On March 18, 2024, the Government issued a press release announcing that a federal jury convicted a podiatrist for a scheme to defraud Medicare and Medicaid “by prescribing and dispensing medically unnecessary foot bath medications and obtaining millions of dollars in reimbursements.”[1]
The Government alleged that the podiatrist prescribed antibiotic and antifungal drugs to be mixed into a tub of water for patients to soak their feet. These drugs were in the form of capsules, creams, and powders, some of which were not even water soluble, and were prescribed to some patients that did not have a fungal or bacterial infection. The drugs were chosen based on their monetary reimbursement amount, rather than medical necessity. Finally, the Government alleged that the podiatrist would waive and reduce copayments regardless of the patient’s ability to pay.
Medical Necessity
Medicare and Medicaid coverage is generally limited to items and services that are reasonable and necessary for the diagnosis or treatment of an illness or injury. In other words, the service, drug, or device is required to be provided or prescribed in accordance with the generally accepted standards of medical practice. In this matter, no peer reviewed articles in respected scientific peer reviewed journals existed that supported the use of the foot bath soaks with the aforementioned mixture of medications. For many of the patients at issue, no fungal culture or culture and sensitivity even supported the diagnosis of a bacterial or fungal infection.
Off-Label
Drug labels generally list a drug’s approved use, which means that the FDA has evaluated its benefits and risks for that use. However, there are occasions where an FDA-approved drug can be used for an off-label indication and qualify for reimbursement by a government program. Generally, off-label use requires (1) a valid prescription for the drug and its use and (2) that the off-label use is clinically supported in one of the drug compendia.
Co-pay Waiver
The Office of the Inspector General of the U.S. Department of Health and Human Services (HHS) noted that when providers routinely waive financial obligations, except in the cases of genuine financial hardship or genuine attempts at collection efforts, providers may be unlawfully inducing that patient to purchase more products or services from the provider. Therefore, if a provider routinely waives copayments, he/she is offering a thing of value and may run afoul the Anti-Kickback Statute. Additionally, the routine waiver of co-insurance is considered fraud, it is the equivalent of accepting a lower price as payment, than is represented to the insurance company, Medicare, or Medicaid.
In sum, podiatrists and other medical providers are required to stay within the bounds of medical necessity. That is a concept that depends on the facts and circumstances of each patient and prescription.
How Frier Levitt Can Help
Frier Levitt is equipped to handle challenges to medical necessity, especially in the field of podiatry. We can represent providers in all types of government matters and investigations including the False Claims Act, criminal investigations, subpoenas, fraud waste and abuse audits. Contact us today to speak with an attorney.
Larry Kobak, Esq is a licensed podiatrist and attorney in Frier Levitt’s Healthcare Department and Matthew Modafferi, Esq is a former Assistant U.S. Attorney and focuses his practice on white collar defense and investigations, and complex civil litigation.
[1] https://www.justice.gov/opa/pr/podiatrist-convicted-4m-foot-bath-fraud-scheme
