Singing the upcoding blues: Assisted living provider to Pay $14.9M to Resolve Alleged False Claims Act lawsuit
What is upcoding?
In the healthcare industry, billing codes are utilized to charge Medicare or Medicaid for patient services, with each code representing a specific procedure or diagnosis. These codes are used by the government to calculate reimbursement amounts. Upcoding happens when a healthcare provider submits a bill for a more severe or costly procedure or diagnosis than what was actually provided or determined. This practice inflates medical costs for the government, offers no additional benefit to the patient, and is both illegal and unethical.
The scheme
Bluestone Physician Services of Florida LLC, Bluestone Physician Services, P.A., and Bluestone National LLC (“Bluestone”) agreed to settle allegations that it was upcoding the service that it provided. While the publicly released details are a bit thin, the allegations cover a period from January 1, 2015, through December 31, 2019, during which Bluestone allegedly submitted claims for two E&M codes—the domiciliary rest home visit code for established patients (99337) and the chronic care management code (99490)—that did not accurately reflect the level of service provided, as part of their upcoding scheme. In short, Bluestone was providing a low level of service when it claimed that it was providing a higher level of service. That’s a dealbreaker.
The penalty
Bluestone will pay a financial penalty and enter into a Corporate Integrity Agreement. It will pay $14,902,000 to resolve allegations that they “knowingly submitted claims for certain Evaluation and Management (E&M) codes for services related to the management of chronic care patients in assisted living and other care facilities that were not provided in conformity with applicable Medicare, Medicaid and TRICARE requirements.”
It will also enter into a five-year Corporate Integrity Agreement (CIA) with HHS-OIG, which requires Bluestone, among other obligations, to establish and maintain a compliance program meeting certain requirements and to submit to an Independent Review Organization’s review of Bluestone’s Medicare claims to determine whether such claims were medically necessary, appropriately documented, and correctly coded.
The whistleblower
The whistleblower was the former General Manager for Bluestone’s Florida market. She’ll receive $2,831,380 in connection with the settlement. Under the qui tam provision of the False Claims Act, a private party (also referred to as a whistleblower or relator) may file an action on behalf of the United States and receive a portion of the recovery, typically between 15-30%.
If you think you’ve observed fraud or misconduct, we can evaluate your options. Vivek Kothari is a former federal prosecutor who represents whistleblowers. For a free consultation, contact Vivek by email, phone, Signal, or fill out the contact form.