Potential Liability of Billing Consultants for Medicare Fraud

The False Claims Act (FCA) makes it illegal not just to submit but also “cause the submission” of a false claim to Medicare or another federal government agency or program. This seemingly innocuous phrase gives the law surprisingly long tentacles. On Feb. 14, a Florida Medicare consultant and the billing firm he owns found that out the hard way.

The Grapevine Settlement

The protagonists in the case were Medicare reimbursement consultant Ted Albin and his wholly-owned consulting and billing firm Grapevine Billing and Consulting Services Inc. and the advice it rendered to now-defunct diabetic testing supplier Arriva Medical LLC and its parent Alere Inc. The case began when a former Arriva employee brought a qui tam suit against Arriva and Alere for falsely billing Medicare for diabetic testing supplies. The reason the claims were false was that Medicare beneficiaries were paid kickbacks to receive the services in the form of free glucometers and routine waivers of their required copayments. From analyzing Grapevine’s financial disclosures, government investigators found evidence that Grapevine and Albin were mixed up in the scheme. According to the Department of Justice, they effectively acted as the head of Arriva’s reimbursement operation, developing policies for the collection of beneficiary copayment obligations and submitting Medicare claims for diabetic testing supplies. Albin would later admit as much in sworn testimony stating that he would personally “write off customer co-payments every week.” These admissions might have been why Albin and Grapevine had to pay only $50,000 to settle the allegations.

The OIG Special Advisory Bulletin

The case illustrates that billing consultants who cause their clients to submit false claims to Medicare run the risk of liability under the FCA. “Consultants must abide by federal requirements when providing Medicare billing advice,” noted Acting Assistant Attorney General Brian M. Boynton for the Justice Department’s Civil Division in the press release announcing the settlement. This is hardly the first time that federal enforcers have sent that message. In June 2001, the OIG issued a Special Advisory Bulletin on the practices of business consultants. “Responsible consultants play an integral role in developing and maintaining practices that enhance a client’s business objectives, as well as in improving the overall integrity of the health care system,” the agency notes. And while acknowledging that the “vast majority” of consultants are honest, the agency calls out “a small minority of unscrupulous consultants that engage in improper practices or encourage abuse of the Medicare and Medicaid program,” putting both themselves and their clients at risk of liability.

4 Questionable Consultant Practices to Watch Out For

The advisory also describes the kinds of “questionable practices” that consultants and their clients need to guard against, including:

• Making illegal or misleading statements or representations about their relationship with Medicare, such as by claiming that they have inside or special access to CMS or the OIG;
• Making express or implicit promises or guarantees of specific results that are unreasonable or improbable, such as where a billing consultant promises a prospective client that its advice or services will produce a specific dollar or percentage increase in the client’s Medicare reimbursement;
• Knowingly encouraging clients to engage in Medicare abuse, like Grapevine allegedly did in promoting Arriva’s practice of routinely waiving Medicare beneficiary copayments; and
• Making blanket statements discouraging clients from performing retrospective billing reviews, cooperating with payor audits, and engaging in other compliance efforts. (The operative part is “blanket statements”; thus, it might be perfectly legitimate for a consultant to advise a client to refrain from such activities in certain circumstances).