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Fact Sheet

FOR IMMEDIATE RELEASE
Monday, August 20, 2007

Contact: HHS Press Office
(202) 690-6343

Medicare Integrity Program Demonstration for Providers of Infusion Therapy in High-Risk Areas

[En Español]

The Department of Health and Human Services announced a two-year demonstration project by the Centers for Medicare & Medicaid Services (CMS) under the authority of  Section 402(a)(1)(J) of the Social Security Amendments of 1967 [42 U.S.C. § 1395b-1(a)(1)(J)] which permits the Secretary to develop or demonstrate improved methods for the investigation and prosecution of fraud in the provision of care or services under the health programs established by the Social Security Act. 

The demonstration, which focuses on South Florida, seeks to develop and demonstrate improved methods for the investigation and prosecution of fraud occurring among infusion providers. 

  • Infusion providers: Clinics or solo practitioners located in South Florida, who provide intravenous infusion therapy and/or intramuscular and subcutaneous injections in the office setting only, not those who provide these services in the home setting, will be subject to the demonstration. Infusion providers shifting from infusion to other procedure codes to avoid detection and bypass administrative actions will also be included.

  • Infused and injected drugs: Medicare’s HealthCare Common Procedure Coding System (HCPCS) categorizes infused and injected medications as J codes and Q codes to specifically identify the medication, dosage and administration route. For example, J0881 is the HCPCS code for “Injection, Darbepoetin Alfa, 1 microgram (non-ESRD use).”  Medicare also separately reimburses drug administration (i.e., injection or infusion).  For example 96542 is the HCPCS code for “Chemotherapy injection,” 90780 is the code for “IV infusion, 1 hour;” and 90782 is the code for “injection, subcutaneous or intramuscular.”  

  • Geographic area: The demo focuses on infusion providers in South Florida and, if providers relocate to avoid detection, will expand to other Florida locales designated as high risk by CMS and federal law enforcement. 

Background

In response to spikes in infusion billing detected in late 2003, CMS and its Miami Satellite Division, First Coast Service Options, Inc. (the Florida Medicare carrier), and TriCenturion (then Florida’s Medicare program safeguard contractor), launched a multi-faceted initiative in 2004 to address widespread infusion fraud in South Florida.  In March 2005, EDS took over as the program safeguard contractor (PSC).  In 2005 and 2006, CMS and its contractors participated in Governor Jeb Bush’s Federal/State Florida Infusion Task Force with the Department of Justice the Department of Health and Human Services’ Office of Inspector General, the Federal Bureau of Investigation and Florida’s Medicaid Fraud Control Unit, Department of Health, Agency for Health Care Administration, Office of the Attorney General, Office of Drug Control and the Governor’s Office. 

Medicare billing for infusion services in South Florida is disproportionately high.  Although significant progress has been made, fraudulent billing practices of unscrupulous infusion providers continue to cost the Medicare program millions of dollars.  The demonstration will provide additional tools for removal of fraudulent providers from the Medicare program and for more effective and efficient fraud detection and investigation. 

Enormity of the Problem

The Medicare infusion scam began when for-profit clinics and doctors recruited HIV/AIDS patients and paid them to come to their clinics for non-rendered or medically unnecessary infusion services, which they billed to Medicare at clinically unbelievable frequencies and toxic dosages.

Florida’s 2004 average Medicare submitted charges per HIV/AIDS beneficiary ($16,389) were four times higher than California’s ($3,932) and nearly eight times higher than New York’s ($1,935). 

Florida, with fewer AIDS cases in 2004 (94,725) than California (133,292) or New York (162,466), had total submitted Medicare charges for HIV/AIDS beneficiaries ($1,552,417,426) that were three times higher than California’s ($524,100,645) and five times higher than New York’s ($314,315,002).

Key Actions Taken by CMS and its Partners in 2005 and 2006:

Combinations of corrective actions have been implemented in Florida such as joint Federal/State site visits, prepayment edits, autodenials of clinically unbelievable dosages, payment suspensions, provider enrollment on-site and activity checks, enrollment revocations and deactivations, data analysis, complaint investigations, prosecutions and plea agreements.  In 2005 and 2006, carrier and PSC prepayment reviews and edits have directly resulted in denial of fraudulent and medically unnecessary Medicare infusion claims with charges in excess of $1.8 billion. The United States Attorney’s Office for the Southern District of Florida has filed criminal charges in 20 infusion therapy health care fraud cases involving 42 defendants during 2006 and 2007, to date. (See case list below.) 

Components of the Demonstration:

1.  Immediate submission of enrollment application. Letters will be sent to targeted South Florida infusion providers asking that they resubmit Medicare provider enrollment applications within 30 days of CMS’ notification.  

2.  Revocation of billing privileges.  Medicare billing privileges will be revoked (and appropriate recoupment measures applied) if an infusion provider fails to reapply within 30 days of receipt of CMS’ letter; fails to report a change in ownership or address; fails to report owners, partners, directors or managing employees who have committed a felony within the past 10 years; or fails to comply with all of the Medicare provider enrollment requirements.

3.  Enhanced review of infusion providers.   Infusion providers that successfully complete the reapplication process will be subject to enhanced review, including site visits driven by established risk factors. 

4. Consumer fraud prevention.  The infusion therapy demonstration will introduce two features to help consumers support this fraud prevention effort.  A new toll-free Part B Florida beneficiary infusion fraud hotline will be established in the near future.  CMS will also issue Medicare Summary Notices (MSNs) to beneficiaries in South Florida on a monthly basis instead of quarterly, to support more frequent and timely scrutiny of infusion provider billings.   

INFUSION CLINIC FRAUD CASES

United States Attorney’s Office for the Southern District of Florida

In 2006 and 2007, the United States has filed 20 criminal cases against 42 defendants involved in infusion clinic health care fraud in the Southern District of Florida:

(1)        United States vs. Frantz Achille, No. 06-20496-CR

(2)        United States vs. Onelio Baez, et al., No. 05-20849-CR

(3)        United States vs. Gregory Delatour, No. 06-20029-CR

(4)        United States vs. Pedro Diaz, et al., No. 05-20869-CR

(5)        United States vs. Luis Manuel Fernandez, et al., No. 06-20322-CR

(6)        United States vs. Magda Lavin, No. 05-20814-CR

(7)        United States vs. Thaiz Parra, et al., No. 06-60167-CR

(8)        United States vs. Isaac Nosovsky, et al., No. 06-20178-CR

(9)        United States vs. Rafael Walled, No. 06-20030-CR

(10)      United States vs. Rosa Walled, No. 06-20031-CR

(11)      United States vs. Cesar Romero, No. 06-20740-CR

(12)      United States vs. Arnold Garcia, et al., No. 07-20057-CR

(13)      United States vs. Luis G. Henriquez Delgado, No. 07-20180-CR

(14)      United States vs. Jose Prieto, et al., No. 07-20177-CR

(15)      United States vs. Leider Alexis Munoz, No. 07-20225-CR

(16)      United States vs. Jorge Luis Mocega, et al., No. 07-20419-CR

(17)      United States vs. Orestes Alvarez-Jacinto, MD, No. 07-20420-CR

(18)      United States vs. Lester Miranda, et al., No. 07-20612-CR

(19)      United States vs. Rupert Francis, No. 07-20631-CR

(20)      United States vs. Rita Campos Ramirez, No 07-20633-CR