Direct Supervision Failure Leads to False Claims Act Violation in Shore Health Settlement

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The settlement involving the University of Maryland Shore Regional Health (Shore Health) in Easton, Maryland, as announced by the U.S. Department of Justice (DOJ) on May 17, 2022, serves as a significant reminder of the importance of compliance with federal healthcare regulations, especially concerning Medicare billing.

According to the DOJ's announcement, Shore Health agreed to pay nearly $300,000 to resolve allegations that it violated the federal False Claims Act. These allegations stem from improper billing practices linked to radiation therapy and diagnostic services provided to Medicare patients between January 16, 2014, and July 5, 2018.

The crux of the issue lies in the requirements for Medicare coverage for radiation therapy and diagnostic services, particularly when these services are furnished in an outpatient setting. Medicare stipulates that such services must be rendered under the "direct supervision" of a physician. This means that while the physician does not need to be in the room during the procedure, they must be immediately available to offer assistance and direction throughout its performance.

However, the settlement agreement revealed that during the specified period, Shore Health billed Medicare for services that did not meet this criterion of direct supervision. It was found that the sole supervising physician at Shore Health was often engaged in uninterruptable procedures at another location, thus failing to provide the required supervision for the billed services.

This case initially came to light thanks to a whistleblower, a former employee of Shore Health, who brought the lawsuit forward. Whistleblower provisions in federal laws, such as the False Claims Act, empower individuals to file actions on behalf of the government and share in a portion of the recovered funds.

This settlement underscores the critical need for healthcare institutions to meticulously adhere to Medicare's rules and regulations. The integrity of federal health care programs like Medicare, which are funded by taxpayer dollars, is of utmost importance. The DOJ's action in this case reflects its commitment to protecting these programs from fraudulent claims and ensuring that healthcare providers meet their legal and ethical obligations in billing practices.

For healthcare providers, this case highlights the necessity of having robust compliance programs in place. These programs should not only ensure adherence to billing regulations but also foster an environment where employees feel comfortable reporting potential issues. Regular audits, training, and clear communication channels for reporting concerns can play a significant role in preventing similar incidents.

In conclusion, the Shore Health settlement is a poignant reminder of the responsibilities healthcare providers bear in the administration of federally funded health care programs. Maintaining compliance with these programs' regulations is not just a legal requirement but also a crucial element in upholding the trust and safety of patients and the public at large.