Many legal scholars have theorized that the civil Racketeer Influenced and Corrupt Organizations Act statutes (RICO), which are designed to go after businesses that are inherently manipulated and corrupted to the point that they function as criminal organizations, were not intended to be applicable to the healthcare industry. However, in the last 10 years, many insurance companies, particularly in the realm of no-fault insurance, have filed such claims against providers. Every so often one of the large insurance companies tends to file another RICO claim in an effort to “clean house” from providers that they feel are billing inappropriately or are operating with non-doctors in a “dummy doc,” or “doc in the box” situation.
Typically, civil RICO claims put a huge amount of pressure on the defendant. This is due to the far reaching ability of a plaintiff to look beyond just the defendant and individuals or the entity in the lawsuit. An insurance company bringing such a suit also has the ability to look into the payments and finances of third parties and the relationship of third parties with the defendant and its owners. This means that any claim of fraud under a civil RICO action could potentially expose any entity, in addition to a management company or other organization that is regularly doing business with the practice (such as a landlord that holds the lease and provides specific services), to scrutiny or inclusion in the civil RICO lawsuit.
Typically there are many concerns that come up with a physician or health care professional, hiring and paying another professional to work for their practice as an independent contractor. This is often done because the potential worker wishes not to have payroll taxes taken out of their compensation. However, there are numerous issues and problems that arise with this type of structure, some unique to the practice of medicine and related health professions, and other more general issues that come up in many industries.
While this might be a favorable tactic in a worker’s attempt to minimize their taxes, it raises issues that could be potential breaches of professional responsibility, severely impacting a health care provider’s license. In addition, providers are generally not permitted to be paid as a 1099 independent contractor if their compensation is based upon a percentage. This runs the danger of becoming illegal fee splitting which is professional misconduct.
More and more, courts are taking aim at no fault insurers who are overstepping their bounds with respect to the Examination Under Oath (EUO) procedure. Recent case law seems to be heading in the direction of protecting physicians and other health care practices from abuses by the insurance carriers during the EUO process.
During the EUO, insurance companies regularly ask for documents such as tax returns, leases, corporate documents, and independent contractor agreements. Recent rulings have stated that the purpose of the EUO process is not the examination of the provider or their corporate status, and that these documents are inappropriate for the purposes of the EUO. The recent district court rulings hold that the insurance company is only entitled to information which is relevant to the verification of the claim in the EUO. Under Malella, as previously held, an insurance company can ask for additional documents if there is a belief of an action tantamount to fraud in the conduct of the medical or professional practice.
Over the last few years, a less well known procedure of chiropractic Manipulation Under Anesthesia (MUA) has become more common among Chiropractors. The multi-day procedure generates aggressive opposition by no-fault insurance carriers due to the high reimbursement rates for the procedure.
Insurance companies are increasingly challenging the medical necessity claims for MUAs, and issues surrounding the anesthesiologist involved with the treatment.
Chiropractors should take extra care that the necessary approvals for such procedures have been obtained, and detailed charts and records are kept.
In an attempt to go after No-Fault Insurance Fraud, New York State and Gov. Andrew Cuomo are seeking to expand current regulations regarding the information that physicians and clinics are required to provide. The expansion would include provisions that will bar suspected providers from participating in, and billing for, services under the No-Fault regulations of New York State.
According to a non-public “list” of suspected providers held by the office of Governor Cuomo, over 100 providers have been initially targeted. Letters are being sent to providers demanding certain information in connection with the investigation. The State has made it clear that such information can be turned over to the Department of Health (OPMC – Office of Professional Medical Conduct) and the Education Department (OPD – Office of Professional Discipline) for the purpose of bringing potential professional misconduct allegations against any physicians and other providers, whom they consider to be engaged in fraudulent activities for action to be taken against their license. Such information might also be shared with other government enforcement agencies.
Providers need to be aware of their rights, and what they are required to do and provide in light of the regulations, should they receive such letters. In many cases, proper planning to make sure that a practice complies with relevant laws and regulations is important prior to any investigation.