Feds crackdown on healthcare fraud

The U.S. government is strengthening its crackdown on practitioners who scam federal healthcare programs, with new muscle provided by the 2010 healthcare reform law and a determination to shut down fraudulent or erroneous claims that exceeded $24 billion in 2009.

While the government’s antifraud initiatives have grown in intensity in recent years, the Affordable Care Act (ACA) provides additional resources and authority designed to crush healthcare fraud schemes that contribute to the skyrocketing cost of healthcare in the United States.

Testifying before the House Energy & Commerce health subcommittee in September, Inspector General Daniel R. Levinson, at the U.S. Department of Health and Human Services (HHS), outlined the steps HHS is taking to implement the antifraud provisions of the ACA, which will build upon efforts already under way.

“Although there is no precise measure of healthcare fraud,” Levinson told lawmakers, “we know that it is a serious problem that demands an aggressive response.” Over the past year, the Office of Inspector General (OIG) has opened more than 1,300 healthcare fraud investigations and obtained more than 500 convictions, resulting in nearly $3 billion in expected civil and criminal recoveries.

“Healthcare fraud schemes commonly include billing for services that were not provided or were not medically necessary, purposely billing for a higher level of service than what was provided, misreporting costs or other data to increase payments, paying kickbacks, and/or stealing providers’ or beneficiaries’ identities,” Levinson said. “The perpetrators of these schemes range from street criminals, who believe it is safer and more profitable to steal from Medicare than trafficking in illegal drugs, to Fortune 500 companies that pay kickbacks to physicians in return for referrals.”

Levinson told the committee that the OIG “has a strong record” of investigating these corporate and institutional frauds, which often involve complex billing frauds, kickbacks, accounting schemes, illegal marketing, and physician self-referral arrangements. He said OIG is seeing an increase in quality-of-care cases involving allegations of substandard care.

The ACA provides expanded law enforcement authorities, opportunities for greater coordination among federal agencies, and enhanced funding for the Health Care Fraud and Abuse Control (HCFAC) program, he explained. There are also new authorities for HHS and new requirements for healthcare providers, suppliers, and other entities to promote the integrity of Medicare, Medicaid, and other federal healthcare programs.

HHS is now in finalizing regulations to implement some of the antifraud provisions of the Affordable Care Act. The regulations will:

• Establish requirements for suspending payments to providers and suppliers based on credible allegations of fraud in Medicare and Medicaid.

• Establish authority for imposing a temporary moratorium on Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP) enrollment on providers and suppliers to help prevent or fight fraud, waste, and abuse without impeding access to care.

• Strengthen and build on current provider enrollment and screening procedures to more accurately ensure that fraudulent providers are not gaming the system and that only qualified providers and suppliers are allowed to enroll in and bill Medicare, Medicaid, and CHIP.

• Outline requirements for states to terminate providers from Medicaid and CHIP when they have been terminated by Medicare or by another state Medicaid program or CHIP.

• Solicit input on how to best structure and develop provider compliance programs that are required under the law.

Levinson testified that from 1997 through 2009, the HCFAC program has returned more than $15.6 billion to the government through audit and investigative recoveries, with a return on investment of more than $4 for every $1 invested. Now, under the new law, the program will receive $10 million per year for 10 years under the ACA, and an additional $250 million for FY 2011-2016 under the Health Care and Education Reconciliation Act of 2010.

“With our share of this new funding, OIG will expand our Medicare and Medicaid investigations, audits, evaluations, enforcement, and compliance activities to support our efforts toward improving healthcare program integrity,” Levinson said.

Bob Gatty has covered governmental developments of the trade and business press for more than 30 years. He is founder and president of G-Net Strategic Communications, Sykesville, Maryland. Long-Term Living 2010 December;59(12):12-13

Robert Gatty

Robert Gatty has more than 40 years of experience in journalism, politics and business communications and is the founder and president of G-Net Strategic Communications based in Myrtle Beach, South Carolina. He can be reached at bob@gattyedits.com.