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Overview
The
Department of Justice (DoJ) and the Department of Health
and Human Services' (HHS) Office of Inspector General
(OIG) continue their aggressive pursuit of perceived
fraud and abuse in the health care system. These two
entities, each with separate enforcement authority,
were given joint direction of a national Health Care
Fraud and Abuse Control Program by Congress under the
Health Insurance Portability and Accountability Act
of 1996 (HIPAA). Congress' intention was to coordinate
federal, state, and local law enforcement activities
with respect to health care fraud and abuse.
According
to the DoJ's and OIG's "Health Care Fraud and Abuse
Control Program Annual Report for FY 1999," federal
prosecutors filed 371 criminal indictments in health
care fraud cases in 1999 - a 16 percent increase over
the previous year and up from 105 in 1993, before HIPAA.
The federal government won or negotiated more than $524
million in judgments, settlements, and administrative
impositions in health care fraud cases and proceedings
and collected $490 million in 1999. HHS excluded 2,976
individuals and entities from participating in Medicare,
Medicaid, and other federal healthcare programs.
From
the annual report's perspective of "preventing health
care fraud," the most recent audit of the Medicare payment
error rates showed a $10.6 billion or 45 percent drop
in improper fee-for-service payments over the previous
two years. Furthermore, the Departments' estimate of
improper payments dropped by $10.6 billion to $12.6
billion, or about 7 percent of the fiscal year total.
Improper payments amounted to $23.2 billion, or about
14 percent of the total payments made in the FY 1996.
The annual report is available on the OIG's
web site.
Federal Anti-Kickback Statute
The
federal anti-kickback statute makes it a felony for
any person "knowingly and willfully" to offer or to
pay any other person to induce that person to refer
a patient or to purchase a product, if the cost of the
product or service will be paid in whole or in part
by a federal health care program. A reciprocal provision
prohibits the solicitation or receipt of such prohibited
remuneration, making both the person offering or paying,
and the person soliciting or receiving improper remuneration,
equally at risk.
The
OIG published eight new final regulatory "safe harbors"
to the federal anti-kickback statute in November. The
new safe harbors protect certain arrangements from prosecution
under the anti-kickback statute, including: investments
in underserved areas; practitioner recruitment in underserved
areas; obstetrical malpractice insurance subsidies for
underserved areas; sales of physician practices to hospitals
in underserved areas; investments in ambulatory surgical
centers; investments in group practices; referral arrangements
for specialty services; and cooperative hospital service
organizations.
These
eight new safe harbors join 13 previously published
regulatory safe harbors and two additional safe harbors
for shared-risk arrangements, published as an interim
final rule in November. Furthermore, the OIG clarified
six of the original safe harbors in the same final rule
establishing the new safe harbors. The OIG states that
the "intent of the clarifications is to make the regulations
easier for the industry to understand and apply to particular
factual circumstances." The new final rule clarifies
aspects of the six original safe harbors for large and
small entity investments; space rental; equipment rental;
personal services and management contracts; referral
services; and discounts. An
OIG fact sheet on the anti-kickback law and regulatory
safe harbors may be found on their website.
As
required by HIPAA, the OIG, in December, solicited
proposals and recommendations for developing new and
modifying existing safe harbor provisions under the
anti-kickback statute.
"Stark II" Law
The
"Stark II" law limits physician referrals to health
care entities in which the referring physician has a
financial interest. Due to the complexity and onerous
nature of the regulations proposed in 1998 to implement
this law, Congress has begun to debate revisions. Rep.
Stark (D-CA) - for whom the law is named - has introduced
legislation to amend the law given the change in the
health care environment since it was originally enacted.
Rep. Bill Thomas (R-CA), Chair of the powerful Ways
and Means' Health Subcommittee, also introduced legislation
to amend the Stark II law.
False Claims Act
The False Claims Act (FCA) prohibits the "knowing" submission
of false claims or the making of false or fraudulent
statements to obtain payment of claims by the government.
Violators are subject to fines ranging from $5,000 to
$10,000 per violation, plus criminal prosecution. Total
financial penalties can far exceed the dollar value
of disputed claims. In an attempt to set uniform standards
for using the FCA and to address the concerns of physicians,
hospitals, and other providers, the OIG and the DoJ
have each issued guidelines for applying the FCA to
health care cases. These guidelines establish thresholds
for initiating FCA investigations and emphasize that
the agencies must take a case-by-case approach to fraud
and abuse prosecutions. In a report released in August,
however, the General Accounting Office found that
the DoJ's application of these guidelines varied widely,
leading to continued inconsistency in the pursuit and
enforcement of the FCA.
Healthcare
Integrity and Protection Data Bank
The Healthcare Integrity and Protection Data Bank (HIPDB)
was mandated by HIPAA for the reporting of and disclosing
of certain final adverse actions taken against physicians
and other healthcare providers and suppliers. Such adverse
actions include most civil judgments related to the
delivery of a health care item or service; criminal
convictions against physicians, health care providers,
suppliers, or practitioners related to the delivery
of a health care item or service; actions by federal
or state agencies responsible for the licensing and
certification of physicians, health care providers,
suppliers, and practitioners; and the exclusion of physicians,
health care providers, suppliers, and practitioners
from participation in federal or state health care programs.
The HIPDB supplements the National Practitioner Data
Bank (NPDB), which contains the identities of physicians
who make payments to settle medical malpractice lawsuits.
The OIG published a final rule establishing the HIPDB
in October and announced that the Bank became operational
for purposes of reporting information in November.
More information
about the HIPDB and the NPDB can be found on their website.
Office of Inspector General's Work Plan
The OIG issued its fiscal year 2000 work plan, detailing
various projects that it plans to conduct during the
fiscal year. Included among its projects for the Health
Care Financing Administration is an assessment of
the medical appropriateness of myocardial perfusion
imaging and plans to seek an explanation of the rapid
increase in utilization since 1997. The ACC and
American Society of Nuclear Cardiology met with the
OIG and have sent them information showing that this
increase is appropriate. The
OIG's work plan can be found on the web.
Practice Compliance Plans
To address concerns regarding compliance with the array
of federal fraud and abuse provisions, many health care
organizations are developing compliance plans. The OIG
has released compliance program guidelines for hospitals,
home health agencies, and clinical laboratories, and
solicited comments on drafting guidelines for individual
physicians and small group practices. The ACC submitted
comments to the OIG which are available
on the ACC website. In addition, the ACC has
posted a compliance guide for physicians to assist members
in preparing compliance plans, also
available on the ACC website.
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