Billing Compliance Issues for Ambulance Services-Understanding the False Claims Act

The Federal False Claims Act (FCA) is a federal statute that determines criminal and civil monetary penalties for falsely billing the government, over-representing the amount of a service delivered or understating an obligation to the government. The FCA may be enforced by either the Justice Department or a private individual in a qui tam proceeding. More specifically, with ambulance billing, a false claim accusation can be made against an ambulance company for several reasons. A few examples of violations of the FCA include but are not limited to an ambulance service: Billing either Medicare or Medicaid for a transport that didn't actually happen, medical necessity requirements were not met, the charge was "upcoded", the claim was coded incorrectly, or for violations of the federal anti-kickback statute. Federal enforcement of the FCA has been on the increase. For the 2018 fiscal year, federal recoveries under the FCA reached $2.8 billion dollars. Enforcement actions and settlements against ambulance companies for violations of the FCA often result in fines in the millions of dollars. To see how the FCA fines can add up very quickly, let's look at a hypothetical case. In this example, an ambulance company is dispatched to a 911 call for the report of acute abdominal pains-near fainting, with an EMD code of 1C3. An ALS ambulance responds immediately and is met outside by the patient, who is ambulatory, requesting to go to the local emergency department due to a catheter problem. An ALS assessment is completed and appropriately documented. The ambulance company bills Medicare at the ALS-1 level plus loaded mileage. Medicare reimburses the ambulance company $452.00. As a result of a post-payment audit by the Medicare Zone Program Integrity Contractor (ZPIC), they find the claim did not meet medical necessity requirements for payment and is subject to enforcement under the FCA. Fine for filing a false claim:..............$21,562.90

Treble Damages:.....................................$1,356.00 Total fines and damages..................$22,918.90 As a result of the ZPIC audit, they find that 9% of claims the ambulance company submitted did not meet medical necessity requirements and are in violation of the FCA. They apply this error rate to the last two years of claims submitted by the ambulance company to Medicare. Over the last two years, the ambulance company submitted 9,000 claims to Medicare for payment. Applying the 9% error rate to the universe of claims (9,000), they find the ambulance company has received $366,120.00 in over-payments is ordered to pay $18,563,580.00 in fines for violations of the FCA. In addition to the civil liability, the Justice Department can bring criminal charges to the ambulance company that submitted the claims. The criminal charges can include theft, forgery, insurance fraud, identity theft, bribery and money laundering. As you can see, the fines for one false claim can easily cost close to $23,000 in penalties. When the auditor's error rate is applied to a universe of claims, fines can end up in the millions of dollars. In addition to the hundreds of thousands of dollars in legal fees to defend your organization, the negative press received from these enforcement actions is often irreversible. The need for regular internal audits to identify potential over-payments and other compliance-related issues has never been more important for EMS organizations. Summit Public Safety is well equipped to audit your organization's billing practices to help you avoid these costly mistakes. Contact us today to talk about how we can help your organization avoid these costly pitfalls.