The Centers for Medicare and Medicaid Services (CMS) is responsible for ensuring the integrity of Medicare and Medicaid programs in the healthcare sector.

To this end, the CMS regularly conducts audits and compliance reviews of healthcare facilities to ensure compliance and to identify any irregularities or "red flags" that could indicate fraudulent or improper billing practices.

When such concerns arise, they often lead to thorough investigations. For healthcare providers, these investigations can have serious consequences, including civil penalties, loss of licensure, or even criminal prosecution.

When audit findings suggest potential violations or "red flags" indicating possible healthcare fraud or improper billing practices, the CMS may conduct a more thorough investigation in partnership with agencies such as the Office of Inspector General (OIG) or the Department of Justice (DOJ).

Unfortunately, even minor errors in documentation or billing practices can sometimes trigger these probes, placing facilities and providers under extreme scrutiny.

For healthcare providers, these investigations can have serious consequences, including civil penalties, which can be financially crippling, loss of licensure, which can effectively end a medical career, or even criminal prosecution, which can result in imprisonment. It's crucial to understand the gravity of these potential outcomes and the need for immediate legal counsel.

Allegations in CMS Investigations

Let's examine a few of the more common allegations that may arise in CMS investigations.

• Upcoding. Upcoding occurs when healthcare providers bill for services or items at a higher reimbursement rate than the actual services or items provided. For instance, a provider might bill Medicare for a comprehensive evaluation when only a basic consultation was performed. Simply put, upcoding refers to the reimbursement of healthcare services, tests, equipment, medications, or supplies that are not accurately billed. This is viewed as an intentional effort to inflate reimbursements fraudulently.
• Unbundling. Unbundling refers to the practice of separating charges for procedures or services that are typically billed together as part of a single package. By splitting these charges, providers can claim higher cumulative reimbursement amounts. Put simply, unbundling involves reimbursing services or items at their individual, or separate, rates. For example, billing components of a surgical procedure individually rather than as a single bundled procedure constitutes unbundling.
• Billing for Non-Medically Necessary Services. Providers are required to ensure that billed services meet the medical necessity criteria of Medicare or Medicaid. Allegations may arise when services, tests, or equipment deemed unnecessary for the patient's diagnosis or treatment are billed to CMS. This is often flagged in cases involving excessive or redundant diagnostic testing. This simply means billing Medicare and Medicaid for services or items that do not qualify as medically necessary under the applicable program guidelines.
• Phantom Billing. Phantom billing involves submitting claims for services, equipment, or medications that were never provided. Providers accused of phantom billing might create fraudulent patient records or falsify documentation to make it appear as though such services were rendered. Simply put, Phantom billing is for services or items that were not actually rendered or provided to patients.
• Ghost Patients. The term "ghost patients" refers to instances where providers bill CMS programs for treatments or services provided to individuals who do not exist. This type of fraud typically involves creating fictitious patient profiles and fabricating service records to obtain fraudulent payments. This means to bill Medicare and Medicaid for non-existent patients that the provider has not actually treated. 
• Kickbacks. Offering or receiving kickbacks for patient referrals, prescribing specific medications, or using certain suppliers are major compliance issues under the Anti-Kickback Statute. These financial incentives can involve rebates, referral fees, or commissions, all of which undermine fair competition in the healthcare market. Simply put, this means offering, paying, soliciting, or accepting unlawful kickbacks in the form of rebates, commissions, or referral fees.
• Non-Compliance with Telehealth Guidelines. With the rise of telemedicine, CMS has established strict guidelines to ensure proper usage and billing of telehealth services. Non-compliance can involve billing for virtual consultations not conducted, conducted improperly, or performed outside the scope of Medicare or Medicaid rules. Violations may also include the failure to meet state-specific requirements for telehealth practice. This means that billing for telemedicine or telehealth services is non-compliant with Medicare or Medicaid guidelines.
• Opioid Overprescription and Improper Dispensing. The misuse of opioid medications remains a significant concern for CMS investigators. Allegations may focus on overprescribing opioids beyond medically necessary levels or dispensing them without adequate monitoring of patient needs and compliance. Given the ongoing opioid crisis, these cases are often pursued aggressively. Simply put, this means overprescribing or improperly dispensing or administering opioid medications in violation of Medicare or Medicaid guidelines.
• Fraudulent Certifications for Home Health or Hospice Care. Certifying patients for home health or hospice care without meeting eligibility requirements is another common allegation. Often related to kickback schemes, fraudulent certifications result in inappropriate billing for services that Medicare and Medicaid should not cover. Simply put, this means fraudulently certifying patients for home health or hospice care, often in conjunction with the payment or receipt of illegal kickbacks.

CMS Investigation Strategies

Imagine your healthcare practice or business is under investigation by the Centers for Medicare and Medicaid Services (CMS). This is not a situation to be taken lightly. You must be prepared to defend against substantial allegations of Medicare or Medicaid fraud.

To enforce the requirements of Medicare and Medicaid, the CMS relies on an extensive auditing program. CMS contracts with fee-for-service auditors to review the program billings of providers, and it directly audits sponsors' compliance.

Due to the broad scope of CMS's auditing program, facing a CMS investigation is a serious issue. If your healthcare business or practice is under investigation, you could face substantial penalties, and you need to consult experienced federal defense counsel promptly.

At Eisner Gorin LLP, our federal defense lawyers are highly experienced in CMS and other agency healthcare fraud investigations. Often, CMS collaborates with the following investigative divisions and healthcare fraud task forces:

• U.S. Department of Health and Human Services (DHHS).
• United States Department of Justice (DOJ).
• Office of Inspector General (OIG).
• Drug Enforcement Administration (DEA).
• Medicare Fraud Strike Force.
• Opioid Fraud and Abuse Detection Unit.
• Prescription Interdiction and Litigation Task Force (PIL).
• State Attorney General Medicaid Fraud Control Units (MCFUs).

Our defense lawyers are not just any lawyers; we are former prosecutors with experience in CMS and other agency healthcare fraud investigations. This unique perspective enables us to provide our clients with in-depth insights into the CMS investigation process and develop effective defense strategies based on real-world experience on both sides of high-stakes CMS inquiries.

CMS Investigations Defense Strategy

If your healthcare practice or business is under investigation by CMS, you need to determine the specific allegations against you. You can't take any chances, and you must start preparing a defense against the allegations.

There are numerous forms of Medicare and Medicaid fraud, each requiring a unique defense strategy. You must ensure that your practice or business defense strategy is tailored to the specific allegations against you.

We have successfully defended healthcare businesses and clients throughout the United States against all types of allegations of Medicare and Medicaid fraud. We provide legal representation to hospitals, doctors and other medical professionals, pharmacies, laboratories, durable medical equipment (DME) companies, and other healthcare-related entities.

Possible Outcomes and Penalties of a CMS Investigation

CMS conducts Medicare and Medicaid fraud investigations for various reasons. Often, an investigation will be triggered by an unfavorable audit determination. Suppose your healthcare business or practice has recently been audited by CMS or one of its fee-for-service contractors. In that case, the information uncovered during the audit may have triggered CMS's investigation.

Suppose your business or practice has not recently been audited. In that case, CMS's investigation may have been triggered by its automated review of billing data, a patient complaint, a referral from another agency, or a whistleblower lawsuit.

The possible outcomes of CMS investigations range from termination of the investigation without further consequences to prosecution in federal district court for criminal healthcare fraud. CMS investigations may also lead to civil charges under the False Claims Act, the Anti-Kickback Statute, the Stark Law, and other relevant federal laws.

When facing a CMS investigation, understanding the nature of the allegations is crucial to determining how to structure your practice's or business's defense.

The penalties for improperly billing Medicare or Medicaid depend on whether the alleged billing fraud was intentional or not. If your healthcare practice or business is not accused of intentionally overbilling Medicare or Medicaid, then civil penalties include fines, restitution, attorneys' fees, and program exclusion.

If federal prosecutors accuse your practice or business of intentional billing fraud, then anyone involved can face federal criminal prosecution and incarceration.

What to Do If Facing a CMS Investigation

A CMS investigation is a serious matter that should not be taken lightly. If you or your healthcare facility is under scrutiny, you need to act quickly and strategically to protect your rights and your interests.

The sooner you engage an experienced federal criminal defense attorney, the better equipped you'll be to address potential liabilities and protect your rights. Skilled legal counsel can help evaluate the allegations against you, guide you through audits and investigations, and craft a defense strategy tailored to your specific case.

Furthermore, taking a proactive approach to compliance by conducting internal audits and training staff on Medicare and Medicaid guidelines is vital for mitigating risks. Understanding the rules and being meticulous about documentation, billing practices, and service delivery can often prevent compliance issues before they arise.

There are several potential defenses to allegations of Medicare or Medicaid fraud. The most effective defense is affirmative proof that your practice's or business's program billings are fully compliant.

However, affirmative proof of compliance is not necessary. Sometimes, the best approach is to work toward convincing CMS that there is insufficient evidence to support civil or criminal charges for healthcare fraud.

If your healthcare practice or business has improperly billed Medicare or Medicaid, you will need to work with an experienced federal defense lawyer to resolve the issue.

You should not take any actions until advised by legal counsel. Voluntarily disclosing violations can mitigate the risk of increased penalties or prosecution. For more information, contact our federal criminal defense law firm, Eisner Gorin LLP, located in Los Angeles, CA.

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