On February 25, 2019, the U.S. Department of Justice (DOJ) announced a settlement with a urology group practice to settle allegations of False Claims Act (FCA) violations tied to the alleged submission of improperly unbundled Medicare claims. The pursuit and settlement of this FCA suit by the DOJ represents at least the second recent enforcement action targeting allegations of improper unbundled billing of services to Medicare, and may therefore indicate heightened governmental interest in those billing practices. See here for our analysis of the previous unbundled billing case.

Under the terms of the settlement, the group practice (known as Skyline Urology) agreed to pay the United States $1.85 million, and to enter into an Integrity Agreement with the U.S. Department of Health and Human Services’ Office of Inspector General. This Integrity Agreement requires regular monitoring of Skyline Urology’s billing practices for three years.

The suit arises from the group practice’s alleged submission of separate claims for reimbursement of evaluation and management (E&M) services on the same day that another medical procedure was furnished. According to DOJ, such claims may constitute false claims because Medicare generally prohibits health care providers from separately billing for E&M services provided on the same day as another medical procedure unless the E&M services are significant, separately identifiable, and above and beyond the usual preoperative and postoperative care associated with the medical procedure. Where those criteria are met, a provider can use the “Modifier 25” billing code to bill separately for certain E&M services.

DOJ alleged that the group practice routinely used Modifier 25 over a three year period to “improperly unbundle routine E&M services that were not separately billable from other procedures performed on the same day” and thus to improperly claim Medicare reimbursement for certain urological services.

The recent DOJ FCA settlements arising from allegations of improper unbundled billing suggest that the government may be looking closely at these billing practices and the use of certain modifiers. Providers would therefore be well-advised to review and confirm that their billing and collections policies and procedures are consistent with federal fraud and abuse guidance.