The healthcare industry is seeing an uptick in lawsuits focused on the misuse of Medicare and Medicaid funds, especially in the wake of the COVID-19 pandemic and CMS’s subsequent updates of the self-referral and anti-kickback Stark Laws.
Some misuse is the result of fraudulent activity, while other activities are more innocuous. Regardless of intent, an offense will still put your organization and its owners, administrators and related parties at risk of non-compliance, repayment of funds, low Medicaid scores and other reputational damage.
In New York State, recent lawsuits have included:
- A nursing home on Long Island accused of “persistent and systemic prioritization of their personal profit over the people in their care.” Among other offenses, the Attorney General cited staffing shortages and misallocated wages paid to the owner’s adult children.
- A 120-bed facility in upstate New York accused of siphoning over $18 million in government funds while residents were left in “inhumane” conditions. Offenses included hiring unqualified staff, inflated rent payments to a company they owned, and exorbitant administrative fees to a third party.
While these examples are clear violations, less obvious risks can be lurking in any healthcare facility – and not only in nursing homes. A recent opinion from the Office of the Inspector General indicated that remuneration from a testing lab to a hospital or provider on a per-test or per-patient basis would violate the anti-kickback statute.
Other arrangements that are prone to unintentional misuse of CMS funds are physician agreements, nursing home management and vendor relationships, non-licensed provider-owned facilities, healthcare franchises and nonprofit affiliates.
Keep your organization out of the headlines.
Fortunately, the right strategies and tools can mitigate the risk of unknowingly violating Stark Laws and other CMS compliance requirements. Two of the most important variables to consider are fair market value and commercial reasonableness.
Listen in and learn how you can keep your organization in compliance and out of the headlines. Click here to access a recording of our Healthcare Leaders Live Video Session, Preventing Unintentional Misuse of Medicare and Medicaid Funds. For more information, please contact Joseph Tomaino, CEO of Grassi Healthcare Advisors.
