America’s healthcare system is often described as a patchwork: a mix of public programs, private insurance, and stopgap laws meant to catch people before they fall through the cracks. But what happens when several of those safety nets are weakened or removed all at once?

With the OIG’s May 30, 2025, announcement that they are seeking $454.4 million in funding to fight healthcare fraud, healthcare providers can expect increased governmental scrutiny despite Trump’s budget cutbacks and staff layoffs.  The OIG justifies its budget request by pointing out that for every $1 invested, there is an expected return of $11 in government recoveries and receivables, which fuels the Trump administration’s fight on fraud, waste, and abuse in health care. What this means for health care providers is intensified scrutiny and likely use of AI as a tool to evaluate big data to identify potential false claims, fraud, outliers, etc. Considering the OIG’s 90-page new General Compliance Guidance, healthcare providers’ self-policing strategies and internal audits are more important than ever as the heat turns up on alleged fraud and false claims.

In mid-February 2019, the Centers for Medicare and Medicaid Services (“CMS”), Innovation Center and the Department for Health and Human Services (“HHS”) announced a ground-breaking payment and medical services initiative for ambulance providers called “Emergency Triage, Treat and Transport” (the “ET3”). This new model is the first step in allowing providers of Emergency Medical Services to finally “take off the gloves” to fully utilize both their medical skills and unique patient knowledge to implement a more efficient and effective care model.

Since the implementation of House Bill 1 in 2012, the restrictions on prescribing controlled substances have become more and more stringent, which is a response to the opioid epidemic sweeping Kentucky and the nation. The Cabinet for Health and Family Services, the Kentucky Board of Medical Licensure, the Kentucky Board of Nursing, and the Kentucky Board of Pharmacy are vigilant in policing prescribing practices and have tools through KASPER to closely monitor the prescribing practices of physicians and other practitioners. With the addition of new medications like Gabapentin to the controlled substances hit list, practitioners must be particularly careful to ensure that their prescribing is consistent with regulatory requirements, particularly when patients have been on this medication previously.   Physicians and practitioners must continually monitor compliance as even a minor violation can give rise to investigations, complaints and regulatory penalties.  Assessment of regulatory penalties, even when characterized as “Agreed Orders,” can have devastating consequences for physicians and practitioners’ practices and ability to maintain provider contracts, including Medicare and Medicaid.

Billing for medical services is never easy. Despite attempts by the Centers for Medicare & Medicaid Services (“CMS”) to simplify the rule regarding “incident to” billing for Medicare services, it remains misunderstood by a large swath of providers. This proves problematic, as incorrect billing practices may lead to overpayments and False Claims Act violations. Billing for “incident to” services is an important mechanism to reflect the actual value of mid-level services provided under the specific plan of a physician. When properly followed, the “incident to” rules allow physicians to bill for services provided by non-physician practitioners as if they were performed by the physician at physician reimbursement rates. Additionally, the non-physician provider can be an employee, an independent contractor or even a leased employee, provided that they are supervised by a physician and the requirements are met. Because of the confusing nature of allowing a physician to bill for services he or she did not directly provide to the patient, serious landmines exist that can create problems if the rules are not scrupulously followed and documented.

In December, the Centers for Medicare and Medicaid Services (“CMS”) released its “Supplementary Appendices for the Medicare Fee-for-Service 2015 Improper Payments Report,”[1] an annual compilation of statistics from investigations into overpayments and other instances of fraud, waste and abuse in Medicare payments. What should shock Kentucky providers is that Kentucky has the seventh highest percentage of projected overpayments at 15.4%, or $897.7 million.[2] More than one out of every seven Medicare fee-for-service payments made in the Commonwealth is projected to be an overpayment in 2015, yet many of these problems could have been avoided by following one simple rule: document claims properly.

It was nice while it lasted – due to a provision of the Patient Protection and Affordable Care Act (“ACA”), services furnished by certain primary care providers (“PCPs”) were subject to an enhanced payment rate for Calendar Years 2013 and 2014. These PCPs had to have (a) been Board certified in the specialty designation of family medicine, general internal medicine or pediatric medicine or have a subspecialty designation recognized by specific boards or associations, or (b) furnished more than 60% of claims in specific evaluation and management or vaccine administration services under certain codes to have been eligible for these enhanced payments.[1] The payments were raised to the level of the Medicare Part B fee schedule rate (unless the actual billed charge for the service was lower), and providers had until April 1, 2013 to self-attest to being eligible.[2] The increase applied to both fee-for-service and managed care Medicaid plans.

In July of 2014, Kentucky Medicaid established an Alternate Payment Methodology (“APM”) for all Federally-Qualified Health Centers (“FQHCs”) and Rural Health Clinics (“RHCs”) as an alternative to the all-inclusive encounter rate per patient under the standard prospective payment system (“PPS”) of 42 U.S.C. 1369a(aa). The APM allows for qualified centers to be reimbursed at a rate of 125% of the 2014 Medicare Upper Payment Limit for RHCs in place of the PPS system ($99.75 per covered visit). There are more advantages to APM than meet the eye, however, and qualified centers currently using PPS method should at the very least reevaluate APM, as proposed changes will make APM even more attractive and potentially risk-free.

As Kentucky’s Senate Bill 192 highlights, coverage and treatment of substance abuse problems is dramatically changing as the current penal model is slowly being replaced with a treatment model. Even terminology for what has been called "drug addiction" is now referred to as a "substance disorder" problem. Behavioral health has become the new catchall name for both mental health and substance disorders. As substance disorders become medical problems rather than drug abuse problems, the Federal Mental Health Parity Act and the Affordable Care Act now mandate that substance disorders and mental health problems, which often go hand in hand, must be covered by health insurance just as medical problems are covered. As of January 1, 2015, these illnesses must also covered by Medicare and Medicaid. Paving the road for coverage, however, has not been easy as a wealth of new federal and state government regulations are creating a complicated framework with a host of changes for behavioral health providers. While Kentucky struggles to provide and pay for services for the 150,000+ new Medicaid beneficiaries, these new laws and regulations significantly affect not just behavioral health providers, but also employers as the struggle to treat individuals who suffer from these maladies is addressed.

It can be an intimidating experience to be sure... A DEA agent or Diversion Investigator, on an unscheduled visit to your office, confronts you with a KASPER, a KBML complaint or some other state regulatory action and alleges violations of the Controlled Substances Act. The DEA Agent then asks you to sign DEA Form 104. This form, which is titled “Voluntary Surrender of Controlled Substances Privileges,” is placed in front of you while the agent explains why you should sign it immediately, rather than face potential action to revoke your DEA and other adverse consequences. The DEA Agent tells you that you are already in deep, deep trouble (of a vague and unspecified nature), and that the simple act of signing this form can make your troubles go away and prevent federal action. Also, he tells you that all you have to do to get the number back is to reapply! Hold on...this is not the full story! This scenario is becoming a harsh reality and common situation for physicians, pharmacists, nurse practitioners, and PAs.