The same week one branch of the government pledged to beef up its healthcare fraud-fighting efforts, another branch introduced legislation to protect providers from investigators.
Working her end of the fraud spectrum, HHS Secretary Donna Shalala announced March 17 that her agency wants to hire special outside contractors to fight fraud and abuse.
Under a proposed HHS regulation, these contractors would have the authority to conduct medical reviews, audit Medicare cost report audits and carry out provider billing compliance education-tasks previously performed only by the agency itself or Medicare fiscal intermediaries.
Money to hire the contractors would come from Health Insurance Portability and Accountability Act funds. HHS would solicit bids from companies with expertise in detecting fraud, and the number of contractors would depend on the number of bids and the dollar amounts, HHS said.
HHS published the proposed regulation in the March 18 Federal Register with a 60-day public comment period.
Two days later, Rep. Bill McCollum (R-Fla.) and Rep. Bill Delahunt (D.-Mass.) introduced legislation that would curb HHS' use of the federal False Claims Act to go after providers suspected of submitting improper Medicare bills.
The bill, dubbed the Health Care Claims Guidance Act, would make several amendments to the False Claims Act. It would:
Establish "safe harbors" for hospitals that submit false claims based on the advice of fiscal intermediaries or carriers. Those hospitals would be liable for actual damages plus interest instead of the currently prescribed triple damages plus $5,000 to $10,000.
Establish safe harbors for hospitals with compliance plans. Those hospitals would be fined only actual damages plus interest.
Raise the burden of proof required from "a preponderance of evidence" to "clear and convincing evidence."
Establish a deminimus threshold requiring that the amount of damages in dispute exceed a certain number before a False Claims Act action could be brought.
In a prepared statement, McCollum said: "This legislation recognizes that, in our zeal to crack down on healthcare fraud and abuse, we must be careful not to throw our nets so wide that we ensnare honest providers who are making inadvertent billing mistakes."
McCollum, from Orlando, Fla., is the third-highest ranking Republican on the House Judiciary Committee, where the bill was introduced. Delahunt, a freshman, also sits on the committee.
In a press release, the American Hospital Association professed "strong support" for the bill. The association has supported such legislation since a federal judge dismissed an AHA suit that sought to stop a nationwide hospital fraud investigation. The judge recommended that Congress deal with the issue. The AHA is appealing the dismissal.
Meanwhile, the government still is cracking down on fraud and unveiled the fourth settlement in HHS' Physicians at Teaching Hospitals (PATH) initiative.
Eighteen physician practices affiliated with the University of Pittsburgh School of Medicine have agreed to pay $17 million to settle charges that they overbilled Medicare and Medicaid between 1990 and 1996. It's the second-largest settlement in the 3-year-old PATH probe, which looks at how teaching hospitals and the physicians on their faculty bill federal health programs.
University officials denied any wrongdoing in connection with the charges.