Medical Reimbursement Systems: The TRICARE Bonus Claimed After an Internal Warning

In the Medical Reimbursement Systems TRICARE settlement, the billing company agreed to pay $500,000 under the False Claims Act over false bonus claims for a physician group in Watertown, New York. An employee had warned a vice-president that the practice did not qualify, then repeated the warning the following week. The company kept claiming the bonus and later accepted responsibility for the facts in the settlement agreement.

The Justice Department announced the resolution on January 21, 2016. The Massachusetts company provided billing, coding, compliance and revenue cycle services to hospitals and physician practices. For someone inside a billing operation, the telling detail is what management did after that warning reached it.

What the TRICARE Shortage-Area Bonus Paid For

The bonus paid extra to encourage care in qualifying shortage areas. TRICARE serves active-duty and retired service members and their families, among other eligible beneficiaries.

Health Professional Shortage Areas can be geographic areas, population groups or facilities with too few health care providers. This bonus depended on qualifying geography: physicians providing covered services in geographic HPSAs received an additional 10% above ordinary Medicare professional-service reimbursement. Providers treating TRICARE beneficiaries could receive the bonus in geographic areas that qualified for it under Medicare.

Getting the bonus required the biller to certify that services were rendered in a qualifying HPSA. That put a statement about location inside the request for government money. In this case, the company continued making that certification after being told the practice was outside the qualifying area.

A 2020 paper in the Journal of Forensic and Investigative Accounting, A Forensic Accountant’s Guide to the Most Potent Federal Laws Used Against Healthcare Fraud, explains how false claims can arise from knowingly false certifications about payment requirements, even when the care actually took place. That distinction helps explain this case: the certification told TRICARE that the practice qualified for extra money because of where it delivered care. The employee’s warning addressed that very condition.

The Warning Reached a Vice-President

MRS entered the billing-services agreement in May 2009, and the internal warning reached its vice-president that year. The company and its client began discussing bonus eligibility soon after the relationship started. A company employee wrote to its vice-president explaining that they were billing TRICARE as though the practice were in a qualifying geographic area when it was not.

The following week, the employee reiterated that the practice did not qualify. The message to the vice-president contained a direct warning:

MRS continued billing TRICARE for the bonuses through October 2014, at the practice’s request. The company sold compliance services. We would expect its own employee’s warning to count for something. The warning and the claims that followed belong in the same account of management’s decisions.

The Billing Company Had a Share in Collections

MRS’s contract covered coding, billing, physician education and data entry. Its compensation formula gave the company a percentage of its net collections from the practice. The company making the certification therefore had its own financial interest in the money collected. That gives an insider another part of the story alongside the certification itself: who stood to earn from money coming in.

A separate billing-company case shows how much can happen between the physician’s work and the submitted claim. In the Medical Business Service settlement, the government alleged that a radiology biller changed diagnosis codes on denied claims to bypass Medicare and Medicaid coverage restrictions. The alleged substitution occurred in the billing process, where someone could compare the original diagnosis, the denial and the code sent back to the payer.

MRS’s case centered on a different representation: eligibility for the geographic bonus. Both cases put the intermediary’s own claim-making decisions in view. A billing employee may know what was changed or certified even when the physician’s clinical work is elsewhere in the business.

What MRS Accepted and Agreed to Change

MRS accepted responsibility for the facts set out in the settlement agreement. It acknowledged that seeking HPSA bonuses for this practice was inappropriate under the circumstances. The resolution also required changes to the people overseeing its billing work.

The company agreed to hire an outside consultant to conduct TRICARE-specific billing training for staff. It also agreed to appoint a new compliance officer with appropriate training or certification, reporting directly to the chief executive officer and responsible for compliance with federal healthcare program requirements. That reporting line matters in a case where an employee had already brought the problem to a vice-president: the remedy put billing compliance directly before the company’s chief executive.

The United States Attorney’s Office for the Northern District of New York worked with the Defense Criminal Investigative Service and the Defense Health Agency on the civil resolution. The office had resolved fourteen HPSA-bonus matters since July 2015, returning $2,947,322 to TRICARE across those cases.

What Evidence Does a Whistleblower Need?

For this kind of bonus claim, the evidence connects the practice’s location and eligibility to the certification, the internal warning and the claims submitted afterward. The billing agreement adds the company’s responsibilities and how it was paid. The employee’s message adds who was told the problem and when, making it possible to compare management’s notice with the billing that followed.

Those are the connections our whistleblower experts examine with someone who knows the billing operation. An instruction from the client, a message to management and the claim history can tell different parts of the same story. We work with you to understand how those parts fit and where the government money went. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

When the Warning Was Yours

If you raised a bonus-eligibility problem and watched the claims continue, speak with our whistleblower experts about what happened after your warning. We build your strongest case with you, bring in whistleblower lawyers who know TRICARE and Medicare bonus billing, and stay beside you as the case moves forward.