PROVIDERS FEAR BURDEN OF NEW HHS RULES
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February 24, 1997 12:00 AM

PROVIDERS FEAR BURDEN OF NEW HHS RULES

Eric Weissenstein
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    Healthcare providers seeking guidance on whether their business arrangements violate federal fraud-and-abuse laws could have their deals delayed by the paperwork requirements under new regulations issued last week by HHS' inspector general's office, legal experts say.

    The rules were issued Feb. 19 and took effect two days later. They allow providers for the first time to seek so-called advisory opinions from HHS regarding the legality of their proposed business ventures.

    The anti-kickback provisions of the Medicare and Medicaid fraud-and-abuse statutes bar any form of remuneration to induce patient referrals. Violations can be criminal, punishable by fines and imprisonment, or civil, punishable by suspension or expulsion from Medicare and Medicaid.

    Under the new rules, HHS will review only transactions that have occurred or for which the parties can prove their intention to proceed. HHS will issue opinions to those involved, and HHS' legal conclusions will apply solely to the deal outlined in the providers' request for an opinion.

    Providers will be required to furnish a variety of information and "all relevant documents" in a transaction, such as contracts or leases and any written or oral agreements being considered. A narrative description of the deal also must be furnished.

    Also under the new rules, all advisory opinions issued by HHS will be publicly available. The new regulations don't tell providers what the advisory opinions will say or what information will be included in them.

    "These are very onerous requirements," said Heidi Hayduk, a McLean, Va.-based healthcare consultant.

    HHS and the U.S. Justice Department are required to provide the advisory opinions by last year's health insurance reform law, commonly known as the Kassebaum-Kennedy bill. The Clinton administration has opposed the opinions and has proposed repealing the requirement in its fiscal 1998 budget (Feb. 17, p. 80).

    The administration has estimated it can save $300 million over five years by reversing the advisory opinion requirement along with several other fraud laws.

    Provider groups say they are still concerned that, because of the administration's opposition to the advisory opinion requirements, HHS' inspector general's office won't put forth a good-faith effort in issuing important guidance to the field.

    "I hope the agencies are committed to giving meaningful guidance rather than inundating us with burdensome processes," said one provider lobbyist who asked not to be identified.

    Under the law, HHS is allowed to charge providers for the cost of preparing an advisory opinion. Last week's regulations say providers submitting requests must include a $250 upfront fee. HHS will bill providers at $100 an hour with a $250 minimum.

    "The fee structure is pretty incredible," Hayduk said. "There is no cap and obviously these things could take hours and hours."

    HHS is required to respond to a request for an advisory opinion within 60 days of the request.

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