Too Many Doctors are NOT Following the Simple Basic Rules
“Why? It’s too easy to do it right” Mark Studin 2017
I just finished a compliance review with a doctor who has been in the program for years and uncovered the following problems. Some of these persistent problems have RICO implications, while others will prevent this doctor from getting paid. All of them will tell a lawyer: DO NOT WORK WITH ME!
First, let’s define RICO. It’s real and you are subject to these violations if you do not follow the rules:
Section 1962(c): Conduct of an enterprise.
Most civil RICO claims are filed under 1962(c), which makes it unlawful to "conduct or participate, directly or indirectly, in the conduct" of an enterprise through a pattern of racketeering activity. The four primary elements of this subsection, as set out by the Supreme Court, are "(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity." fn1280
The interpretation of the first three of these requirements (the fourth is relatively uncontroversial) is shrouded in considerable uncertainty, only some of which has been resolved by the Court. The judge should therefore give early attention to determining the definitions applied in the circuit.
* "Conduct." The Supreme Court has ruled that liability for "[participating]" in the "conduct" of the enterprise extends only to those who "have some part in directing [the enterprise's] affairs," adopting the "operation or management" test articulated by the Eighth Circuit. fn1281 The defendant need not be in upper management; liability may extend to lower-level employees under the direction of upper management, persons associated with the enterprise who exert control over it (for example, by bribery), and outsiders who participate in the operation or management of the enterprise. fn1282
Nevertheless, the allegations against at least some defendants, particularly outsiders (such as accountants, attorneys, or lenders), may fail to satisfy the conduct requirement. In some cases, a Rule 12 motion or a motion for summary judgment may be an appropriate vehicle to resolve this issue. fn1283
* "Enterprise" and "Person." Most courts have ruled that 1962(c) was designed to punish only the persons who run an enterprise illegally and not the enterprise itself, which often will be an innocent victim of the racketeering activity. fn1284 Therefore, 1962(c) requires pleading and proof of two separate entities a "person" and an "enterprise" with only the "person" being liable for damages. fn1285
Three different theories have been used to attempt to reach the assets of a corporate enterprise despite this requirement: (1) affiliated corporations; (2) vicarious liability; and (3) association-in-fact enterprises.
A RICO enterprise must, however, be a continuing unit that has some type of organization and constitutes an entity separate and apart from the alleged pattern of racketeering; fn1289 claims alleging association-in-fact enterprises have been dismissed on pretrial motions for failure to allege the requisite continuity, or for failure to identify an enterprise that is more than a corporate entity and its agents conducting their regular business. fn1290
* "Pattern." The Supreme Court's most recent attempt to define the "pattern" requirement was in H.J. Inc. v. Northwestern Bell Telephone Co., in which it ruled that proving a pattern requires showing that the racketeering acts "are related" and "amount to or pose the threat of continued criminal activity." Fn1291 The Court defined "related" acts as those "that have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics and are not isolated events." fn1292
The Court defined "continuity" to require either "a closed period of repeated conduct" or "past conduct that by its nature projects into the future with a threat of repetition." fn1293 Whether the acts "establish a threat of continued racketeering activity depends on the specific facts of each case." fn1294
In other cases, courts have applied a multifactor test to determine whether a pattern of racketeering activity has been pleaded or proved. The factors considered typically include the nature, number, and variety of predicate acts; the duration or time span involved; fn1297 the number of victims; the number of separate transactions involving unlawful conduct; and the presence of distinct injuries. fn1298
4. Section 1962(d): Conspiracy.
This subsection makes it unlawful to conspire to violate the previous three. To state a claim under 1962(d), a plaintiff must plead that the defendant agreed to join the conspiracy, agreed to commit predicate acts, and knew that those acts were part of a pattern of racketeering activity.
As you can see by the above description our offices (Organizations) fall under federal Rico and the arbiter is the pattern of either real or perceived fraud.
This morning I conducted a compliance review and found the following:
- The Dr. billed a 99203, for a new patient evaluation and omitted the review of systems. This is mandatory for a 99203 and this Dr. like many others bill the insurance company for work not done. By having the patient fill out a form is not the same as you doing the work you are billing for. The question is, is a review of systems that you billed for on your E&M report?
- The treatment order omitted any form of imaging, yet x-rays were performed. In addition, the first treatment was listed on the new patient E and M report prior to any orders being executed. First visit treatments must be done subsequently to an order being written and on a SOAP note independent of the E and M report.
- Subluxation: too many doctors are including Subluxation as a clinical finding (not a compliance issue) and subluxation is a diagnostic conclusion and should not be listed in the examination component of your report.
- Range of motion devices: still many of you use either a goniometer (which is for extremities only) or an arthrodial protractor, which is been deemed unacceptable for ranges of motion for spine. According to the AMA Guides of the Evaluation of Permanent Impairment, fifth edition, page 400 only a two-piece inclinometer is acceptable for spinal ranges of motion. A good attorney will take you to task on this and if you bill independently for this service, it can be construed as fraud.
- SCDT Rule: this rule simply stands for symptom, clinical finding, diagnosis and treatment. For every body region you touch you must have a symptom, clinical finding and diagnosis. Anything short of that is considered billing fraud. This is a hard rule, non-negotiable and the # one reason for losing in audit, investigation, fraud allegation or a RICO trial. You mess this one up, be prepared to lose your entire life’s savings and/or freedom!!!!!!
All the above compliance issues are billed on a HCFA form or electronically and sent by your office to a financial institution on a regular repetitive basis. This is called a pattern of fraud by using either a paper or electronic instrument to defraud a financial institution for your personal financial gain and qualifies under federal Rico. In the past, I have been retained to defend doctors on these variations and in every case, it has been devastating to the provider when it could have been avoided by following simple rules.
Follow the rules, get paid and sleep well at night!!!
Mark Studin DC, FASBE(C), DAAPM, DAAMLP
Adjunct Associate Professor of Chiropractic, University of Bridgeport, College of Chiropractic
Adjunct Professor, Division of Clinical Sciences, Texas Chiropractic College
Educational Presenter, Accreditation Council for Continuing Medical Education Joint Partnership with the State University of New York at Buffalo, School of Medicine and Biomedical Sciences
Academy of Chiropractic
US Chiropractic Directory