[Federal Register Volume 64, Number 7 (Tuesday, January 12, 1999)]
[Notices]
[Pages 1813-1816]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-631]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of Inspector General


Publication of OIG Special Fraud Alert on Physician Liability for 
Certifications in the Provision of Medical Equipment and Supplies and 
Home Health Services

AGENCY: Office of Inspector General (OIG), HHS.

ACTION: Notice

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SUMMARY: This Federal Register notice sets forth a recently issued OIG 
Special Fraud Alert concerning physician liability for certifications 
in the provision of medical equipment and supplies and home health 
services. For the most part, OIG Special Fraud Alerts address national 
trends in health care fraud, including potential violations of the 
Medicare anti-kickback statute. This Special Fraud Alert, issued to the 
health care provider community and now being reprinted in this issue of 
the Federal Register, specifically highlights physicians' 
responsibilities in making certifications for home health services and 
durable medical equipment, and the legal significance of the 
certifications.

FOR FURTHER INFORMATION CONTACT: Joel J. Schaer, Office of Counsel to 
the Inspector General, (202) 619-0089.

SUPPLEMENTARY INFORMATION:

I. Background

    The Office of Inspector General (OIG) issues Special Fraud Alerts 
based on information it obtains concerning particular fraudulent or 
abusive practices within the health care industry.
    Special Fraud Alerts are intended for widespread dissemination to 
the health care provider community, as well as those charged with 
administering the Medicare and Medicaid programs. To date, the OIG has 
published in the Federal Register the texts of 9 previously-issued 
Special Fraud Alerts.1 It is the OIG's intention to publish 
future Special Fraud Alerts in this same manner as a regular part of 
our dissemination of such information.2
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    \1\ See December 19, 1994 (59 FR 65372); August 10, 1995 (60 FR 
40847); June 17, 1996 (61 FR 30623); and April 24, 1998 (63 FR 
20415).
    \2\ All OIG Special Fraud Alerts are also available on the 
internet at the OIG web site at http://www.dhhs.gov/progorg/oig/
frdalrt/index.htm.
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    In an effort to promote voluntary compliance in the health care 
industry and assist providers in their compliance efforts, the OIG has 
developed a Special Fraud Alert, set forth below, that addresses 
potential problem areas with

[[Page 1814]]

regard to physician certification in the provision of medical equipment 
and supplies and home health services. Among other things, this newly-
issued Special Fraud Alert addresses: (1) the importance of physician 
certification for Medicare; (2) how improper physician certifications 
foster fraud; and (3) potential consequences for knowingly signing a 
false or misleading certification, or signing with reckless disregard 
for the truth. A reprint of this Special Fraud Alert follows.

II. Special Fraud Alert: Physician Liability for Certifications in 
the Provision of Medical Equipment and Supplies and Home Health 
Services (January 1999)

    The Office of Inspector General (OIG) was established at the 
Department of Health and Human Services by Congress in 1976 to identify 
and eliminate fraud, waste, and abuse in the Department's programs and 
to promote efficiency and economy in departmental operations. The OIG 
carries out this mission through a nationwide program of audits, 
inspections, and investigations.
    To reduce fraud and abuse in the Federal health care programs, 
including Medicare and Medicaid, the OIG actively investigates 
fraudulent schemes that obtain money from these programs and, when 
appropriate, issues Special Fraud Alerts that identify segments of the 
health care industry that are particularly vulnerable to abuse. Copies 
of all OIG Special Fraud Alerts are available on the internet at http:/
/www.dhhs.gov/progorg/oig/frdalrt/index.htm.
    We are issuing this Fraud Alert because physicians may not 
appreciate the legal and programmatic significance of certifications 
they make in connection with the ordering of certain items and services 
for their Medicare patients. While the OIG believes that the actual 
incidence of physicians' intentionally submitting false or misleading 
certifications of medical necessity for durable medical equipment or 
home health care is relatively infrequent, physician laxity in 
reviewing and completing these certifications contributes to fraudulent 
and abusive practices by unscrupulous suppliers and home health 
providers. We urge physicians and their staff to report any suspicious 
activity in connection with the solicitation or completion of 
certifications to the OIG.
    Physicians should also be aware that they are subject to 
substantial criminal, civil, and administrative penalties if they sign 
a certification knowing that the information relating to medical 
necessity is false, or with reckless disregard as to the truth of the 
information being submitted. While a physician's signature on a false 
or misleading certification made through mistake, simple negligence, or 
inadvertence will not result in personal liability, the physician may 
unwittingly be facilitating the perpetration of fraud on Medicare by 
suppliers or providers. Accordingly, we urge all physicians to review 
and familiarize themselves with the information in this Fraud Alert. If 
a physician has any questions as to the application of these 
requirements to specific facts, the physician should contact the 
appropriate Medicare Fiscal Intermediary or Carrier.

The Importance of Physician Certification for Medicare

    The Medicare program only pays for health care services that are 
medically necessary. In determining what services are medically 
necessary, Medicare primarily relies on the professional judgment of 
the beneficiary's treating physician, since he or she knows the 
patient's history and makes critical decisions, such as admitting the 
patient to the hospital; ordering tests, drugs, and treatments; and 
determining the length of treatment. In other words, the physician has 
a key role in determining both the medical need for, and utilization 
of, many health care services, including those furnished and billed by 
other providers and suppliers.
    Congress has conditioned payment for many Medicare items and 
services on a certification signed by a physician attesting that the 
item or service is medically necessary. For example, physicians are 
routinely required to certify to the medical necessity for any service 
for which they submit bills to the Medicare program.
    Physicians also are involved in attesting to medical necessity when 
ordering services or supplies that must be billed and provided by an 
independent supplier or provider. Medicare requires physicians to 
certify to the medical necessity for many of these items and services 
through prescriptions, orders, or, in certain specific circumstances, 
Certificates of Medical Necessity (CMNs). These documentation 
requirements substantiate that the physician has reviewed the patient's 
condition and has determined that services or supplies are medically 
necessary.
    Two areas where the documentation of medical necessity by physician 
certification plays a key role are (i) home health services and (ii) 
durable medical equipment (DME). Through various OIG audits, we have 
discovered that physicians sometimes fail to discharge their 
responsibility to assess their patients' conditions and need for home 
health care. Similarly, the OIG has found numerous examples of 
physicians who have ordered DME or signed CMNs for DME without 
reviewing the medical necessity for the item or even knowing the 
patient.

Physician Certification for Home Health Services

    Medicare will pay a Medicare-certified home health agency for home 
health care provided under a physician's plan of care to a patient 
confined to the home. Covered services may include skilled nursing 
services, home health aide services, physical and occupational therapy 
and speech language pathology, medical social services, medical 
supplies (other than drugs and biologicals), and DME.
    As a condition for payment, Medicare requires a patient's treating 
physician to certify initially and recertify at least every 62 days (2 
months) that:
     The patient is confined to the home;
     The individual needs or needed (i) intermittent skilled 
nursing care; (ii) speech or physical therapy or speech-language 
pathology services; or (iii) occupational therapy or a continued need 
for occupational therapy (payment for occupational therapy will be made 
only upon an initial certification that includes care under (i) or (ii) 
or a recertification where the initial certification included care 
under (i) or (ii));
     A plan of care has been established and periodically 
reviewed by the physician; and
     The services are (were) furnished while the patient is 
(was) under the care of a physician.
    The physician must order the home health services, either orally or 
in writing, prior to the services being furnished. The physician 
certification must be obtained at the time the plan of treatment is 
established or as soon thereafter as possible. The physician 
certification must be signed and dated prior to the submission of the 
claim to Medicare. If a physician has any questions as to the 
application of these requirements to specific facts, the physician 
should contact the appropriate Medicare Fiscal Intermediary or Carrier.

Physician Orders and Certificates of Medical Necessity for Durable 
Medical Equipment, Prosthetics, Orthotics, and Supplies for Home Use

    DME is equipment that can withstand repeated use, is primarily used 
for a medical purpose, and is not generally used in the absence of 
illness or injury.

[[Page 1815]]

Examples include hospital beds, wheelchairs, and oxygen delivery 
systems. Medicare will cover medical supplies that are necessary for 
the effective use of DME, as well as surgical dressings, catheters, and 
ostomy bags. However, Medicare will only cover DME and supplies that 
have been ordered or prescribed by a physician. The order or 
prescription must be personally signed and dated by the patient's 
treating physician.
    DME suppliers that submit bills to Medicare are required to 
maintain the physician's original written order or prescription in 
their files. The order or prescription must include:
     The beneficiary's name and full address;
     The physician's signature;
     The date the physician signed the prescription or order;
     A description of the items needed;
     The start date of the order (if appropriate); and
    \ the diagnosis (if required by Medicare program policies) and a 
realistic estimate of the total length of time the equipment will be 
needed (in months or years).
    For certain items or supplies, including supplies provided on a 
periodic basis and drugs, additional information may be required. For 
supplies provided on a periodic basis, appropriate information on the 
quantity used, the frequency of change, and the duration of need should 
be included. If drugs are included in the order, the dosage, frequency 
of administration, and, if applicable, the duration of infusion and 
concentration should be included.
    Medicare further requires claims for payment for certain kinds of 
DME to be accompanied by a CMN signed by a treating physician (unless 
the DME is prescribed as part of a plan of care for home health 
services). When a CMN is required, the provider or supplier must keep 
the CMN containing the treating physician's original signature and date 
on file.
    Generally, a CMN has four sections:
     Section A contains general information on the patient, 
supplier, and physician. Section A may be completed by the supplier.
     Section B contains the medical necessity justification for 
DME. This cannot be filled out by the supplier. Section B must be 
completed by the physician, a non-physician clinician involved in the 
care of the patient, or a physician employee. If the physician did not 
personally complete section B, the name of the person who did complete 
section B and his or her title and employer must be specified.
     Section C contains a description of the equipment and its 
cost. Section C is completed by the supplier.
     Section D is the treating physician's attestation and 
signature, which certifies that the physician has reviewed sections A, 
B, and C of the CMN and that the information in section B is true, 
accurate, and complete. Section D must be signed by the treating 
physician. Signature stamps and date stamps are not acceptable.
    By signing the CMN, the physician represents that:
     He or she is the patient's treating physician and the 
information regarding the physician's address and unique physician 
identification number (UPIN) is correct;
    \ The entire CMN, including the sections filled out by the 
supplier, was completed prior to the physician's signature; and
    \ The information in section B relating to medical necessity is 
true, accurate, and complete to the best of the physician's knowledge.

Improper Physician Certifications Foster Fraud

    Unscrupulous suppliers and providers may steer physicians into 
signing or authorizing improper certifications of medical necessity. In 
some instances, the certification forms or statements are completed by 
DME suppliers or home health agencies and presented to the physician, 
who then signs the forms without verifying the actual need for the 
items or services. In many cases, the physician may obtain no personal 
benefit when signing these unverified orders and is only accommodating 
the supplier or provider. While a physician's signature on a false or 
misleading certification made through mistake, simple negligence, or 
inadvertence will not result in personal liability, the physician may 
unwittingly be facilitating the perpetration of fraud on Medicare by 
suppliers or providers. When the physician knows the information is 
false or acts with reckless disregard as to the truth of the statement, 
such physician risks criminal, civil, and administrative penalties.
    Sometimes, a physician may receive compensation in exchange for his 
or her signature. Compensation can take the form of cash payments, free 
goods, or any other thing of value. Such cases may trigger additional 
criminal and civil penalties under the anti-kickback statute.
    The following are examples of inappropriate certifications 
uncovered by the OIG in the course of its investigations of fraud in 
the provision of home health services and medical equipment and 
supplies:
    \ A physician knowingly signs a number of forms provided by a home 
health agency that falsely represent that skilled nursing services are 
medically necessary in order to qualify the patient for home health 
services.
    \ A physician certifies that a patient is confined to the home and 
qualifies for home health services, even though the patient tells the 
physician that her only restrictions are due to arthritis in her hands, 
and she has no restrictions on her routine activities, such as grocery 
shopping.
    \ At the prompting of a DME supplier, a physician signs a stack of 
blank CMNs for transcutaneous electrical nerve stimulators (TENS) 
units. The CMNs are later completed with false information in support 
of fraudulent claims for the equipment. The false information purports 
to show that the physician ordered and certified to the medical 
necessity for the TENS units for which the supplier has submitted 
claims.
    \ A physician signs CMNs for respiratory medical equipment falsely 
representing that the equipment was medically necessary.
    \ A physician signs CMNs for wheelchairs and hospital beds without 
seeing the patients, then falsifies his medical charts to indicate that 
he treated them.
    \ A physician accepts anywhere from $50 to $400 from a DME supplier 
for each prescription he signs for oxygen concentrators and nebulizers.

Potential Consequences for Unlawful Acts

    A physician is not personally liable for erroneous claims due to 
mistakes, inadvertence, or simple negligence. However, knowingly 
signing a false or misleading certification or signing with reckless 
disregard for the truth can lead to serious criminal, civil, and 
administrative penalties including:
    \ Criminal prosecution;
    \ Fines as high as $10,000 per false claim plus treble damages; or
    \ administrative sanctions including: exclusion from participation 
in Federal health care programs, withholding or recovery of payments, 
and loss of license or disciplinary actions by state regulatory 
agencies.
    Physicians may violate these laws when, for example:
    \ They sign a certification as a ``courtesy'' to a patient, service 
provider, or DME supplier when they have not first made a determination 
of medical necessity;

[[Page 1816]]

    \ They knowingly or recklessly sign a false or misleading 
certification that causes a false claim to be submitted to a Federal 
health care program; or
    \ They receive any financial benefit for signing the certification 
(including free or reduced rent, patient referrals, supplies, 
equipment, or free labor).
    Even if they do not receive any financial or other benefit from 
providers or suppliers, physicians may be liable for making false or 
misleading certifications.

What To Do If You Have Information About Fraud and Abuse Against 
Medicare or Medicaid Programs

    If you have information about physicians, home health agencies, or 
medical equipment and supply companies engaging in any of the 
activities described above, contact any of the regional offices of the 
Office of Investigations of the Office of Inspector General, U.S. 
Department of Health and Human Services, at the following locations:

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        Field offices             States served           Telephone
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Boston......................  MA, VT, NH, ME, RI,   617-565-2664
                               CT
New York....................  NY, NJ, PR, VI        212-264-1691
Philadelphia................  PA, MD, DE, WV, VA,   215-861-4586
                               DC
Atlanta.....................  GA, KY, NC, SC, FL,   404-562-7603
                               TN, AL, MS
Chicago.....................  IL, MN, WI, MI, IN,   312-353-2740
                               OH, IA, MO
Dallas......................  TX, NM, OK, AR, LA,   214-767-8406
                               CO, UT, WY, MT, ND,
                               SD, NE, KS
Los Angeles.................  AZ, NV, So. CA        714-246-8302
San Francisco...............  No. CA, AK, HI OR,    415-437-7961
                               ID, WA
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    To Report Suspected Fraud, Call or Write: 1-800-HHS-TIPS (1-800-
447-8477), Department of Health and Human Services, Office of Inspector 
General, P.O. Box 23489, L'Enfant Plaza Station, Washington, D.C. 
20026-3489.

    Dated: January 6, 1999.
June Gibbs Brown,
Inspector General.
[FR Doc. 99-631 Filed 1-11-99; 8:45 am]
BILLING CODE 4150-04-P