The Affordable Care Act (ACA)

The new Affordable Care Act (aka Healthcare Reform), signed into law in March 2010, has changed and will continue to change the face of all aspects of healthcare for patients, organizational providers, physicians and payers (lots of ‘p’s there).  Some provisions of the act are gaining more notoriety than others, with the total package not yet even fully developed or understood.  Some in our industry are hoping it will “go away” or be revised in the future so we can say now that “we really don’t have to DO anything about it, and we have enough to contend with these days anyway!”

Ok, let’s be clear…………..we all MUST take notice of certain components of this legislation and address our internal issues NOW, because tomorrow truly will be too late; the still-new RAC program is but a portend of things to come!

In a letter dated June 8, 2010 from HHS Secretary Kathleen Sebelius to Attorney General Eric Holder, she underscored certain components of the Affordable Care Act about which we must all sit up and take notice: “the President has directed the Department of Health and Human Services (HHS) to cut the improper payment rate, which tracks fraud, waste and abuse in the Medicare Fee for Service program, in half by 2012.”

What You MUST Hear?!

The Affordable Care Act will improve and expand government-wide healthcare initiatives by identifying and fighting fraud and waste, and it includes new tools to prevent, detect and take action against fraud in Medicare, Medicaid, the Children’s Health Insurance Program (CHIP) and also private insurer enterprises. The act also amends the False Claims Act to provide that a violation of the latter’s anti-kickback statute constitutes a fraudulent action. The new act defines an “overpayment” as “any funds that a person receives or retains (from a federal payer) to which the person, after applicable reconciliation, is not entitled.”

Through “Expanded Overpayment Recovery Efforts – the Secretary (of HHS) (has) provided new authorities to identify and recover overpayments through the expansion of the RACs to Medicaid, Medicare Advantage and Part D (the Medicare drug benefit). Providers, suppliers, Medicare Advantage Plans and Part D Plans must self-report and return Medicare and Medicaid overpayments within 60 days of identification.”

(See for a summary or the key points in the ACA.)

I have bolded that last statement to make the point we must all take note of this. In the past, internal or external compliance reviews perhaps may have identified overpayments and/or errors, and providers may have chosen to hope no one finds out, failing to report the matter or return funds.  Or, in the alternative, providers may have been slow in reaching a decision on how best to manage this over an extended period of time; under the ACA, however, the time frame is 60 days from the point of identification, and overpayments and errors must be self-reported! Frankly, if not reported or returned, these mistakes will come back to haunt providers when they come to light, which they eventually will, and likely sooner than later!

Mandatory Compliance Plans

Compliance plans, formerly voluntary in nature for healthcare providers, now are mandatory……….REALLY!  No formal date has been announced, however in a May 13, 2010 news conference, the OIG through Dan Levinson stated “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.”

Did you notice what was said at the end, specifically “to be developed by?” This area has not been developed, and most of us to date have relied upon the OIG 7 elements of a compliance plan, or the “7 Key Elements of Compliance Programs” to construct our plans/programs (these recently were reviewed in a RAC Monitor Webinar on May 20, 2010).

In the future, HHS with assistance from CMS will look at determining the specific requirements for compliance programs/plans and will make them a “condition of enrollment” as a Medicare/Medicaid provider.


How confident are you that your organization/practice/facility compliance program is current, fully implemented, understood and followed?



If you are part of the vast majority of providers, you may know you have one, and you may have someone (an individual or department) who is identified as being responsible for overseeing it; however, many programs/plans have internal requirements for “monitoring and auditing” (a necessary element) that are not followed routinely and perhaps may not even be reported to the board/administration in a timely and meaningful format. Compliance with the compliance plan is what is necessary!


Follow the Money

The number of government dollars that have been earmarked by the ACA to enforce and ferret out fraud and waste is unprecedented. The act provides an additional $350 million over the next 10 years to help fight fraud through the Health Care Fraud and Abuse Control Account (HCFAC), and the act allows that these funds may be used for hiring new officials and agents to assist in those efforts.


  • A HEAT (Health Care Fraud Prevention Enforcement Action Team) has been established in seven cities across the country as “special anti-Medicare fraud strike forces” with sophisticated data analysis techniques. lt;/li>
  • FERA, the Fraud Enforcement Recovery Act, describes the expanded emphasis in this area.
  • The Program Integrity Manual, or PIM, reflects the principals, values and priorities of the Medicare Integrity Program (MIP), with the primary goal being paying claims correctly; and
  • Program Safeguard Contractors (PSCs), Zone Program Integrity Contractors (ZPICs) andMedicare Administrators Contractors (MACs) must ensure that correct payments for covered and correctly coded services only have been rendered to eligible beneficiaries by legitimate providers.

Can You Hear Now?!

The above demonstrates the world we are working within, and this information must serve to spur us to be proactive regarding demonstrable internal process and/or behavioral changes. “Business as usual” (unless you are fortunate enough to work in an unusual and exceptional organization), must stop being

RACs are the tip of the spear, if you will, and they will expand; ZPICs, MICs and others will join the effort, with others sure to follow. But should these terrify us, or cause us to ponder exiting healthcare altogether?

NO…. not if we are focused on doing the right thing, to the right patient, at the right time, in the right way, in the right location, according to the right regulations, using the right documentation and applying the right codes!

It might sound easy, however multiple layers of issues and differing degrees of understanding and resistance often serve to undermine the best of intentions and institutions. Failure here, however, really cannot be an option………each of us should provide an answer or solution to the problem, get educated and engaged and help to “hear” the message and respond! The health of the healthcare industry surely depends on those of us who have spent our careers, talents, time and passions in the provision of healthcare services.


About the Author

Patricia Dear, RN, has more than 30 years of experience in the healthcare industry, working within corporate healthcare entities, for-profit and non-profit hospital systems, legal defense and plaintiff counsel. She is a recognized national speaker on reimbursement and compliance. She is the president and CEO of eduTrax®.

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