1995.04.07: Doctors Face Legal Action for Excess Charges

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Date: April 7, 1995
FOR IMMEDIATE RELEASE 
Contact:  Anne Verano, HCFA  (202) 690-6145

Doctors Face Legal Action for Excess Charges

The federal Health Care Financing Administration is notifying certain physicians they may face heavy fines and be dropped from the Medicare program for repeatedly overcharging Medicare beneficiaries.

"This is the beginning of a major enforcement initiative aimed at physicians who appear to have knowingly, willfully and repeatedly collected greater amounts than the law allows from Medicare beneficiaries," said HCFA Administrator Bruce C. Vladeck.

According to HCFA records, the physicians disregarded many notices that they had overcharged Medicare beneficiaries and failed to make refunds to those patients.

Letters from HCFA Chief Counsel Darrel Grinstead gave the doctors a 30-day deadline by which to respond to findings that they have histories of exceeding the charge limits set by law.

If they do not demonstrate that the findings are in error, the physicians must within the 30 days:

Explain to HCFA's satisfaction the steps they are taking to correct their billing practices to avoid future violations of the law, and
Provide the Medicare program with evidence that refunds have been made to the Medicare beneficiaries who were overcharged.

Medicare claims data indicate that certain doctors exceeded the copayment charge limit hundreds of times since 1992 and owe Medicare beneficiaries refunds amounting to thousands of dollars.

The doctors could be suspended from the Medicare program for five years and face monetary penalties, including fines of $2,000 for each offense and an assessment of twice the amount of the Medicare payments claimed by the doctors in those cases that exceed the charge limit.

For doctors' services, Medicare pays 80 percent of amounts listed in the Medicare physician fee schedule. Medicare "participating physicians," who accept fee schedule amounts as full payment for their services, bill patients for the remaining 20 percent.

The Omnibus Budget Reconciliation Act of 1989, which established the Medicare physician fee schedule, established the limit on amounts that may be charged by physicians. As of 1993, non-participating physicians may not charge more than 115 percent of the fee schedule amounts. The HCFA enforcement effort is targeted on doctors who violate that limit.

Medicare carriers -- contractors who process and pay claims for Medicare -- promptly notify physicians when they have overbilled beneficiaries and direct the doctors to refund excess charges, as required by law.

Vladeck said less than one percent of all Medicare claimssubmitted by physicians show that charge limits are exceeded. The notices sent by carriers usually cause doctors to take whatever corrective action is needed in their billing practices and make the appropriate refunds.

"Our experience indicates that most physicians want to comply with the law," Vladeck said.

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