Insurance Fraud: Are You Guilty? – Part 2

In the last edition, I explored the issue of insurance fraud in Dental Sleep Medicine and the response has been enthusiastic, as anticipated. While I am aware that insurance audits and inspections in dentistry have been rare, it is my personal opinion that this may change in the near future as more and more dentists are filing Medical Insurance and Medicare. Additionally, medical billing services are flourishing in DSM. Unfortunately, some of the medical insurance billing services do not seem to know the law or have chosen to ignore state and federal regulations. These billing companies have an obvious conflict of interest with an incentive to over-bill for services. Dental sleep practices frequently are encouraged by their billing service to overcharge for Oral Appliance Therapy and waive co-payments and deductibles, creating an obvious area of potential liability. Waiving deductibles and co-payments could ultimately result in audits by medical insurance companies and visits from the FBI.
In the dental arena, risk management typically addresses negligent conduct that breaches the standard of care and results in an injury to our patients. A ruling of negligence results in monetary damages. Insurance fraud and abuse is a criminal offense if a prosecutor can prove that you intentionally conspired to receive a payment that you were not entitled to. If the prosecutor can prove fraud you could go to prison.
If you are suspected of Medicare fraud or abuse, the FBI will show up at your office with a search warrant. The warrant will list the items of equipment and documents that the searching officers have the legal right to confiscate. Obviously, computers and patient records are frequently on the list.
If you are suspected of Medical insurance fraud, an insurance auditor will show up at your office and set up shop for an extended period of time until he is satisfied that he has accessed and evaluated all patient records in question. Sadly, it is not uncommon for insurance auditors to stretch their authority and request records that they have no legal right to access.
With the possibility of audits on the horizon, here are some steps a dental practitioner should take if FBI agents or auditors show up at your front desk with a search warrant. Please save this copy of DSP in case you ever find yourself confronted with this scenario.
Once the FBI Officers or Medical Insurance Auditors have presented themselves:
1. Call your attorney immediately and don’t let your staff talk to the invaders: You should inform the officers and auditors conducting the search that you would like them to wait for your attorney to arrive before the inspection or audit begins. Insurance fraud is a criminal offense and you have a constitutional right to have legal counsel. If your attorney does not have the necessary criminal law expertise to advise you how to proceed, you should contact an attorney with that expertise. It is absolutely imperative that this be done immediately. You should be aware that the officers do not have to wait for your attorney to arrive. They have the legal right to go ahead and begin the search but get an attorney to assist you as soon as possible. Additionally, do not allow your staff to be questioned without legal counsel present. Inform your staff members that nothing is to be gained by talking to the FBI Agents or the Auditors. They are not your friends. If the officers refuse to wait until counsel arrives, you and your employees have the right to refuse to be questioned and the right to invoke the Fifth Amendment.
2. The Search Warrant will list the items and areas the officers can search and equipment or documents that can be confiscated: Federal Rules of Criminal Procedure require that the officers or auditors must provide you with a copy of the search warrant which must specifically describe the premises to be searched and the documents or items to be seized. They are not authorized to search any premises or property not specifically described in the warrant. They have the right to take what’s listed on the search warrant. It is imperative that you know what is being removed from your office.
3. Assign a staff member to create a list of all documents or items being removed from your office. Although the Federal Rules require that the officers conducting the search prepare and provide a written inventory, they are often uninformative, non-specific and never clearly identify what items have been seized. You, or someone on your staff, should make your own inventory or itemized list of records this should include sufficient detail to enable you and your attorney to know exactly what has been taken.
4. Be ready with great backups: The question that everyone wants to know is; “Can they really take my computers?” The short answer is “Yes!” However, it is reasonable for your attorney to insist on getting a backup of your system before it is taken. As always a reasonable precaution is to have a good backup of your systems at all times.
5. Be nice, be polite, remain calm and cooperative, but use your smart phone to record the entire search: Do not verbally or physically make any attempt to prevent or hinder the officers during the search. At the same time do not volunteer information. Indicate to the officers that you do wish to cooperate with them. However, do not HELP them. You do not have to assist them during their search. If you are polite, calm and cooperative, the officers are more likely to honor any requests that you make with regard to inventories of the property. Be courteous and professional at all times. Photos or video recordings of items and documents seized are an extremely helpful addition to any written inventory that you have made with regard to the items. This information could be vital in recovering your documents. Additionally, video or photographic evidence of the conduct of the officers conducting the search may be helpful at a suppression hearing should your attorney be attempting to suppress the search for the reason that it violated your privacy rights or the warrant’s limited scope.
Being confronted with a “surprise” federal investigation can be a very disturbing and frightening experience. While it is unlikely that an FBI agent will show up with a search warrant, the fact remains that these types of medical fraud investigations are likely to increase in DSM in the near future. As stated earlier, keep a copy of this article in an accessible place. Plan an office meeting with your staff to discuss the contents of this article. Being prepared is always a great approach. Try to schedule a local attorney who has experience in this area of law to do a lunch and learn. Make sure each of your staff members understands what they should and should not do in the event of an FBI search or Medical Insurance audit.
Prevention is always the best strategy. An insurance audit or an FBI surprise search will only occur if you are consistently abusing or defrauding Medicare or commercial insurance carriers. All Dental Sleep Medicine practitioners should review their office insurance procedures to be sure they are compliant with federal and state law. Remember that auditors don’t show up for an audit unless they are certain you are violating the law. If you are unsure if a billing practice is legal, call your attorney for their opinion. Laws vary from state to state. If a billing service is filing your insurance claims be aware that they are acting as your agent and you will be responsible for any claims filed on your behalf. Don’t let your billing service cause you to be found guilty of Medicare Fraud or Medical Insurance Fraud.
In the next issue of Dental Sleep Practice, I will discuss possible consequences and penalties which could be imposed if you were found guilty of Medical Insurance Fraud or Medicare Fraud.

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