The Self Reporting Quandary

8-ball.jpgIf a provider discovers that it may have submitted false claims to Medicare or Medicaid, either through errors or through the malfeasance of an employee, the provider is obligated to pay the program back the funds wrongfully obtained. Medicare has a self disclosure protocol that allows providers to report false or erroneous claims but the terms of the protocol does not guarantee that by so doing anyone will avoid triple times damages under the False Claims Act or criminal prosecution.
When a provider self reports, its owners and employees can hope to avoid false claims or criminal liability based upon the benefit of telling Medicare before the false claim is otherwise discovered; whether through a whistleblower or the Program itself. However, often the problem can be large enough to cause serious financial distress to the provider or put other seemingly non responsible employees or owners at risk of criminal prosecution. Once reported, providers generally lose control of what happens; the money is not owed by only the criminal, but also the apparently innocent provider itself. The overpayment cannot be paid back at the provider’s schedule and the provider cannot control who the government decides to hold liable for the fraudulent acts.
Many times when reporting the crimes, others, innocent of the crime, also face scrutiny and the criticism “how could you have not known about this” is directed at the leaders of the organization. Some providers facing these circumstances, based upon a lack of certainty of the outcome, are tempted to end the problem, not report it, and hope that no one figures it out, fearing their own disclosure could be ruinous. This, of course, is the wrong decision, if discovered, the failure to disclose certainly tends to make everyone involved both in the activity and the decision to cover it up look guilty of a crime.
Take the case of the Eye Specialty Group of Memphis . They discovered that a physician employee was diluting the drugs used on patients so he could steal the excess drugs to sell for a profit. However, the provider unknowingly submitted claims to Medicare based upon the doctor’s services as if the doctor had been providing the accurate dose, causing the submission of false claims to Medicare. The provider had purchased all of the medicine it billed for, but the crooked doctor was stealing and reselling the excess medication. So the provider reported the doctor to the authorities and the result was a bill from Medicare for hundreds of thousands of dollars, potential lawsuits by patients, and a lot of really bad publicity.
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