charges of "unjust enrichment" by billing for patient services.RCG, which was acquired by Fre-senius Medical Care Holdings Inc. in 2005, faced allegations from federal authorities and an employee who served as a "whistleblower" that it improp -erly sought payments for dialysis sup -plies and equipment by opening anoth -er company, Renal Care Group Supply Co., to bill under Method II for home dialysis services. "We disagree with the court's conclusion that payment by the government of claims by RCG's Method II company constituted 'unjust enrich -ment,'" Fresenius spokeswoman Terry Morris said in a statement after the March 24 ruling. In levying the fine, Federal District Court Judge William Haynes Jr. ruled that the company showed "reckless dis -regard" for the law by using offices, employees and other business assets with RCG to illegally bill under Method IIconditions that had drawn con- cerns from RCG's own attorneys, pros- ecutors said. According to evidence presented during the trial, at least 90% of the supply company's patients were also treated in RCG's dialysis facilities. Method II pays about 30% more to companies that sell dialysis equipment and supplies for dialysis treatments in a home setting. The fine is based on the court's estimated payments for the ille-gal claims under Method II, compared to what RCG should have been paid under Method I. GAO report says Spectra Labs owes $5.4M for unnecessary testsA report released on April 2 by the fed-eral Office of Inspector General asserts that Spectra Laboratories, a subsid -iary of Fresenius Medical Care North America, billed Medicare for medically unnecessary laboratory tests over a two-year period. The audit was part of the OIG's scope of work for 2009 to determine "the extent to which the Medicare car -riers have controls in place to detect and prevent inappropriate payments for laboratory tests." The audit was aimed specifically at labs that conduct tests for dialysis patients. Spectra was the first lab service to be audited as part of the OIG initiative. The audit, completed by National Government Services, a Medicare con -tractor, reviewed more than 2.7 mill- ion claims filed by Spectra for tests provided to ESRD beneficiaries who received dialysis at FMCNA clinics from 2004 to 2006. The objective of the OIG was to determine whether the tests billed to Medicare were "reasonable and necessary." The OIG acknowledged that Spectra did not file any claims for composite rate-covered tests, and Spectra correct -ly billed for tests in 67 of the 100 quar -ters sampled by NGS. But the audit did find claims that the NGS deemed were not reasonable and necessary based on Medicare requirements. Of the 37 quarters billed incorrectly, 12 of those quarters cited were about tests con-ducted by Spectra but not ordered by the treating physician. "Spectra did not have sufficient procedures in place to ensure that the tests billed to Medicare were reasonable and necessary," the OIG wrote. "In addition, Fresenius facil-ities did not have sufficient controls to ensure that tests were ordered by the treating physician and were reasonable and necessary." The OIG used the sample results to determine that Medicare overpaid Spectra by $5.4 million. In addition to paying back the money, the OIG said Spectra and Fresenius need to "strengthen their policies and proce-dures to ensure that all tests billed are reasonable and necessary, in compli -ance with Medicare requirements."The Senate and House passed a measure on April 15 providing a sec-ond, temporary delay on a 21.3% cut in Medicare physician payments. Congress had approved a tempo-rary delay on March 2 that held off the cuts for a month. The new delay, retroactive to April 5, gives Congress until May 31 to come up with a more permanent solution. The Senate approved the $18 bil-lion bill by a vote of 59-38. The House then took up the measure and passed it by a vote of 289-112. The legislation also included an exten-sion of eligibility to receive bonus payments provided by the American Recovery and Reinvestment Act for the use of electronic health records to doctors who practice in the outpa-tient setting. While a new extension was being debated, the Centers for Medicare & Medicaid Services held payments for physician services until April 14 to avoid making any cuts.Congress OKs fix to Medicare physician pay cuts National_NNI0510_4.indd 12 4/19/10 1:55:30 PM
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