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MD liability for home care & DME certifications

By Carol Loepere, Esq. & Karl Thallner, Esq.

The Office of Inspector General (OIG) of the Department of Health and Human Services recently released a Special Fraud Alert focusing on physician diligence in ordering home care and durable medical equipment (DME) provided to Medicare beneficiaries. The Fraud Alert, issued on January 7, 1999, stems from recent OIG investigations and audits of home health agencies (HHAs) and DME suppliers, but expressly acknowledges that physicians share responsibility—and potentially liability—for the appropriate provision of home care, DME and supplies.

According to a press release accompanying the Fraud Alert, Inspector General June Gibbs Brown stated that the Fraud Alert “is intended to both educate and remind physicians of their legal and programmatic significance of certifications they make” in connection with ordering home health care and DME for Medicare patients.

In the Fraud Alert, the OIG expresses concern that some physicians are inappropriately ordering home health care and DME and supplies for Medicare patients. The OIG notes that, while physician fraud in this area is “relatively infrequent, physician laxity in reviewing and completing these certifications contributes to fraudulent and abusive practices by unscrupulous suppliers and home health providers.” The Fraud Alert outlines the protocol physicians should follow for certifying the medical necessity of items and services.

The Fraud Alert also highlights the potential adverse consequences that may result when a physician improperly certifies an item or service. The OIG confirms that physicians are not personally liable for erroneous claims “due to mistakes, inadvertence, or simple negligence,” but they will face criminal, civil and administrative penalties for knowingly signing a false or misleading certification or signing it with reckless disregard for the truth.

This Fraud Alert, like others, does not create new law but sets forth the OIG’s views on physician responsibility for certifying the appropriateness of home care, signing orders for DME and completing and signing certificates of medical necessity (CMNs), as applicable. In addition, as with prior Fraud Alerts, the OIG requests that individuals contact an OIG regional office if they have information about suppliers or providers engaging in activities described in the Fraud Alert.

In the Fraud Alert, the OIG emphasizes the importance of physician certification for Medicare. Medicare relies on the professional judgment of the treating physician because he or she knows the patient’s history and makes critical decisions relating to the patient’s treatment. However, the OIG maintains that physicians sometimes fail to discharge their responsibility to assess their patients’ conditions and need for home health care. The Fraud Alert outlines the proper steps physicians should take before certifying an item or service related to home health services and DME.

Physician Certification for Home Health Services

The Fraud Alert summarizes the Medicare coverage requirements for receiving home health services. Medicare will pay a Medicare-certified HHA for home health care provided to a patient under a physician’s plan of care. As a condition for payment, Medicare requires the treating physician to certify initially and recertify at least every two months that:

• The patient is confined to the home.

• The patient needs or needed (1) intermittent skilled nursing care; (2) speech or physical therapy or speech-language pathology services; or (3) occupational therapy or a continued need for occupational therapy.

• A plan of care has been established and periodically reviewed by the physician.

• The services are (were) furnished while the patient is (was) under the physician’s care.

Furthermore, the physician must order the home health services prior to the services being furnished. The physician certification must be obtained at the time the plan of treatment is established and must be signed and dated prior to the submission of the claim to Medicare.

Physician Certification for DME, Prosthetics, Orthotics and Supplies for Home Use

Medicare will only cover DME and supplies that have been ordered or prescribed by a physician. The order or prescription must be personally signed and dated by the treating physician. As a condition for payment, DME suppliers must maintain the physician’s original written order or prescription in their files. The order or prescription must include:

• The beneficiary’s name and full address.

• The physician’s signature.

• The date the physician signed the prescription or order.

• A description of the items needed.

• The start date of the order (if appropriate).

• The diagnosis (if required by Medicare program policies) and a realistic estimate of the total length of time the equipment will be needed (in months or years).

Medicare also requires DME suppliers to submit a CMN for certain kinds of DME. The Fraud Alert generally summarizes the current rules, established by the Health Care Financing Administration (HCFA) and the Durable Medical Equipment Regional Carriers (DMERCs), establishing which sections of the CMN may be completed by the supplier, and which must be completed by the treating physician or other clinician involved in the patient’s care. With respect to each of the four sections of the CMN, the OIG provides the following instructions:

Section A contains general information on the patient, supplier and physician. Section A may be completed by the supplier.

Section B contains the medical necessity justification for DME. The supplier may not fill this out. Section B must be completed by the physician, a non-physician clinician involved in the care of the patient or a physician employee. If the physician did not personally complete Section B, the name of the person who did complete Section B and his or her title and employer must be specified.

Section C contains a description of the equipment and its cost. Section C is completed by the supplier.

Section D is the treating physician’s attestation and signature, which certifies that the physician has reviewed Sections A, B and C of the CMN and that the information in Section B is true, accurate and complete. Section D must be signed by the treating physician. Signature stamps and date stamps are not acceptable.

The OIG underscores the physician’s responsibility in reviewing and signing the CMN. By signing the CMN, according to the OIG, the physician represents that:

• He or she is the patient’s treating physician and the information regarding the physician’s address and unique physician identification number (UPIN) is correct.

• The entire CMN, including the sections filled out by the supplier, was completed prior to the physician’s signature.

• The information relating to medical necessity is true, accurate, and complete to the best of the physician’s knowledge.

Notably, the OIG does not address the propriety of cover letters sent to physicians by suppliers in connection with completing CMNs. Prior instructions from HCFA and the DMERCs indicate that cover letters are an acceptable way for suppliers to communicate with physicians. The information in the cover letter, according to these instructions, must confirm the physician’s original order, or verify changes in the patient regimen communicated by the physician to the supplier. The cover letter may also include a description of Medicare’s coverage policy for the items.

Suppliers may not, however, inappropriately influence the physician’s order by providing answers to questions on the CMN, or change the substance of the physician order without explicit, documented instructions from the physicians. In light of recent questions raised by certain DMERCs on the use of cover letters, additional clarification can be expected in the future.

The Fraud Alert provides examples of how physicians could violate these laws by:

• Signing a certification as a “courtesy” to a patient, service provider, or DME supplier when they have not first made a determination of medical necessity.

• Knowingly or recklessly signing a false or misleading certification that causes a false claim to be submitted to a Federal health care program.

• Receiving any financial benefit for signing the certification (including free or reduced rent, patient referrals, supplies, equipment or free labor).

The OIG cautions, however, that even if physicians do not receive any financial or other benefit from providers or suppliers, physicians may be liable for making false or misleading certifications.

Consequences of Improper Physician Certification

In the Fraud Alert, the OIG notes that unscrupulous suppliers and providers may “steer” physicians into signing or authorizing improper certifications of medical necessity. The OIG provides several examples of inappropriate certifications uncovered by the OIG in course of its investigations. These include instances where a physician knowingly signs a number of forms provided by a HHA that falsely represents that skilled nursing services are medically necessary in order to qualify the patient for home health services, or where a physician certifies that the patient is confined to the home even though the beneficiary tells the physician that her arthritis is limited to her hands, and she says that she has no restrictions on her routine activities, such as grocery shopping.

Another extremely dated example describes how, “at the prompting of a DME supplier” the physician signs a stack of blank CMNs for transcutaneous electrical nerve stimulators (TENS) units that are later completed by the supplier with false information. A third example involves a physician who is paid by a DME supplier from $50 to $400 for each prescription he signs for oxygen concentrators and nebulizers.

While the examples in the Fraud Alert are fairly egregious, they highlight the OIG’s concern with false certifications or situations where the HHA or supplier inappropriately (through compensation or otherwise) encourages the physician to sign certification forms where the physician has not exercised reasonable professional judgment in determining whether the patient, in fact, qualifies for the applicable item or service. In short, even though a physician’s signature on a false or misleading certification made through mistake, negligence or inadvertence will not result in personal liability, the OIG observes that the physician may unwittingly aid the supplier in perpetrating Medicare fraud.

By contrast, the OIG makes clear that a physician who knowingly signs a false or misleading certification or signs it with reckless disregard for the truth can face serious criminal, civil and administrative penalties including:

• Criminal prosecution.

• Fines up to $10,000 per false claim plus treble damages.

• Administrative sanctions including: (1) exclusion from participation in federal health care programs; (2) withholding or recovery of payments; and (3) loss of license or disciplinary actions by state regulatory agencies.

Particularly in the face of increased focus on physician certification for home care and DME, physicians should evaluate the relationships that they have with HHAs and DME suppliers, and the procedures that they follow when certifying the necessity for home care or DME.

Carol Loepere, Esq., and Karl Thallner, Esq., are partners in the Health Care Group of Reed Smith Shaw & McClay LLP. Carol practices in the firm’s Washington, DC office, and Karl heads the health law practice in its Philadelphia office.

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