MedAxiom Blog
Monday, April 21, 2025 | Jaime Warren, ED.D., MBA, BHS, CNMT, NCT
Illustration by: Lee Sauer
It started like any other day for these cardiology practices—patients on the schedule, diagnostic tests lined up, and claims submitted to Medicare. However, questions arose regarding how provider acquisition costs for diagnostic radiopharmaceuticals were being reported versus the Centers for Medicare and Medicaid Services's (CMS's) reimbursement methodology. Over time, these discrepancies led to a $17.7 million settlement with the Department of Justice (DOJ) under the False Claims Act (FCA).
So, what exactly went wrong? More importantly, how can cardiology practices stay compliant and avoid finding themselves in a DOJ press release?
The Breakdown: What Happened?
Recent headlines have highlighted enforcement actions involving cardiology practices and Medicare billing compliance. While every case is unique and settlements do not equate to wrongdoing, these situations underscore the importance of accurate reporting and adherence to reimbursement guidelines. In this instance, federal authorities alleged that certain providers reported acquisition costs for diagnostic radiopharmaceuticals in a way that was inconsistent with Medicare’s reimbursement requirements, leading to overpayments. This matter, which spanned 13 states and Washington, D.C., serves as a reminder of the complexities surrounding compliance and billing transparency.
Medicare Part B reimburses healthcare providers for diagnostic radiopharmaceuticals based on their acquisition cost — the actual amount paid by the provider. This cost must be supported by invoices and documentation that align with regulatory requirements. Discrepancies in reporting can lead to audits and regulatory reviews. While Medicare Administrative Contractors (MACs) provide guidance on proper reporting, these cases highlight the importance of internal oversight and proactive compliance measures.
Understanding the Violation
For those unfamiliar with medical billing and coding, it’s essential to understand how reimbursement works. Medicare reimburses providers based on the actual cost of the drug or diagnostic radiopharmaceutical they purchase. Providers are required to submit their invoices to show the amount they paid. If a provider inflates these costs, they are effectively requesting reimbursement for money they never actually spent. This is considered fraudulent because it leads to Medicare overpaying and misallocating taxpayer dollars.
Think of it like a travel reimbursement policy. If your employer reimburses you for airfare and you paid $300 for a ticket but claimed it cost $500, you would be pocketing an extra $200 fraudulently. In the case of Medicare, this type of behavior, when scaled across multiple providers and over several years, results in millions of dollars in false claims.
The Legal Stakes: FCA Violations
The FCA is a key mechanism used by the government to enforce compliance in federal healthcare programs. Under the FCA, knowingly submitting false claims for reimbursement to government programs (like Medicare) can lead to treble damages – meaning practices could be on the hook for three times the amount fraudulently claimed – plus additional penalties.
For the 16 practices involved in the settlement, the financial impact totaled $17.7 million. But beyond the financial hit, FCA violations come with long-term damage:
- Reputational Harm: Patients, payers and referring providers may lose trust.
- Exclusion From Federal Programs: Practices could be barred from participating in Medicare and Medicaid.
- Legal and Operational Costs: Even beyond the settlement, legal defense fees and compliance overhauls are costly.
- Increased Regulatory Scrutiny: Once a practice has been flagged for fraudulent activity, it often faces increased oversight and audits in the future.
How Can Cardiology Practices Stay Compliant?
This case highlights the importance of proactive compliance measures for cardiovascular imaging programs. Here’s how to ensure your practice doesn’t end up on the wrong side of a DOJ investigation:
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Understand Medicare’s Reimbursement Rules |
Medicare provides clear guidance on how providers should report their acquisition costs. Every practice billing for diagnostic radiopharmaceuticals should:
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Conduct Internal Audits |
Regular compliance audits can help detect and correct billing issues before they escalate.
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Foster a Culture of Compliance |
Fraudulent billing doesn’t happen in isolation. Often, it stems from a lack of proper oversight, insufficient training or ambiguous billing policies. For example, a cardiology practice might unintentionally overbill due to confusion over proper coding, while another might face pressure to inflate costs to meet financial targets. Addressing these vulnerabilities through clear compliance policies and routine audits can help practices stay on the right side of regulations. It often results from a culture where shortcuts are tolerated. Building a compliance-first mindset includes:
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Stay Ahead of Regulatory Changes |
Medicare regulations evolve frequently, and staying compliant requires vigilance. For instance, in recent years, CMS has tightened reporting guidelines for diagnostic imaging reimbursements, requiring providers to document not just the purchase price but also any discounts, rebates or bundled pricing adjustments. Practices that fail to adapt to these changes risk compliance violations and financial penalties. Practices should:
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Leverage Technology for Billing Accuracy |
Modern compliance tools and artificial intelligence (AI)-driven billing software can help mitigate human error and improve adherence to regulations. These tools can:
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The Bottom Line
The DOJ’s enforcement action against these cardiology practices isn’t just a headline – it’s a cautionary tale. Inaccurate reporting of acquisition costs, even if unintentional, can lead to significant financial and regulatory consequences.
Practices that prioritize compliance in their daily operations are better positioned to navigate regulatory scrutiny. They train their teams, audit their processes, and take Medicare’s guidance seriously.
If this case teaches us anything, it’s this – when in doubt, ask questions. Double-check your numbers. And most importantly, don’t take shortcuts with Medicare billing. The consequences simply aren’t worth it.
Resources for Staying Compliant
Want to dive deeper into Medicare billing regulations and compliance best practices? Here are some essential resources:
- DOJ Press Release on the Case: DOJ Announcement
- Medicare Billing Guidelines: CMS Provider Compliance Resources
- MAC Contacts: Find Your MAC
- MedAxiom Compliance and Billing Support: MedAxiom has a dedicated team of experts who can assist practices with reviewing billing, coding and operations. For example, a practice struggling with compliance issues may benefit from a full operational review that identifies areas of risk and provides corrective action plans. MedAxiom’s team has successfully helped numerous practices enhance their documentation processes and implement proactive compliance measures. Learn more:
- Care Transformation Services: From maximizing your revenue cycle to developing a telehealth strategy and redesigning your compensation model, MedAxiom’s team of cardiovascular-specific experts can help you thrive in the ever-changing healthcare environment.
- Revenue Cycle Solutions: As cardiovascular-specific experts, the MedAxiom Revenue Cycle Solutions team is your premium coding, billing and reimbursement resource. Our comprehensive services will assist your organization with identifying opportunities to maximize quality, efficiency, and revenue collection.
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