Provider groups are worried that provisions included in Senate-passed health insurance legislation that aim to reduce healthcare fraud would result in inappropriate prosecution and greater penalties than providers deserve.
The bill, which the Senate passed by a unanimous vote last week, would establish a new federal criminal healthcare fraud statute, a new self-funded account in the Medicare Hospital Insurance Trust Fund to pay for fraud-and-abuse investigations, and greater civil fines for instances of fraud and abuse.
Provider groups, however, say vague language in the legislation would result in providers being prosecuted for honest mistakes. They also contend the fraud-control account, which will be financed by fines and damages, will create a "bounty system."
The American Medical Association, leading a coalition of specialty groups, last week was preparing a letter to members of the House-Senate conference committee that will be assigned to iron out differences between House and Senate versions of the legislation.
That letter asked that providers be penalized for healthcare fraud only in cases in which they knew the behavior was prohibited.
Although criminal cases against providers under the new federal criminal healthcare fraud statute must show that a provider's fraudulent activities were "knowing and willful," providers would be liable for civil penalties in cases in which they should have known the conduct was prohibited.
The physicians' letter also asked that civil fines be equal to the magnitude of the violations they are punishing. The Senate bill increases civil fines from $2,000 to $10,000 per item or service fraudulently provided.
Some groups said there was progress in making the Senate bill more provider-friendly and held out hope that the compromise agreement that emerges from the House-Senate conference will lean more toward the House legislation, which providers prefer.
"We're optimistic that, working with the conferees, we can make this a better package," said Mary Grealy, executive vice president of the Federation of American Health Systems.
But other provider group representatives said the Senate goes too far, making fraud-and-abuse provisions one of the most difficult issues for the conference to resolve.