By Kenneth Joel Haber

Mr. Haber is a former Assistant United States Attorney [1971-1979 E.D. MI] and former Senior Attorney Office of Inspector General United States Department of Health and Human Services [1979-1983]. He found this firm in 1984.

One of the cardinal rules which this writer learned as a Federal Prosecutor was that if it sounds too good to be true, it probably is. Conscientious doctors who desire to render services to their patients can be subjected by insurance companies to harassment and civil prosecution (leading to criminal prosecution) for unorthodox approaches to the practice of medicine, due to ill advised leasing of and/or involvement with diagnostic equipment and related staff. They might be referred to their medical licensing boards. Additionally, they can also be the subject of law suits (i.e., Whistle Blower Suits) by employees of their own or employees of others.  Practicing medicine has become a minefield. What looks good today can become your albatross tomorrow.  Some services, with which a physician might become involved with, are legitimate and some are illegitimate. The physician has to determine which is which. That is the difficulty, for the old cliché’ is true: “the road to hell is paved with good intentions.”  The best protection a conscientious physician can afford himself and his practice is to institute a strong compliance program to detect and avoid these problems. The same compliance program establishes proper, innocent intent when errors occur and improper schemes slip inadvertently through.

In the matter of State of Illinois ex rel. Scott Schichtl v. ZT Technical Services, Inc.,Veridian Health, LLC, et al, ZT Technical Services and related defendants were charged in a whistle blower suit with various violations of state law under Illinois statutes and subsequently under California statutes. They leased testing devices to non-Neurologist physicians and supplied technicians to undertake the testing procedures and had a Board Certified Neurologist in Florida available to read the testing results. It sounds perfect for the conscientious doctors, who wanted to procure tests to guide and justify treatment for their patients who were suffering from automobile and other injuries.  You can be sure that the relevant automobile insurance companies who are suppose to pay for the procedures, knowing that often these same procedures justify higher awards against them, are not happy with them. They have paid investigators who target the doctors and either sue them or drag them before the respective states licensing boards. At times, in cases similar to this one, they even attempt to obtain prosecution of the beleaguered physicians.  Internet and telemedicine is a growing field and at times, quite legitimate. However, with cases similar to ZT, manufacturers or distributors of devices might attempt too much, using too little QA to ensure compliance, or they just might not care. In any event, this type of entity and many of their client doctors get into a great deal of difficulties for their efforts. 

According to the complaint, ZT Technical Services, Inc./Veridian Health, LLC employed technicians to travel to doctor’s offices and perform nerve conduction tests. The neurologist in Florida was to read them. This possibly could have been done correctly, but in this case, the relevant insurance company charged that it was not. This scheme adversely affected numerous medical doctors and related workers. The suit charged:

• VeridianHealth billed insurers for tests that were medically unnecessary and improperly performed and that they systematically billed for tests they did not even perform. Since 2002, the largest percentage of Veridian’s billings was for a needle electromyography (“needle EMG”), which Veridian admitted it had never performed. This “phantom test” was a greater source of revenue for defendants than the tests that were really performed. With no costs associated with it.
• The referring physicians were not trained or qualified to administer or supervise the tests.
• Veridian routinely caused unnecessary tests to be performed. Unlicensed, unqualified technicians administered predetermined batteries of tests on every patient. Instead of performing an appropriately tailored sets of tests, VeridianHealth gave the referring physicians only three choices for testing, regardless of the patient’s medical needs: an “upper profile,” a “lower profile,” or both.
• Each testing profile involved repeated shocks or stimulations of multiple nerves in each arm and/or leg, whether or not required. The technicians routinely performed unnecessary diagnostic tests. In addition, most of the tests failed to produce clinically acceptable results, in accordance with appropriate medical standards.
• As part of the scheme, victim doctors were told that off-site neurologists on VeridianHealth’s payroll read and interpret the tests. These tasks were not done properly, assuming that they could have been done at all. Yet, VeridianHealth billed insurers over $10,000 for an upper and lower profile. This is 3 to 10 times more than what a qualified provider, who meets face to face with the patient, would normally bill for tests properly administered.
• Veridan Health neurologists’ reports were generally vague and had little diagnostic value.
• The scheme was designed to avoid raising “red flags” with insurance companies, and staff taught participating doctors how to avoid raising “red flags.”
• VeridianHealth marketed itself—substantially to DCs—by emphasizing that the DCs would be able, instead of referring patients to neurologists and losing business, to keep the patients in-office and have Veridian do the tests done on-site.

This scheme is not healthy for the participating victim doctor’s professional careers. It leads to a shortened professional life time or other grave difficulties. Just as toxic waste can terminate your life, toxic professional practices can lead to an early termination of your career.

Relying upon the wrong support instructors can be dangerous as well. The suit charged that Beakthrough Coaching, which teaches chiropractors how to build their practices, was paid to recruit participants from among their clientele for the illegal scheme.  That made the doctors double duped for they paid for their coaching which often got them into difficulties with the authorities.

Another example of physicians becoming ill involved in diagnostic testing to their great detriment is reflected in a suit filed in 2006. The suit was against an MRI Scanning Center. The physicians who relied upon the provider were misadvised and led to the slaughter. The suit was entitled People of the State of Illinois, ex rel. John Donaldson v. Midi LLC, et. alia. This suit charged a traditional kickback scheme to referring physicians. Whistles and bells were played to provide the physicians with psychological cover but the cover did them no good.  The physicians allegedly made referrals and did nothing else of value. Insurance claims were prepared by the MRI Scanning Center in the physicians’ names and the physicians were compensated. This type of situation can lead to significant costs and injuries to the physicians and their careers as well as problems with their licensing authorities. Again the case was brought by a citizen with inside information on behalf of the government. If these particular physicians established and used a good compliance program, their greed might have been placed in check. Unfortunately, most greedy physicians will not implement a compliance program for they fear that it will cost them money and impede making money. This is actually quite the contrary. A good compliance program will show them how to properly maximize their billings with proper documentation and help them avoid costly problems.

 In the case involving the device manufacturer Medtronic, a former company employee who was an attorney brought an action under the Federal False Claims Act. The 2002 suit of US Ex Rel. Ami P. Kelly v. Medtronic resulted in a settlement with the company and the federal government in the amount of $40 million dollars. Thereafter, the attorney filed suit against numerous doctors for violations of the act. Surgeons and other doctors were alleged to have been paid consulting fees to use the company’s products. Furthermore, it was alleged that Medtronic provided “regular entertainment” at a Memphis strip club called Platinum Plus. The club closed last year after the owner pled guilty to charges that dancers were engaging in prostitution at the club. It was also alleged that doctors were taken on extravagant all-expenses paid fishing trips to Alaska that were described as “think tank” trips. However, according to the complaint, “drinking” replaced “thinking” on these trips. It was further alleged that doctors were allowed to share in the patent royalties of products in which they had not contributed any input, they were issued credit cards, and were paid for “consulting” work in which no “consulting” was ever done. Additionally, it was alleged that the company paid for fishing guides and clothing for the doctors.

That is the most extreme, but the rule is that if it sounds too good to be true, it probably is. What must a doctor do to avoid unfortunate entanglements with the law? The answer is to set up a compliance program and document all of your efforts to do what is proper in your business dealings. It can actually make many practices legitimate, extra money which they were unaware of. Find an experienced law firm to give you counsel as to these efforts and your potential business relationships, as well as your general operations. Have that advice documented in writing and follow it. This firm has itself prevented numerous physicians over the years from falling into pits of problems.  Don’t let these tragedies befall your practice. Have a compliance program and obtain experienced counsel to guide you.

Haberslaw seeks to keep physicians and other healthcare providers informed of the current topics in today’s medicine, including the CMS’ & the OIG’s provisions concerning fraud detection. You do not want to be subject to recoupment of payments for legitimately rendered services due to technical errors that are not of substance nor be charged with fraud and have to defend yourself in a criminal forum. If you need more specific information concerning this topic or the implications of this article, the staff of haberslaw is available for a no obligation initial consultation at 301-670-0016. Do not get caught inadvertently in the CMS’s contractor review processes that systematic impose costly recoupment due to technical billing errors. Contact Haberslaw and find out how you may initiate a low cost compliance program to safeguard your practice and even enhance your billings. From a billing error, you can be referred to the OIG’s, FBI’s, CMS’, DOJ’s HEAT Strike Force net. If any of these agencies or a CMS contractor contacts you, you should contact a competent law firm of your choice. It does not matter if you are innocent. What matters is if you can prove that you are innocent. It does not matter if you billed for services actually rendered. What matters is if you have properly document for the services. We have been involved in these issues many times over the years. Also, we can assist with Defensive Medicine, Fraud Avoidance, Medicare as well as many other issues so as to avoid problems. Additional topical information of the day is available on the E-education page at www.haberslaw.com Please feel free to contact us for a no obligation initial consultation.