In a July 2014 news release, the Department of Justice announced the guilty plea of a Florida podiatrist to one count of healthcare fraud for billing Medicare falsely for Micro-vas treatments. At issue were the podiatrist’s claims to Medicare for therapy services that were non-covered, were incorrectly coded as physical therapy, and were coded as the doctor performing the service when he had not.

Micro-Vas is a trademarked device that provides deep penetrating electrical stimulation for areas of compromised circulation to increase circulation and promote healing. The device is specifically marketed for the treatment of diabetic neuropathy. However, Medicare and other payers as well, have limited payment for its use to certain circumstances. Medicare allows electrical stimulation only for the treatment of chronic Stage III or Stage IV pressure ulcers, arterial ulcers, diabetic ulcers and venous stasis ulcers.

Medicare excludes electrical stimulation as an initial treatment modality, and the treatment will only be covered based on the following requirements:

• Wound care therapies have been tried for at least 30 days with no measurable signs of healing
• When electrical stimulation is covered, a physician must evaluate the wound no less than every 30 days
• Medicare requires electrical stimulation therapy be discontinued when the wound demonstrates a 100% epithelialized wound bed.

What payers have to watch for, is when a provider attempts to circumvent the payer’s rules and engages in creative coding. As in the Florida example, a provider may bill this treatment as standard physical therapy sessions. Or, as in a Washington state jury trial finding a physician guilty of health care fraud violations in connection with Micro-Vas treatments, among other allegations, the physician may falsely bill these treatments as office Evaluation and Management (E/M) claims.

Payers can detect these kinds of fraudulent schemes by analyzing trends in billing and referring aberrant claims to their Special Investigations Unit. Trends that may be useful to watch in terms of this billing scheme are the following:

1. Excessive E/M visits per day
2. Patients with excessive procedures or E/M visits for certain time frame
3. Repetitive billing of denied procedure codes
4. Physical therapy codes billed by non-physical therapy providers.

To help identify fraud the Context⁴ Healthcare Fraud, Waste and Abuse (FWA) Module of FirstPass^TM starts with real-time claims analysis during the adjudication cycle, while you’re still calculating your claim liability. FirstPass^TM contains thousands of rules consisting of millions of editing combinations, many of which are designed to identify potential FWA conditions.

 Additionally, the rules include evaluation of billed charges against our proprietary national Usual, Customary & Reasonable (UCR) fee schedule to find claims with charges out of the national norm for a service. These claims are identified and brought to your attention for follow up. As claims are processed, the FirstPass^TM FWA Module ensures that claims meet one or more of our potential FWA rules and alerts your processors to the situation so further analysis and investigation can begin.

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