Although for most Medicare entities, the maintenance of an effective compliance program is not mandatory, the absence of an effective compliance program is foolhardy. Halfhearted attempts at compliance can also create liabilities. This was dramatically demonstrated in the case of United States and State of Wisconsin, ex. rel Keltner v. Lakeshore Medical Clinic, Limited. Here, the whistleblower former employee brought a suit against a large multispecialty medical group for false claims on a host of bases, many of which were dismissed. But her allegations on evaluation and management services survived. The predicate for her claim was that an annual internal audit of 25 claims per physician demonstrated that two physicians had each up-coded more than ten percent of their claims. The employee alleged that even though the medical group returned overpayments related to their specific claims found to have been up-coded, the non-audited claims were not reviewed. She further alleged that the medical group subsequently stopped engaging in review of E/M services codes. Neither the United States nor the State of Wisconsin chose to intervene in the action. Nonetheless, the court refused to dismiss the case, focusing on the group's ignoring audits which disclosed "a high rate of upcoding." The court went on to say, "These allegations plausibly suggest that the medical group acted with reckless disregard for the truth." While many physicians wonder what reckless disregard might mean, this is one of the few cases that has actually confronted the issue.

The case is noteworthy in that it focused around an organization that engaged in self-audits. This puts a premium on taking compliance seriously, as we have noted previously [See also links: #3; 51; 48; 45; 42; 33]. This case raises some significant issues with regard to how groups should interpret what they find on self-audits. With the new liability for false claims for failure to return overpayments within 60 days of their identification, more of these cases are likely to occur. It would also be important to focus on the OIG's Work Plan as we explain in our article, "May you never meet the OIG: The Work Plan." In updating your compliance plan, it is also time to include quality-based issues as Alice describes in "Quality fraud: Two pathways to trouble." While there are still no final regulations under the 60-day repayment rule, prudent practitioners will revisit their compliance programs and will seek legal counsel in evaluating the significance of what is learned on probe audits and more extensive self-audits.