PROVIDER ALERT: Emergency COVID-19 Billing Practices Attract DOJ Scrutiny

In January 2020, the declaration of COVID-19 as a public health emergency relaxed certain billing requirements.  See 42 C.F.R. 422.100(m) (describing requirements applicable to services provided during a disaster or emergency).  These areas, as well as other COVID-related billing practices, are now the subject of renewed scrutiny by the Department of Justice (“DOJ”).

For example, prior authorization requirements were waived during the health crisis.  Accordingly, pharmacies were permitted to submit claims for medications for which prior authorization was otherwise required via “Emergency Override Codes.”  In what is likely to be the first in a series of enforcement actions brought in this area, in December 2020, the Eastern District of New York charged two pharmacy owners for COVID-19 health care fraud for using Emergency Override Codes to bill Medicare and Medicaid for Targretin Gel 1%, an expensive orphan drug which usually requires prior authorization, that was not prescribed or dispensed to patients.

Another significant change in the billing and claims submission process during the COVID-19 pandemic was the relaxation of “refill-too-soon” edits, which bar billing for refills of certain drugs within specified time periods.  Specifically, prescription drug plans were required to, barring a few exceptions, halt all limitations under 90 days on quantity and days’ supply for covered Medicare Part D drugs.  In the enforcement action referenced above, the government alleged misuse of “refill-too-soon” edits, which allowed the pharmacy owners to submit additional false and fraudulent claims that were never dispensed to patients.

Finally, the government has also brought recent enforcement actions against health care providers involving the bundling of unnecessary procedures and/or tests with a COVID-19 test or vaccination.  Examples of these types of actions include laboratories allegedly bundling COVID-19 tests with medically unnecessary tests, such as urine drug tests or respiratory pathogen panels; physicians allegedly bundling expensive and medically unnecessary cancer genetic tests with COVID-19 tests; marketing companies for allegedly receiving kickbacks on a per-test basis for COVID-19 tests as long as the tests were bundled with more expensive, medically unnecessary tests; and medical technology companies bundling medically unnecessary allergy tests with COVID-19 tests.

The DOJ will continue to scrutinize, investigate, and prosecute improper billing practices, especially as they relate to COVID-19.  Gary L. Cantrell of Health and Human Services – Office of Inspector General said recently: “We will continue to support the unprecedented COVID-19 public health effort by holding accountable people who use deceptive tactics to profit from the pandemic.”  As such, it is imperative to ensure that despite COVID-19’s impact on the healthcare industry, healthcare providers, including physicians, pharmacies, and laboratories, comply with applicable law and take proactive steps to remediate areas of potential liability.  

How Frier Levitt Can Help

The Frier Levitt team has a team of healthcare attorneys experienced in assisting healthcare providers to navigate allegedly improper billing practices, including COVID-19 codes. Contact us to discuss how Frier Levitt can help mitigate exposure by performing a risk exposure assessment, guide you through the self-disclosure process, or aid in responding to a government or administrative investigation or subpoena.

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