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Bad Actors

“Financial Remedies When All Else Fails”

by Sean Weiss, Partner & VP of Compliance

Today I am going to keep things short and sweet and not because I cannot come up with oodles of things to say. I am keeping it to a minimum today to focus on implementing remedies when you have a “Bad Actor(s)” within your company. One of the things I am consistently asked for by clients and those who attend lectures I give is, do I have anything to help them add teeth to the language in their employment contracts with providers of medical services?

For the life of me, I struggle with providers who distance themselves from the coding and billing of patient services rendered. Think about it, if your name is on every single CMS 1500 Claim Form that is sent to an insurance company for payment, wouldn’t you want to know what was on those claim forms? We live in such a litigious world and an industry fraught over-burdensome regulations and laws. Often, even though the published guidance is either lacking in clarity or is void of any definitive direction, payors and/or government investigators will use that to their advantage to either over-reach with their enforcement authority or interpret impenetrable guidelines in a way that financially benefit them.

In recent weeks, I have had several cases brought to me and our team. These cases brought by DOJ consist of Federal False Claims Act (FCA), Health Care Fraud Statute, Anti-Kickback (AKS) and Stark. We are also dealing with qui tams brought by relators where the government has declined to engage but agreed the civil case should proceed and then, depending on the outcome, they may revisit on the criminal side. Regardless of the outcome of these cases, there are financial and reputational costs to the organizations and providers and they’re significant! Recently, I gave lectures for the National Alliance of Medical Auditing Specialist (NAMAS) and the American Urological Association (AUA) on 2019 OIG Risks and focused my talk on what I see and consider to be the biggest risks facing health care providers and organizations today. My list consisted of the following:

  • Evaluation and Management Services
  • Cloning and Clinical Plagiarism
  • Incident-to and Split/Shared Services
  • Prolonged Evaluation and Management Services
  • LSO Back Braces (does not pertain to urology)
  • “Improvement Standard” (does not pertain to urology)
  • “Medical Necessity”

As I was speaking on these topics, I thought back to the groups I worked or am working with on their cases and thought about how many times attendees will say to me, “I have told this to my providers(s) and I can talk till I’m blue in the face but it doesn’t sink in.” In my capacity as a third-party compliance officer/consultant for various groups of varying sizes around the country, I am often faced with the same challenges of how-to bring providers into compliance. What I lean on are financial implications for those who refuse to comply with organizational policies. While I do not like to do it often, I am left with no choice and so we enforce the Financial Remedies portion of their employment agreement. Now, I am not saying that we allow providers to ride roughshod for a period of time before we say “Enough!” When it is on me and when I am advising clients, we enforce at the first sign of non-compliance so that we curtail the behavior before it has an opportunity to get further out of hand or infect others within the organization. Below, I am providing you with the language I have created for employment agreements in the past and that I currently use with modifications. Obviously, this is in templated format so you will need to adjust it for your use and to fit within the culture of your organization. Please, do not use this language as is and first check with your general counsel or outside counsel to ensure it works for your organization and within the parameters of your state’s specific laws related to contractual language and your ability to enforce it.


Financial Remedies:

Physicians are expected to perform the code (CPT, ICD, and HCPCS) selection for claims submitted in their name to all payors. The documentation for each patient encounter, surgery or diagnostic service is expected to be complete and accurate, and done in a timely manner.


Failure to comply with ______________________ policy related to coding and documentation may result in financial take-backs or off-sets against future compensation (Guarantee and/or Bonus) to allow the ______________________ to recoup losses assessed by Federal, State or Commercial Payors. In addition, __________________ may impose additional sanctions against the provider including, but not limited to, suspension without pay up to and including termination subject to the terms of your “Employment Agreement”.


Additionally, any legal or expert (statisticians, consultants, etc.) fees incurred by _____________________ as a result of a legal or administrative action brought by a Federal or State agency or by a Commercial Payor due to potential abusive or fraudulent behavior on the part of the provider will be recouped by __________________ either through take-backs or offsets of future compensation (Guaranteed and/or Bonus) subject to the terms of your “Employment Agreement”.


False Claims Act [31 U.S.C. §§ 3729–3733]

The civil FCA protects the Government from being overcharged or sold shoddy goods or services. It is illegal to submit claims for payment to Medicare or Medicaid that you know or should know are false or fraudulent. Filing false claims may result in fines of up to three times the programs’ loss plus $11,000 per claim filed. Under the civil FCA, each instance of an item or a service billed to Medicare or Medicaid counts as a claim.

Under the civil FCA, no specific intent to defraud is required. The civil FCA defines “knowing” to include not only actual knowledge but also instances in which the person acted in deliberate ignorance or reckless disregard of the truth or falsity of the information.

There also is a criminal FCA (18 U.S.C. § 287). Criminal penalties for submitting false claims include imprisonment and criminal fines. Physicians have gone to prison for submitting false health care claims. OIG also may impose administrative civil monetary penalties for false or fraudulent claims.


Should a provider face legal or administrative proceedings through the OIG and/or DOJ, AHS Physician Enterprise will act in a responsible manner to comply with the actions through the Office of General Counsel and outside counsel.



Provider Disagreement with Review Results:


Should a provider disagree with the findings of an internal review or that of the preferred vendor performing the pre-bill review they may, at their cost, request an external review of their documentation by one of the _________________ Approved Vendors. Should the external review show a deviation from the __________________ coding specialist, a conference with all parties will be arranged to discuss the variation on the coding review. The Office of Compliance and/or the Office of General Counsel will be requested for their guidance in reaching a resolution. Should the external review requested by the provider confirm the findings of the internal review and that of the pre-bill review, the provider will be subject to the Escalation Policy of the _______________ Corporate Compliance Program.




Knowing when and how to control a situation is critical to your organization but, more importantly, to employees within your organization taking you seriously and recognizing there are serious consequences to non-compliance. Enforcing standards and contractual language to cure a breach or inappropriate behavior is also critical in the event you have to negotiate a settlement agreement with OIG or DOJ. Again, creating a culture of compliance is a must for all organizations regardless of size and geo-location.

What to do next…

  1. If you need help with an audit appeal or regulatory compliance concern, contact us at (800) 635-4040 or via email at
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