Clinical Competence an Important Factor in Some Litigation Success…

Among the worst things that can happen to a medical practice is being sued by a reimbursement source to recoup funds.  If that lawsuit alleges fraud and/or any type of misrepresentation, the only resolutions are:

  1. Admitting guilt to a deliberate effort to obtain funds under false pretenses, or
  2. Fight by demonstrating that every billing was medically sound and represented actual medical services rendered after an examination led to a physician’s sound judgment.


The medical judgment issue may not be as large of a concern.  When based on numerous diagnostic criteria, a physician’s judgment is generally respected unless it falls significantly outside of what is considered best practices by his/her peers.  Where the problem comes in is when the medical claim cannot be substantiated by facts associated with diagnostic testing and physician evaluation.

Let’s say all of that is present and a worker’s compensation or maybe an auto insurer sues a medical practice alleging they were overbilled.  This is when the time comes to get in fight mode.  The discussion cannot be about a biller’s intentions nor the feeling of agony such a proceeding can create.  This is unproductive and is not an effective strategy to win.  Further, a biller bills what is indicated has been provided but cannot speak under oath to the medical legitimacy of their work when not a medical professional.

At this point it is time to audit every claim that is the subject of the litigation and prove one by one the medical legitimacy of every service rendered.  In this way there is a case for refuting any claims of overpayments or undeserved payments.  The goal must be to demonstrate with conclusive proof that the medical services were legitimately rendered.  If not, a pattern of seeking reimbursement for illegitimate or non-performed services will dominate the discussion.

This is especially true in a RICO case.  Passed in 1970, the Racketeer Influenced and Corrupt Organizations Act (RICO) is a federal law designed to combat organized crime in the United States. It allows prosecution and civil penalties for racketeering activity performed as part of an ongoing criminal enterprise.

A civil RICO plaintiff cannot simply allege garden-variety fraud. It must allege the following three things: The defendant committed a substantive RICO violation per 18 USC Section 1962. The plaintiff’s business was injured. The injury occurred by reason of the defendant’s substantive RICO violation.

All the foregoing can be alleged when an insurer says they paid you what you did not deserve to receive.  If they establish it occurred over a semi-lengthy period of time, the label of “criminal enterprise” can be made to stick.  What is worse is when the matter gets the attention of the criminal division of the U.S. Justice Department and/or results in disciplinary action against the physician’s privilege to practice medicine.

During these events it is not time for an unproductive exchange with the medical biller, who typically is not a medical professional and likely not an educated, credentialed healthcare administrator or claims examiner.  It is time to fight with an answer for every dime received.

The audit division of Direct Care Training & Resource Center, Inc. contributes to this process as a complement to the work of legal professionals.  Without it, winning against such litigation is at best, a distant if not nearly impossible reality.


Another Blog Post by the audit division of Direct Care Training & Resource Center, Inc.  For more information, please reach out to us via the Contact Us page at

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