A Joint News Conference

Sebelius, Holder and Inspector General Daniel Levinson  recently held a press conference to discuss the new efforts of the Obama Administration to fight fraud using tools provided by the Affordable Care Act. At the event, the officials also released the new report on fraud prevention. If you missed it, you can watch the recorded event.


Sebelius described the act in no uncertain terms: “the ACA contains some of the strongest anti-fraud healthcare provisions in American history. So under this new law, we’re going to attack fraud at every single stage of the process.” The Secretary went on to describe several steps HHS is taking in partnership with the Department of Justice and the Inspector General, with both Mr. Holder and Mr. Levinson remarking on their successful efforts to date. The report released at the conference is filled with specifics, justifying all the money already allocated to the programs enacted since January 2009. And they’re only getting started.


More to Come


Recent reports have outlined many of the new efforts, noting that an additional $250 million  will be allocated toward fighting healthcare fraud during the next ten years. In the May 13 conference, however, Sebelius quoted a much higher figure. “Altogether, there’s a proposed $600 million over the next 10 years,” she said, evidently all aimed at improving program integrity and enforcement efforts. If approved, that would represent almost  2.5 times the original figure.


Most of the efforts discussed in the report and during the news conference  targeted criminal fraud perpetrated against Medicare and Medicaid. However, a couple of the improvements being made by HHS likely will make the reimbursement process more “interesting” – to say the least – for the typical healthcare provider.


Two Important Points to Consider


First, Sebelius mentioned a new data system being prepared and described its purpose and mission: “we’re going to make it easier for law enforcement to see healthcare claims data from different government agencies, in one place at one time… helping them to identify suspicious patterns in claims data that can indicate fraud at the outset.” The intent appears to be to get away from performing only post-payment audits and to get as close as possible to real-time or even pre-payment audits, if feasible. Of course, this also would make it easier for providers to make fewer errors and not have to worry as much about erroneous overpayments. Nevertheless, this certainly provides ever more scrutiny of provider claims.


Second, Levinson mentioned that there would be new requirements made of providers. “I’d like to underscore the importance of the healthcare compliance outreach programs, because they are so vital to both the successful implementation of the new law, and to our work in the [OIG],” he said. He went on to describe how “prevention efforts such as compliance programs are integral to curbing healthcare fraud, waste and abuse. Under the [ACA], providers and suppliers will be required to adopt compliance programs that meet a core set of requirements, to be developed by the [HHS] Secretary, in consultation with [the OIG].” (emphasis mine)


Another Agency Says “Ditto”


Recently, another government agency placed greater emphasis on the existence of “an effective compliance program” in a healthcare provider setting – the Federal Sentencing Commission (FSC). The FSC just revised their Federal Sentencing Guidelines (FSGs) on April 29. The new guidelines, used by judges to determine prison sentences, fines, asset forfeitures and other penalties, now give more weight to the compliance program tenets laid out by the FSC. Also, in cases involving healthcare organizations, government prosecutors often look at how closely the FSG compliance tenets are being followed when deciding whether to file criminal or civil charges.


Six More Reasons


The point is, there are many changes being made to the current healthcare laws, as provided for by the ACA.


Here’s my list of six of the key changes made by the ACA, and why providers need to take a close look at their compliance plans NOW:


  • It amends the False Claims Act (FCA) in several ways, affecting (and expanding) who exactly is liable in the event of false claims being filed;
  • it significantly “loosens” the definition of who can be a whistleblower, mostly by removing the requirement for “direct knowledge” of the reported violations;

  • it amends the Physician Self-Referral Law (aka “Stark”), in perhaps a bit of good news for providers, since it now allows HHS to “compromise” on payments and penalties. Nevertheless, there are some significant changes to Stark, including a sweeping prohibition concerning physician ownership and investment in hospitals;
  • it changes the Anti-Kickback Statute (AKS), allowing now that a showing of “specific intent” to violate it is not required, thereby providing an easier standard;
  • it removes the intent requirement in the Healthcare Statute Act, meaning that proof of actual knowledge of the healthcare fraud statute or of specific intent to violate it is no longer required;
  • and finally, the ACA modifies the definition of “healthcare offense” to include violations of the AKS and the Food, Drug, and Cosmetic Act.



What’s a Provider to Do?


In a newsletter produced by Morris, Manning and Martin of Atlanta, the following advice appears at the end of a short analysis of the more striking changes that the ACA has wrought:


“Most of the additions of the new Act with respect to fraud and abuse will increase the risk to providers. The increased funding for fraud investigations and the significant loosening of the whistleblower lawsuit constraints virtually ensure that the current high level of scrutiny on providers will increase.”


They go on to advise:


“Providers should quickly and thoroughly review their current compliance efforts and plans to ensure that they are taking all steps to minimize their risk of a government investigation or whistleblower action in this increasingly perilous environment.”


Good advice for any provider doing business with Medicare and/or Medicaid.


About the Author

Ernie de los Santos is the chief information officer for eduTrax®. He joined the company at its inception and has been responsible for the creation, development and maintenance of the eduTrax® portals – a set of websites devoted to providing knowledge, resources and compliance aids for U.S. healthcare professionals who are
involved in revenue cycle management.

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