A doctor who took kickbacks from a Pennsylvania hospice involved in a multimillion-dollar fraud. An Ohio psychiatrist who billed for treating no-show patients. A Georgia optometrist who claimed he conducted 177 eye exams in one day.
Their transgressions vary. What these doctors have in common is that each was paid by a state Medicaid health insurance program after being kicked out of another state's Medicaid system or the federal Medicare program.
That's not supposed to happen. The Affordable Care Act, or Obamacare as it is popularly known, explicitly requires that states suspend the billing privileges of most providers who have been "terminated" or "revoked" by another state or Medicare.
But in an exclusive analysis of state and federal data, Reuters found that more than one in five of the thousands of doctors and other healthcare providers in the U.S. prohibited from billing Medicare are still able to bill state Medicaid programs.
In all, Reuters found 1,800 banned providers that were still able to bill elsewhere on a given date in 2014. The figures almost certainly underestimate the phenomenon by thousands of providers because of inadequate state and federal data.
After reviewing Reuters' list of revoked providers, 17 state Medicaid programs terminated, attempted to recoup money from or launched investigations of 67 of the providers. Based on incomplete data from most of those states, the providers had been paid a combined total of at least $874,000 while revoked.
More broadly, 32 states and the District of Columbia supplied data showing they paid at least $79 million to 269 of the 1,800 providers after their terminations elsewhere. But the data was incomplete. Extrapolating from what could be verified, Medicaid payments to banned providers could easily reach into the hundreds of millions of dollars.
The problem has taken on added urgency since the 2010 passage of the Affordable Care Act. That sweeping overhaul of the U.S. healthcare system is counting on a reduction in fraud and abuse to help pay for an $800 billion expansion of Medicaid - and to ensure that those additional dollars don't go to the wrong people.
To that end, the act required the federal Centers for Medicare and Medicaid Services (CMS) to set up a data-sharing system that would allow states to identify providers terminated in other states or by Medicare. In the past, only a few states maintained such lists.
But the data-sharing system is deeply flawed. Banned providers can slip through the cracks because of missing or erroneous data. Others remain unrecorded because of state laws that don't square with federal requirements or because of different interpretations of language in the Affordable Care Act.
Responding to Reuters' findings, CMS officials said the data on revoked providers could be misleading. They noted that under federal law, states aren't required to terminate all revoked providers.
Still, CMS officials acknowledged that providers revoked under federal law "for cause" - for fraud or issues of quality and integrity - sometimes continue to bill state Medicaid programs when they shouldn't. Deputy Administrator Shantanu Agrawal said the agency was working to improve the system.
"If there are bad actors who are not following the rules, we want these actors to be revoked across all Medicaid programs," Agrawal said.
Officials in Minnesota, responding to the Reuters analysis, are attempting to retrieve $548,000 from five providers who were paid after their Medicare revocations. Nevada officials are attempting to recoup $250,000.
Georgia's health department terminated optometrist Dr. Jeffrey Sponseller on Feb. 20, 2013, the same day he pleaded guilty to Medicare fraud. He claimed that in a single day, he conducted 177 eye exams that would have taken 132 hours to perform.
Sponseller remained on South Carolina's Medicaid rolls for almost a year afterward, until Reuters asked about him.
"If you hadn't brought this to our attention, we don't know when we would have known about this," said Kim Cox, director of communications for the South Carolina Department of Health and Human Services. South Carolina has not attempted to recoup the money.
Sponseller, now serving a 33-month sentence in federal prison, was unavailable for comment.
Data input errors allowed Yevgeniy Goldman, a Philadelphia doctor, to remain approved to bill Pennsylvania's Medicaid program even while serving a 51-month prison sentence for taking $263,000 in illegal payments for patient referrals to a home hospice company.
CMS said he was able to do that because of a mistake in the report the agency provides to states. CMS fixed the error after Reuters inquired about Goldman in October 2014. Pennsylvania paid $17,000 for services provided by Goldman after his guilty verdict - but before he began serving time.
Goldman's lawyer, Christopher Lewis, said that his client is appealing the conviction and that all the services he prescribed were medically necessary.
Muhammad Choudhry came to the attention of investigators for the Ohio Bureau of Workers' Compensation in 2006 after a data analysis revealed suspicious billing patterns. Agents staked out his office in Columbus, Ohio, reviewed medical records and interviewed patients over the course of a three-year investigation.
They found, among other things, that Choudhry routinely billed for 20 hours of individual psychotherapy in a day and significantly over-reported the time he spent with patients. In some cases, he billed for 45 to 50 minutes of treatment for patients who popped in for less than five minutes or never showed up at all.
Choudhry pleaded no contest in a Franklin County, Ohio, court in June 2011 to felony workers' compensation fraud and was ordered to pay restitution of $78,573 to the Ohio Bureau of Workers' Compensation. CMS revoked his billing privileges from the date of his conviction. In an unsuccessful appeal to the Ohio medical board, Choudhry blamed his secretary for the fraudulent billing. Ohio permanently revoked his state license to practice medicine in 2012.
Two states over, Choudhry continued to work in the Illinois Medicaid program. Illinois first learned of Choudhry's workers' compensation fraud in February 2012 and suspended him from receiving payments. But the state's nearly 40-year-old payment system failed to stop payments for services he provided through the company where he worked or prescriptions that he wrote.
In spring 2012, the inspector general of the U.S. Health and Human Services Department told Illinois that Choudhry was excluded from all government healthcare programs, including Medicaid, according to Brad Hart, inspector general for the Illinois Department for Healthcare and Family Services. At that point Illinois should have terminated Choudhry's billing privileges, he said. "We probably made mistakes in this particular case."
Illinois terminated Choudhry on April 30, 2013, nearly two years after the date of his Medicare revocation. The state's Medicaid program paid $560,000 for services Choudhry provided or prescriptions he wrote after his Medicare revocation.
Yet investigators may have missed warning signs of further problems. Reuters analyzed Choudhry's billing in Illinois from 2009 through mid-2013 and found claims that billing experts said were questionable. Choudhry provided group therapy sessions for more than 100 Illinois Medicaid patients almost every other day in 2010 and 2011.
On June 6, 2011, he saw 131 group therapy patients at his Illinois practice, according to Medicaid claims data. One problem: He was in Columbus, Ohio, that day, being sentenced for workers' compensation fraud.
Beth Morgan, a medical billing consultant, said 131 patients would be a red flag even on a day he wasn't traveling. "Something's not kosher," she said.
Choudhry also claimed that he saw 300 or more patients for group therapy on each of two days in August 2010 at Midwest Behavioral Center, the psychotherapy practice where he worked. Those sessions yielded as much as $8,000 a day.
Choudhry declined to comment.
A spokesman for the Illinois Department of Healthcare and Family Services said the department is investigating Choudhry and Midwest Behavioral Center and cannot comment on either provider's billing practices.
Attempts to improve data-sharing under the Affordable Care Act to help states catch unscrupulous providers got off to a rough start. In early 2014, CMS abandoned the rollout of a new system after several states were unable to access it for at least four months.
In an April 2, 2014, email to Medicaid officials in other states, Kelly Shropshire, director of the Oklahoma Health Care Authority's program integrity division, complained that the team responsible for screening providers could not obtain a username or password from Medicare to access the system.
"What a mess," Dawn Mock, North Dakota's Medicaid integrity administrator, wrote in a March 26, 2014, email to Medicaid officials in other states. "Especially if we can't access the site. (I thought it was just us)."
State Medicaid officials said the system CMS now has in place - an Excel file updated every two weeks - allows states to share more detailed information on providers, like Social Security numbers. But fortnightly updates mean state officials don't always get the information as soon as they would like.
Another problem is that states have historically enjoyed wide latitude in how they administer Medicaid. An old joke in Medicaid circles is that if you've seen one Medicaid program, you've seen one Medicaid program.
One result is different sets of rules for each of the 50 states and Washington, D.C.
Federal regulations require that a provider terminated "for cause" in either Medicare or Medicaid be terminated by all states. But states have different interpretations of "for cause." States aren't required to ban providers terminated by Medicare when the reason doesn't fall under the definition of "for cause." One such case is when a doctor dies: Medicare removes them from its list of approved providers, while some states don't, even though experts say a dead doctor with billing privileges is an invitation to fraud.
Such differences are evident in the case of Dynasplint Systems Inc. In 2012, the U.S. Department of Justice took over a whistleblower case alleging that the Severna Park, Maryland, company was improperly billing Medicare for durable medical equipment it provided to patients living in skilled nursing facilities.
The government argued that Dynasplint falsely claimed it sold this equipment to patients for use at home. Skilled nursing homes are paid a daily rate by Medicare that includes the cost of providing durable medical equipment to patients.
Dynasplint's chief executive, George Hepburn, said the company "did not commit fraud or anything anywhere near it." He said the patients in question were not receiving skilled care and thus weren't covered by reimbursements the nursing facility received.
Some states considered the false claims lawsuit to be a "credible allegation of fraud," requiring suspension of payments to Dynasplint under the law, while other states did not. Some didn't know about the lawsuit.
At the request of the Justice Department, five states terminated or suspended payments to Dynasplint in August and September of 2013. Three other states followed suit over the next 18 months, including Arizona, which revoked Dynasplint after Reuters asked about the company. Dynasplint is still approved to bill in 24 states, however, and it has been paid at least $123,000 by state Medicaid programs since August 28, 2013. A trial is set for September 2015.
CMS Deputy Administrator Agrawal said that his agency is working to "harmonize" states' interpretation of when a provider must be terminated after CMS or another state has done so, but that discrepancies persist.
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