Academy of Chiropractic’s

Lawyers PI Program

#236

 From the Desk of:

 Mark Studin DC, FASBE (C), DAAPM, DAAMLP


"Fraud Undone
"

I know this is a long and sometimnes tedious process... BUT... the more you know.. the more successful you will be... keep reading and call me if you need help!!!


I received an encouraging, yet disturbing phone call last week. A doctor who I have been talking to repeatedly over the last few weeks constantly left me with a very bad feeling because of his total lack of direction, so I confronted him on "things he might have possibly done that caused him to lose lots of sleep." After a few brief seconds, he confessed that another consultant shared with him that personal injury carriers often delay payment for too long. Therefore, it would be in his best interest to inflate the bills to offset the lag in payment (or something like that).

My answer was, "Oh boy...We have work to do to undo this unless you do not want to." Before I allowed him to answer the question, I shared this story with him. 15 years ago, I dispensed molded back supports in my office to patients. The law in New York at that time said that the provider could bill 150% of the invoice price and although I knew it wouldn't make me much money as my cost was $34, it was a valuable service for my patients and I wasn't losing money. Over 6-7 months, we dispensed approximately 200 supports and all was going well. At that time, I wasn't too interested in having control of my office, so I looked at my statistics only once every 6months. If money and patients were coming in, I was happy; stupid, but happy.

When I went and looked at the statistics for the last 6 months, I noticed there was a $38,000+ collection for molded supports. I inquired of my billing person, Diane, what was going on. She told me that every week the supplier would drop off the supports through the back door and give her a bill. I asked to see the bill and to my SHOCK, it was for $387.00, when in reality I only paid $34 for the support. He mailed me the actual bill that I paid without knowing what he was doing. I called a colleague who referred the supplier to me and he said, "Yeah, I know. Isn't it great?"

After my bowels turned to water and I terminated the relationship with the supplier, I called my accountant, Uncle Marvin at the time, who immediately drove out and we did a forensic analysis of the billing and collections for the previous 6 months. I realized that I had collected over $30,000 through fraudulent billing practices and whether it was inadvertent or intentional doesn't matter...It was fraud no matter how you looked at it. I called my health care lawyer for guidance and wrote the insurance carriers, all of them, a letter explaining that an internal audit revealed a billing error and that we were submitting a corrected invoice with a refund for the difference we were not entitled to.

The checks totaled the $30,000 overbilled and collected and I couldn't wait to mail them. I can honestly say for the next 6 months, I awaited the phone call or letter informing me of the investigation into my fraudulent activities, but it never came. I still have the copies of the letters and the checks in my file cabinet.

I spoke to the doctor who referred the supplier to my office and asked him about any negative sequellae from his activities and he refused to talk to me about it as did another doctor who I found out did the same thing. I heard that both were investigated and had significant legal issues, but couldn't verify what. I only know that I never heard a word from anyone because it is always about the money and I returned it to the carriers because it wasn't mine.

Coming back to today, I told the doctor to audit his practice and any billing that was done for services not rendered. He is to create a spreadsheet outlining what was paid for and not done and what was billed for in error and not yet paid. Anything paid should be refunded immediately. Anything billed but not paid should be sent in an amended HCFA.

All of the above must be sent to the carriers with a letter fo explanation and simultaneously with a refund check "IN FULL." There is no grey area here. The money must be refunded immediately and if need be, he will have to borrow the money to do it. It is cheaper than going to jail. I also strongly urged him to call his health care lawyer to confirm the language in the letter.

Remember, the SYSTEM is very sophisticated and very smart and it is only a matter of time until a fradulent doctor is caught. The jails are full of very smart doctors who have devised a scheme to beat the system. People make a living out of finding them. Therefore, they are highly motivated.

Here is a sample letter should you find a billing inconsistency, whether inadvertently or intentionally:

 

The following sample letter has to be created and customized for every carrier you billed erroneously.
 

TO: AllFarm Insurance Company
RE: Internal Audit
An internal audit found billing errors from my office and I am both alerting you to the mistake and enclosing reimbursement for services paid, but not performed.

Name

Date of Service

CPT

Amount Billed

Amount Collected

Amount Refunded

Mary Jones

10/1/2011

97035

$ 50.00

$ 50.00

$ 50.00

Mary Jones

10/2/2011

97035

$ 50.00

$ 50.00

$ 50.00

Mary Jones

10/3/2011

97035

$ 50.00

$ 50.00

$ 50.00

Mary Jones

10/4/2011

97035

$ 50.00

$ 50.00

$ 50.00

Mary Jones

10/5/2011

97035

$ 50.00

$ 50.00

$ 50.00

John Smith

10/1/2011

97035

$ 50.00

$ 50.00

$ 50.00

John Smith

10/2/2011

97035

$ 50.00

$ 50.00

$ 50.00

John Smith

10/3/2011

97035

$ 50.00

$ 50.00

$ 50.00

John Smith

10/4/2011

97035

$ 50.00

$ 50.00

$ 50.00

Harry Sinclair

9/20/2011

97035

$ 50.00

$ 50.00

$ 50.00

Harry Sinclair

9/21/2011

97035

$ 50.00

$ 50.00

$ 50.00

Harry Sinclair

9/22/2011

97035

$ 50.00

$ 50.00

$ 50.00

Harry Sinclair

9/23/2011

97035

$ 50.00

$ 50.00

$ 50.00

Harry Sinclair

9/24/2011

97035

$ 50.00

$ 50.00

$ 50.00

 

 

 

 

 

 

Total Refund Attached

 

 

 

 

$ 700.00


Also attached are amended HCFA forms reflecting the correct billing for services not paid. The billing error was an internal problem that was found and rectified ranging from 9/20/2011 through 10/20/2011.

Should you have any questions, please do not hesitate to contact me.

Sincerely, 
 


Once the problem is rectified and transparency is created, there should be no further need for an investigation because all the carriers want is to know what has transpired. With the information, there is nothing for them to figure out. At the end of the day....sleep well!