Shenanigans, Larceny, And Fraud Define The Corporate Practice of Medicine

Bob Campbell, MD, co-founder of Physicians Against Drug Shortages writes in:

I have been gathering a lot of information for a “Corporate Practice of Medicine” project. Not sure what will come of it if anything but some of the shenanigans are very harmful at times. At other times just simple larceny.

The federal court in Philadelphia has issued a new decision in Aetna v. Mednax/Pediatrix Medical Group, 2018 WL 5264310 (E.D. Pa. 2018) involving fraud allegations asserted by Aetna against Mednax, a pediatric private equity firm.

The federal court held that Aetna’s allegations regarding Mednax’ alleged fraud upcoding scheme could proceed in litigation. Aetna alleged that Mednax routinely listed CPT codes that exaggerated the care needed and performed by designating infants as being sicker than they truly were so that it appeared as if the infants required more intensive treatment than was truly the case. This process allowed Mednax to submit inflated bills to Aetna so that Aetna would reimburse Mednax for more money than was justified.

Aetna also alleged the upcoding scheme permeated Mednax’ operations. Mednax trained and required physicians to engage in upcoding and encouraged physicians to perform unnecessary services to support higher billing rates. Mednax also sometimes inflated the codes itself above the level indicated by the physicians before submitting the claim forms. Aetna obtained evidence from former employees of Mednax that were aware of the upcoding scheme.

The court ultimately held that the specific types of upcoding that allegedly occurred, such as listing an infant as requiring critical care rather than general hospital care, sufficiently established the legal basis for fraud.

The federal court also allowed the litigation against the private equity firm controlling pediatric/neonatal intensive care physicians to proceed far beyond the 2-year statute of limitations based upon the “continuing fraud violation doctrine.”

I just wanted to keep you apprised of additional developments in the fraud realm in the context of private equity firms and some of the concerns raised about driving profits improperly. This is literally in your backyard, but also involves an alleged nationwide scheme.

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