The problems with billing for free supplies
By Elizabeth E. Hogue, Esq. Burtonsville, MD
Providers are under increasing pressure to be as cost-effective as possible. At the same time, free samples of products, some of which are relatively expensive, are still readily available.
Some providers, therefore, have been tempted to provide supplies they received for free to patients and then bill third-party payers for them, including the Medicare and Medicaid programs.
Practitioners may be tempted to include the costs of free supplies on the cost reports they
continue to file under the Medicare Prospective Payment System or with other third-party payers such as the Medicaid program.
Providers who have a thorough understanding of fraud and abuse in the Medicare/Medicaid programs will recognize immediately that these practices are fraudulent.
Those practices are not within any gray areas. they clearly are against the law. Nonetheless, there still are providers who engage in such practices. For example, a urologist in Bloomfield, CT, was charged with billing payers for free samples of a drug used to treat prostate cancer, Lupron Depot.
The samples were supplied to the urologist by "Company X" free. The physician, in turn, supplied the drug to his patients. Based upon claims submitted to payers for the free dosages of the drug, the urologist collected between $30,000 and $40,000.
The applicability of this case to wound care providers is clear. Just as the urologist was charged with billing for drugs he received free of charge, providers who give free supplies to patients and then bill payers for them also are engaging in fraud. Providers must be extremely careful not to engage in this practice.
Some practical ways to avoid this problem
- First, providers should educate staff that this practice is fraudulent. Training should be provided at an inservice program that is mandatory for every staff member to attend. Attendance should be verified with a sign-in sheet.
- Since it is unlikely that every member of the staff will be present for the inservice program, it should be videotaped. Staff who could not attend the inservice program should be required to watch the tape and indicate in writing that they have done so.
Another strategy is to promptly label all supplies received at no charge from representatives of manufacturers and/or exhibitors at conferences. For example, as soon as those supplies are received they could be labeled as follows:
"RECEIVED FREE OF CHARGE.
DO NOT CHARGE ANY PAYER FOR THESE SUPPLIES WHEN USED."
or
"NOT FOR RESALE"
The label should appear in large, block letters on a location on the packaging that cannot be overlooked by anyone utilizing the supplies.
Providers beware! The possible consequences of engaging in the practices described are very serious.
Providers can be criminally prosecuted and/or civil action may be taken against them
Consequences include large criminal fines and jail time. Providers also may be required to pay civil money penalties or be suspended or excluded from participation in Medicare, Medicaid and other state and federal health care programs.
Providers who cannot take care of patients with these payer sources undoubtedly will experience difficulty continuing their businesses.
Some providers continue to thumb their noses at fraud and abuse prohibitions. Don’t be one of them.
[A complete list of Elizabeth Hogue’s publications is available by contacting Elizabeth E. Hogue, Esq., 15118 Liberty Grove, Burtonsville, MD 20866. Phone: (301) 421-0143. Fax (301) 421-1699. E-mail: ehogue5@ Comcast.net.]
By Elizabeth E. Hogue, Esq. Burtonsville, MD Providers are under increasing pressure to be as cost-effective as possible. At the same time, free samples of products, some of which are relatively expensive, are still readily available.You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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