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When Meaningful Use is No Longer Meaningful

How Improper Implementation of Electronic Medical Records Can Lead to CMS Suspension, Exclusion and Indictment Under the False Claims Act

By Joseph G. Sapp, LL.M.

In 2009 President Obama signed the Health Information and Technology for Economic and Clinical Health (“HITECH”) Act into law. Under HITECH, eligible medical providers and hospitals are required to attest to meaningful use of electronic medical records (“EMR”) systems by 2019 or risk penalties in their reimbursement schedule. This creates a divide between the sophisticated health care systems which are adaptive to changes and the individual provider who is resistant to change practice methods that they have spent a lifetime developing. In recognizing this resistance the government has attempting to incentivize both eligible hospitals and providers by providing financial payments to those who attest prior to 2019 in a “carrot-before-the-stick” method of achieving its goal of a unified EMR system.

However, simply purchasing the EMR system to use in the providers office is not enough. Providers often fail to take the necessary steps required in actually achieving meaningful use; the failure to do so can lead to serious civil and criminal penalties. In addition, improper use of an EMR system will ultimately lead to errors in the billing and the contents of the medical records themselves triggering an audit by one of CMS’ official authorized contractors (“OAC”). While originally only focused on the States of California, Florida, and New York, the OIG has expanded its OAC audit to all fifty (50) states who are actively engaged in the audit of medical claims.

The government has not only increased its audit efforts under meaningful use, but has also has expanded the authority for Medicare exclusion. The current penalties under the False Claims Act ranges from $5,500.00 to $11,000.00 per claim. This does not even begin to take into account the three (3) times punitive damage multiplier that applies to each and every submitted CPT code. Moreover, The Federal Civil Penalties Inflation Act of 28 U.S.C. 2461 requires that civil monetary penalties be adjusted on an annual basis by the percentage by which the Consumer Price Index be increased on a yearly basis. Therefore, for claims made on or after August 1, 2016 but before January 1, 2017, the minimum penalty which may be assessed is ten-thousand seven-hundred and eighty-one dollars ($10,781.00) and the maximum penalty is twenty-one thousand five-hundred and sixty-three dollars ($21,563.00).

While the United States Supreme Court in Escobar recently limited this application to claims involving a knowing non-compliance with a statutory, regulatory, or contractual requirements if that requirement is “material”, this is hardly a relief for a health care provider under the siege of a reimbursement audit. Without the proper representation, CMS suspension and audit reimbursement requests can be a death knell for any medical practice. Moreover, HITECH imposes a maximum penalty for violations of $1.5 million. This perfect storm of improper implementation of EMR coupled with the ever growing expansion of governmental authority and regulation will ultimately leave the individual provider in its untimely wake.

Joseph G. Sapp, Esquire is a health care attorney at Chapman Law Group providing representation in the fields of CMS and Meaningful Use audits, as well as specializing in health care transactions including ambulatory surgery centers, pharmacies, urgent care facilities, physician employment and independent contractor agreements, and practice acquisition.

Chapman Law Group has been dedicated to the defense of health care providers for over 25 years. We currently represent providers in Michigan (Detroit) and Florida (Miami area/Tampa area/Jacksonville/Pensacola/Gainesville/Orlando) who are accused with False Claims Act violations, as well as Meaningful Use and CMS audit defense. Our attorneys fight aggressively to help health care providers accused of health care fraud maintain their freedom and ability to practice. We also provide self-audit assistance and best practice guidelines for avoiding allegations related to False Claim, Anti-Kickback, Stark, and failure to comply with CMS conditions. We have over 10 attorneys dedicated to health care law and the defense of health care providers and those working in the health care industry.