A California ambulatory surgery center has agreed to pay $66,715 in what is probably the first civil monetary penalty settlement with the HHS Office of Inspector General over Provider Relief Fund (PRF) money. There may be more enforcement to come in an area that didn’t exist a year ago, before the arrival of the COVID-19 pandemic.
Milan S. Chakrabarty, M.D., individually and doing business as Hemet Endoscopy Center, allegedly “made, used, or caused to be made a false statement in a document that is required to be submitted in order to directly or indirectly receive or retain funds provided in whole or in part by the Secretary of HHS,” according to the settlement, which was obtained through the Freedom of Information Act.
The PRF, which was created by the Coronavirus Aid, Relief, and Economic Security Act, made $175 billion available to hospitals and other providers for diagnosing and treating patients and replacing revenue lost because of the pandemic. Providers must submit an attestation that they will comply with the terms and conditions attached to the money. They also must follow reporting requirements, which are routinely updated. Congress added another $3 billion to the PRF in December in the 2021 Consolidated Appropriations Act.[1]
OIG alleged that on April 17, 2020, Hemet Endoscopy Center received a PRF payment. An employee of Chakrabarty’s attested in the PRF portal that Hemet Endoscopy Center was eligible for the money because, “among other things, it treated patients after January 31, 2020, and its Medicare billing privileges had not been revoked. However, the Hemet Endoscopy Center did not treat patients after January 31, 2020, and HHS had revoked its Medicare billing privileges on November 22, 2019,” OIG contended in the settlement. Hemet Endoscopy Center subsequently kept its April 17, 2020, PRF payment and a May 26, 2020, PRF payment “despite being ineligible to retain those payments,” OIG alleged.
Hemet Endoscopy Center and Chakrabarty didn’t admit liability in the settlement. His attorney didn’t respond to a request for comment by press time.
The money flowing from the PRF is being audited by both OIG[2] and the HHS Health Resources & Services Administration (HRSA). The audits are aimed at ensuring providers are eligible for the funds and are using them in accordance with the terms and conditions and reporting requirements.
It doesn’t take much legwork for OIG or other government agencies to identify providers who have received government funds after their billing privileges were revoked, said attorney Judy Waltz, with Foley & Lardner in San Francisco. “I don’t expect the government to know everything about PRF recipients, but something like this is easy for the government to identify,” she said. Although CMS doesn’t make the list of billing revocations available to the public, they collect the information, and it’s available to government auditors and investigators, Waltz said.
CMS also maintains a preclusion list.[3] It has the names of prescribers and providers that are precluded from receiving payment for Medicare Advantage items and services or Part D drugs furnished or prescribed to Medicare beneficiaries. An individual or entity whose Medicare billing privileges have been revoked would be on that preclusion list, Waltz said. “That list is also not available to the general public, but presumably would be available to other government offices. “It’s not like you get a revocation and no one knows how to find it. This [case] shows the government is looking for basic discrepancies in the PRF attestations and will look for more complicated ones later,” she said.
Ownership Changes Are a PRF Vulnerability
Other more subtle versions of alleged PRF noncompliance may start to pop up, Waltz said. “These will likely include situations that aren’t necessarily fraudulent, but situations where people didn’t understand the requirements, or they changed and people didn’t understand what to do about it,” she said. “It is a lot of money and a lot of confusion.”
The nexus of PRF money and the Medicare change of ownership requirement is ripe for overpayments. According to Medicare rules, new owners have successor liability, which means they take on the overpayments and underpayments of their acquisitions, Waltz said. When it came to the PRF, which is not money from Medicare trust funds although it’s paid to Medicare providers, one of her clients assumed that the usual rules about successor liability applied, and the PRF payments would transfer to the new owner. But HHS and HRSA, which administer the PRF, changed the rules. In her client’s case, the previous owner had signed over the PRF check to the new owner, which is what you would do with a Medicare underpayment. “But HHS issued new instructions that said if the PRF check was sent to a provider who’s no longer in business, the payment should have gone back to the government,” Waltz explained. “It should have not been retained or transferred to the new owner. The new owner isn’t eligible for the previous owner’s funds. We had to work out a means for repayment.”
Contact Waltz at jwaltz@foley.com
