Beware of inaccurate documentation and HIPAA ‘trap’

In November 2012, John Natale, MD, of Chicago, a cardiothoracic and vascular surgeon, went to federal prison on charges related to the care of Medicare patients who had aortic aneurysms. The federal court of appeals in Chicago rejected his appeal last June, and earlier this year, the Supreme Court declined to grant review. The case bears examination because the statute Natale was convicted of violating is broad, reaching not only the care of Medicare and Medicaid patients, but also the care of virtually all privately insured patients.

Natale was convicted under Section 1035 of Title 18 of the United States Code. Under this section, it is a federal felony to make a false statement, conceal a fact or make or use a false writing in “any matter involving a health care benefit program.” The definition of a “health care benefit program” is sweeping and does not require that either the care provided or the patient’s insurance coverage have any connection to any federal, state or local government.

Section 1035 was enacted as part of HIPAA in 1996. It was modeled on a false statement statute, 18 U.S.C. § 1001, that dates back to the New Deal and is similar to Section 1035, except that Section 1001 applies only if the conduct occurred in a matter within the jurisdiction of the federal government. Section 1001 is often used to prosecute alleged lies designed to cover up acts that prosecutors might not be able to show were criminal in themselves. Martha Stewart is one public figure who in recent years was tripped up by Section 1001 in such a situation.

 

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Lawrence H. Brenner

In the words of criminal defense attorney and author Harvey Silverglate, Section 1001 is “a remarkable trap,” in part because one does not have to be under oath to violate it. Prosecutors have only recently begun to bring a significant number of cases under the HIPPA provision modeled on Section 1001, but the Natale case shows that the HIPAA provision similarly could become a formidable trap in the medical field.

Natale performed vascular surgery at an Illinois hospital and specialized in the treatment of aortic aneurysms. If an aneurysm repair involves the renal arteries, as opposed to a tube graft below the renal arteries, it is a more complex procedure, and Medicare allows for a higher level of reimbursement. The federal government alleged Natale made false statements in medical records to make it appear he had repaired aneurysms involving the renal arteries, and that he used the Medicare billing code for such repairs, when he had only performed simple repairs below the renal arteries using tube grafts.

Natale had come under scrutiny after a competing surgeon at another hospital reviewed the postsurgical CT scan of one of Natale’s ex-patients and concluded that it did not match the procedure described in Natale’s operative report. This surgeon reported Natale to the hospital review board.

Legal proceedings

After an investigation, Natale was charged with committing health care fraud, by falsely asserting in one operative report that the patient’s aneurysm extended to the renal vessels and that he dissected the patient’s renal vessels, and in another operative report that he cut out a button of the patient’s right renal artery tissue and sewed it to a portion of a graft, and by submitting Medicare claims for both patients using the billing code for repairs involving the renal arteries. The same allegations about the second patient were the basis for a charge of mail fraud as well. Finally, Natale was charged with two violations of Section 1035 of HIPAA. One charge alleged that he made false statements in operative notes dictated after the surgery on the first patient, including statements that the patient’s aneurysm “extended to the renal vessels” and “buttons of the right as well as the left renal vessels were excised.” The other charge alleged that he made false statements in operative notes dictated after the surgery on the second patient, including references to “reimplantation of right renal artery to graft” and cutting out “a button of the right renal artery tissue” and sewing it to a portion of the graft.

Natale testified in his own defense at a jury trial in federal court in Chicago. He admitted that his operative reports and notes contained inaccuracies, but he maintained that they were innocent mistakes. Natale explained that as one of the busiest cardiovascular thoracic surgeons in his area, he dictated as many as 100 operative reports at a time, sometimes several weeks after surgery. Although he acknowledged that his grafts did not extend above the renal arteries, Natale asserted that the aneurysms were just below the renal arteries, i.e., juxtarenal, and that he had learned the technique he used (which involved folding over the weakened aortic wall to double its thickness) as a resident at the Rush Presbyterian Hospital in Chicago.

Paul Mogin

Cyrus Serry, MD, who had been an attending physician when Natale was a resident, corroborated the existence of the so-called “Rush technique” for aneurysm repair, and said it was more complex than the standard repair for aortic aneurysms. Natale explained that, because there was no Medicare billing code for that technique, he used the Medicare billing code for the procedure that most closely resembled what he had done, in keeping with the instructions he had received in Medicare training sessions.

Natale’s explanation about the billing code apparently resonated with the jurors. They acquitted him on all three charges alleging health care fraud or mail fraud; but the jurors reached a different conclusion about the charges under Section 1035 of HIPAA. There were apparently too many untrue statements in the operative notes for the jurors to believe Natale had simply made innocent mistakes in describing the surgeries, as he had asserted in his testimony. They found Natale guilty on both Section 1035 charges. He was sentenced to 10 months in prison and a $40,000 fine. Supported by an amicus curiae brief of the Association of American Physicians and Surgeons, Natale appealed to the federal court of appeals in Chicago, but to no avail.

Analysis and discussion

A former federal prosecutor who specialized in prosecuting alleged health care fraud has pointed out that “the conduct at issue in many health care fraud cases is not suspicious, much less inherently nefarious.” For example, billing requirements can be confusing; an analysis of enforcement efforts against health care fraud co-authored by another former prosecutor acknowledged that “there are many uncertainties about the billing requirements imposed on providers, and doubtless, there are instances when well-meaning individuals with billing responsibilities are simply unable to parse these complexities.” Such uncertainties can make it difficult for prosecutors to obtain convictions. The Natale case shows, however, that a health care provider who makes false statements can make a prosecutor’s job easier.

Since the Watergate scandal, it has been said that the cover-up is worse than the crime. Often, people who might be able to successfully defend their conduct dig graves for themselves while under investigation, by destroying or altering documents, lying or telling others to conceal information. The government can use a variety of laws to prosecute alleged cover-ups, including Section 1001, the model for the HIPAA statute used to convict Natale.

In Natale’s case, Section 1035 played a similar role to that often played by Section 1001. It was not Natale’s principal conduct in question, i.e., billing Medicare for the surgeries under the billing code for surgery on renal artery aneurysms, which put him behind bars. It was what he wrote in his operative notes to make it appear he had done surgical work he had not done.

In recent years, prosecutors have started bringing charges under Section 1035 more frequently. Like Section 1001, Section 1035 does not require that the statement be under oath. It applies under extremely informal circumstances, including statements in operative notes, in conversations with government agents or other employees, and even in conversations with investigators for private companies. Because many health insurance companies have their own investigative units, health care providers may face questions about their care even without any government investigation.

Although fraudulent claims for reimbursement are likely to remain prosecutors’ main focus, if a physician’s conduct draws a prosecutor’s attention (for whatever reason), a charge under Section 1035 based on an inaccurate statement, in a medical record or in another form, is possible. As the Natale case illustrates, prosecutors like to pursue multiple charges, resting on more than one statute, since that maximizes the chance of a guilty verdict on at least one count, if only as a result of a compromise among the jurors.

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Many physicians have no choice but to prepare a large volume of reports, notes, discharge summaries and entries in medical records, often under severe time constraints. Inaccuracies are inevitable. The burden of documentation is ever more complex and onerous, with new and expanded billing codes on the horizon. Although one would hope that rarely will a Section 1035 charge rest on inaccuracies in operative notes or the like, the case of Natale suggests the need for exercising vigilance and care in dictating and documenting accurately. Recent advances in electronic medical record-keeping will enhance the ability of government investigators to sift through records in greater detail.