At last week's annual American Hospital Association membership meeting in Washington, AHA leaders returned repeatedly to the theme that federal investigators are being overly aggressive in their pursuit of healthcare fraud.
The AHA and the U.S. Justice Department disagree about the use of the federal False Claims Act to conduct Medicare billing investigations. The law's harsh penalties, which include substantial fines and possible imprisonment, prompt hospitals and other providers to settle billing investigations rather than risk losing in court even when there was no intent to defraud, the AHA and others say.
"This is the equivalent of using capital punishment for traffic violations," Richard Pollack, AHA executive vice president of federal relations, told the conventioneers.
To aid in its efforts, the AHA has retained Joseph diGenova, a partner with diGenova and Toensing in Washington and a former U.S. attorney and independent counsel. DiGenova said the Justice Department is using "a very heavy-handed way to negotiate. A hospital should not have to say it has committed fraud when it has not."
The crowd got a measure of sympathy from U.S. Attorney General Janet Reno, who told the attendees she is "dedicated to working with you to make sure (the False Claims Act) is not abused.
"Honest mistakes or simple errors do not constitute a false claim," Reno said. But she added that law enforcement officials would use "all the methods at our disposal," including the False Claims Act, when there's evidence a hospital knew false claims were being submitted or "acted in reckless disregard or deliberate ignorance."
Several lawmakers who spoke at the AHA meeting also expressed reservations about the government's tactics.
"We have to find a way to distinguish between fraud and abuse and honest mistakes," said Sen. John Breaux (D-La.), who recently was named chairman of the 17-member National Bipartisan Commission on the Future of Medicare.
The AHA, however, wants more than just assurance from Reno and Congress that the False Claims Act will be used properly. It wants legislation limiting the government's use of the law against hospitals that have few billing problems and have adopted billing compliance programs. The AHA said last week it had found a sponsor for the bill but declined to identify who it is.
Reno stopped short of supporting such legislation. "We believe the system works pretty well now," said an aide to Reno.