Relaxed CMS Rules – A Pathway to Fraud

Posted on February 11, 2021

(This post was written by whistleblower attorney Shelby Serig.)

As the COVID-19 pandemic continues to shape our lives and dominate headlines, we face complicated public health challenges.  Authorities have struggled to strike a balance between meeting the needs of individual citizens and protecting the economic viability of our health system.    

Understandably, one of the government’s primary goals is to ensure that all Americans receive life-sustaining care if they contract COVID-19.  Ensuring access to care is not only the morally correct thing to do, but it also helps to control the spread of this dangerous virus.  In furtherance of expanding access to care and easing the burdens on the health care system, the Centers for Medicare and Medicaid Services (CMS) has opted to relax its stringent rules governing reimbursements.    

While loosening the rules may entail some short-term benefits, it also creates significant opportunities for fraud. Prior to the COVID-19 crisis and easing of the CMS rules, health care fraud already cost taxpayers billions of dollars annually.  With relaxed rules in place, unscrupulous health care providers will be subject to less scrutiny. Even law-abiding providers may be tempted to abuse CMS’ leniency, given the profits lost from the elimination of routine and elective treatments.  The resulting fraud will likely exceed that which our system is designed to detect.  

Given reduced CMS oversight, health care fraud is likely to be committed in several areas, beginning with overbilling for medical equipment and supplies.  This type of fraud will become more common because CMS has lifted auditing requirements for these expenses.  On one hand, loosening the rules makes it easier for providers to get supplies that patients need.  However, it also opens the door to a provider seeking reimbursement for supplies that patients do not actually need or use.  

Telehealth, or virtual doctor visits, present another avenue for expansive fraud.  While such services were rare prior to the outbreak, they have now become commonplace.  Before the pandemic, CMS required providers that delivered services remotely to use video livestreams, which were recorded for auditing purposes. Since the pandemic, those rules have been waived, making it nearly impossible to verify what telehealth services were actually provided.    

Another potential avenue for fraud is the handling of discharged hospital patients.  Normally, hospitals must provide discharged patients with options for continuing care – at rehabilitation facilities or nursing homes, for example. During the current pandemic, CMS no longer requires formal discharge procedures.  Granted, this rule change expedites the discharge process.  However, it also means that discharged patients are only directed to hospital-owned facilities, thereby financially enriching the hospitals.  

In this new climate where fraud is exponentially easier to commit, it is critical that those with knowledge of wrongdoing are willing to come forward.  Morgan & Morgan proudly represents whistleblowers who speak out against fraud. We strongly encourage prospective whistleblowers to obtain counsel to assess their claims and help them file their complaints. Healthcare laws and regulations can be difficult to understand and challenging to navigate. If presented with a valid claim, our team of experienced lawyers and investigators can assist you throughout the legal process, from the initial filing to resolution. Our work is always done on a contingency basis, meaning that we only get paid if you win.  If you know of a company or individual that has committed fraud, reach out to us. All inquiries are treated confidentially.