For addiction clinics that serve military officers, enlisted personnel, veterans, and their families, maintaining compliance with the stringent Tricare billing regulations is of utmost importance. Intentional and unintentional billing violations can lead to allegations of Tricare fraud; and, under the False Claims Act, addiction clinics accused of Tricare fraud can face civil or criminal prosecution.
So, what constitutes Tricare fraud? When are addiction clinics (and their owners) at risk for prosecution under the False Claims Act? Here is what you need to know:
What Constitutes Tricare Fraud?
Unfortunately, there is no single or simple definition of what constitutes Tricare fraud. Addiction clinics (and all other Tricare-participating health care providers) are required to comply with the Tricare billing regulations, and any violation of these regulations can be labeled as a “fraudulent” practice. If there is evidence (typically billing data) to suggest that an addiction clinic has overbilled Tricare, then there is a very high likelihood that the clinic will face an investigation and possible prosecution for Tricare fraud.
Even for addiction clinics that are committed to compliance, there are a number of ways that Tricare billing violations can occur. Some of the most-common issues (and those that are most likely to lead to federal scrutiny) include:
1. Billing for Medically-Unnecessary Services or Medications
Like all federal health care benefit programs, Tricare only covers services and medications that qualify as “medically necessary” under the program guidelines. What constitutes a medically-necessary service or medication for purposes of billing Tricare may not necessary comport with a doctor’s independent medical judgment based upon a patient’s particular diagnosis and treatment needs, and this can create challenges for addiction clinics in particular. Under the Tricare billing guidelines, covered addiction treatment services include:
- Emergency and non-emergency inpatient services
- Intensive outpatient programs
- Management of withdrawal symptoms (detoxification)
- Medication assisted treatment
- Mental health therapeutic services
- Office-based opioid treatment
- Opioid treatment programs
- Partial hospitalization programs
- Residential substance use disorder treatment
Addiction clinics use of medications in connection with substance disorder treatment will often raise questions of medical necessity as well. This is particularly true with regard to opioid medications, such as buprenorphine, which are facing enhanced scrutiny as the federal government combats the nation’s opioid epidemic.
2. Billing for “Unproven Methods” of Substance Abuse Treatment
Tricare does not cover any substance abuse treatment methods that are “unproven,” meaning that there is not (reliable evidence) (as determined by Tricare) to demonstrate their medical effectiveness. Unproven treatment methods including aversion therapy do not meet the standard for medical necessity, and as a result they are not eligible for Tricare reimbursement under any circumstances.
3. Administrative Recordkeeping, Billing, and Coding Errors
Administrative recordkeeping, billing, and coding errors are easily among the most-prevalent forms of Tricare fraud. While most investigations targeting these types of mistakes will be civil in nature, if there is any indication that a coding error or the submission of an inaccurate patient record was intentional, then criminal charges are a very real possibility.
Recordkeeping, billing, and coding errors can take a variety of different forms, with some of the most-common allegations including:
- Failing to generate and maintain appropriate patient records to substantiate Tricare billings
- Submitting an incorrect or outdated billing code
- Unbundling services and billing at their individual rates
- Upcoding addiction treatment services in order to receive a higher reimbursement
- Billing for a high volume of the same or similar services (which federal authorities often view as a red flag for lack of medical necessity)
4. Non-Compliant Medical Directorships
When engaging medical directors, addiction clinics must be extremely careful to avoid structuring their medical directors compensation in such a way that the relationship raises questions under the federal Anti-Kickback Statute. The Anti-Kickback Statute prohibits the payment of referral fees and other forms of “remuneration” in relation to Tricare beneficiary referrals, and it imposes criminal penalties for intentional violations. Unlawful compensation arrangements can give rise to False Claims Act liability as well.
5. Unlawful Referral Fees and Other Volume-Based Compensation Arrangements
Contractual and non-contractual relationships with marketers, pharmaceutical companies, durable medical equipment (DME) companies, testing laboratories, and other health care providers and entities can have Tricare fraud implications as well. Payment of referral fees, acceptance of referral fees, payment of volume-based compensation, and various other types of transactions and relationships are all prohibited in relation to the treatment of Tricare beneficiaries.
How Does the False Claims Act Apply to Tricare Addiction Clinics?
In most cases, Tricare fraud investigations will involve allegations under the False Claims Act, often in addition to allegations under the Anti-Kickback Statute and a variety of other federal laws. Under the False Claims Act, the submission of any inaccurate billing request to Tricare carries the potential for civil or criminal prosecution. For example, 18 U.S.C. § 287, the main criminal provision of the False Claims Act that applies to addiction clinics and other health care providers, states:
“Whoever makes or presents to . . . department or agency [of the United States], any claim upon or against the United States, or any department or agency thereof, knowing such claim to be false, fictitious, or fraudulent, shall be imprisoned not more than five years and shall be subject to a fine in the amount provided in this title.”
One key aspect of the False Claims Act is that it imposes penalties on a “per claim” basis. This is true under both the civil and criminal provisions of the statute. With each individual billing request constituting a separate “claim” addiction clinics accused of fraudulently billing Tricare will often be at risk for substantial, and potentially even business-threatening, penalties.
What are the Penalties for Tricare Fraud Under the False Claims Act?
When assessing an addiction clinic’s potential exposure under the False Claims Act, it is first necessary to determine whether the government’s investigation is civil or criminal in nature. As noted above, the False Claims Act includes provisions for both civil and criminal penalties, with the distinguishing factor being the involved individuals subjective intent. Although unintentionally overbilling Tricare is not a crime, it is still a federal offense. If there is evidence of intent, then the clinic’s owners and any other personnel implicated by the allegations will be at risk for criminal prosecution.
The civil penalties for Tricare fraud under the False Claims Act include recoupments, fines, treble (triple) damages, and attorneys fees payable to the U.S. government. As quoted above, criminal penalties include fines and up to five years of federal imprisonment for each separate billing offense. In both civil and criminal cases, an unfavorable result at trial can also result in exclusion from Tricare.
How Can Addiction Clinics Avoid Allegations of Tricare Fraud?
In order to mitigate the risk of being targeted in a Tricare fraud audit or investigation, addiction clinics must adopt comprehensive compliance programs focused specifically on the requirements of the Tricare billing regulations and the False Claims Act. These compliance programs must be custom-tailored to the scope of each clinic’s practice and the nature of its operations, and they must be designed to comprehensively address all of the issues that have the potential to result in Tricare billing mistakes and violations. Some of the fundamental components of a comprehensive Tricare compliance program include:
- Written policies, procedures, and standards of conduct Clear and comprehensive documentation of the steps all addiction clinic personnel must take to maintain compliance.
- Third-party agreements Compliant contracts with appropriately-structured compensation arrangements.
- Employment records and documentation Proper classification of employees and independent contractors, and maintenance of appropriate employment records.
- Compliance officer and committee Designation of personnel responsible for ensuring Tricare compliance on an ongoing basis and addressing potential billing issues as they arise.
- Training and education Clinic-wide training and education focused on implementing the addiction clinic’s written policies, procedures, and standards of conduct.
- Patient-focused care Addiction treatment services focused on patients needs while acknowledging and addressing the limitations of Tricare’s definition of medical necessity.
- Recordkeeping and documentation of compliance Adequate recordkeeping to demonstrate medical necessity and substantiate all Tricare billings.
- Reporting channels for addiction clinic personnel Providing clinic personnel with channels for confidentially reporting suspected Tricare billing violations.
- Monitoring and auditing Active and ongoing monitoring of the addiction clinic’s Tricare compliance efforts.
- Remedial response and compliance defense Documented procedures for addressing potential Tricare billing violations and responding immediately in the event of a Tricare audit or investigation.
Not only will adopting a comprehensive Tricare compliance program help prevent billing violations with False Claims Act implications, but it will also provide a first line of defense if auditors or federal agents lodge accusations of Tricare fraud. With the potential for business-threatening and life-altering penalties, addiction clinics and their owners must devote adequate time and resources to avoiding Tricare billing mistakes.
Speak with a Tricare Defense Lawyer at Oberheiden, P.C.
At Oberheiden, P.C., our experienced Tricare lawyers represent addiction clinics across the country with respect to proactive compliance and Tricare fraud defense. If you have questions and would like to speak with an attorney, you can call 888-519-4897 or contact us online for a complimentary initial consultation.
Dr. Nick Oberheiden is a national litigation and trial criminal defense attorney who practices exclusively in the area of federal law.