After a series of private meetings with top healthcare industry executives, HHS Inspector General Janet Rehnquist said last week that the federal government will ease some of its fraud compliance requirements to reduce providers' costs.
For example, the inspector general's office will streamline the monitoring of independent review organizations that track providers' compliance with corporate integrity agreements negotiated as part of fraud settlements.
Also, the office will no longer require detailed statistical sampling of Medicare and Medicaid claims under corporate integrity agreements, unless a sample reveals an "unacceptable" error rate, Rehnquist said in her first speech as inspector general since being sworn in Aug. 8.
"We are aware of the financial impact of (corporate integrity agreements) on providers," she said.
Her comments came at the opening session of a fraud and compliance forum in Washington sponsored by the American Health Lawyers Association and the Health Care Compliance Association.
"It seems that she's making a real attempt to be constructive," said Charles "Chip" Kahn, president and chief executive officer of the Federation of American Hospitals.
"Showing a willingness to be flexible on the (corporate integrity agreements) is a positive step," said Thomas Nickels, senior vice president of federal relations at the American Hospital Association.
The AHA and the federation were just two of several healthcare organizations whose executives met privately with Rehnquist in a series of meetings in late September.
The other groups included the Catholic Health Association, the American Medical Association, the Medical Group Management Association and American College of Physicians-American Society of Internal Medicine. All of the groups have long called on HHS' inspector general's office and the U.S. Justice Department to ease up on fraud enforcement, saying the agencies use the onerous penalties of the False Claims Act to unfairly punish providers that inadvertently run afoul of complex Medicare and Medicaid billing regulations.
Last week, for example, a study found that the federal False Claims Act has been successful in recovering $8 for every dollar spent fighting healthcare fraud and abuse. The law has led to the recovery of $8.7 billion in funds from state and federal programs.
Washington-based New Directions for Policy, a nonpartisan research firm, performed the study "Reducing Health Care Fraud: An Assessment of the Impact of the False Claims Act."
The 32-page report released Oct. 1 indicated that the law is deterring fraud. It concluded that more than half of settlement money in the past four years was recovered from healthcare providers. The study was funded by Taxpayers Against Fraud, a not-for-profit consumer organization supported by trial lawyers.
CHA spokesman Fred Caesar characterized the hospital executives' sit-down with Rehnquist as a private meeting. "And we don't comment on private meetings," he said.
AHA spokeswoman Alicia Mitchell also declined to disclose the meeting's agenda or her association's concerns with the agency's enforcement policies.
Kahn wasn't much more revealing, calling the meeting an effort by Rehnquist to get acquainted with the key players representing various healthcare communities.
"I think it was a good beginning for an ongoing constructive dialogue about compliance issues that we're all involved in," Kahn said. "I'm very hopeful and look forward to an open relationship with the inspector general. We hope she's someone we can go to with our concerns. At the end of the day she's got her job to do with compliance. But she's open to giving us our day in court."
Though Kahn declined to disclose either what concerned healthcare executives or what Rehnquist offered or responded, he said she promised changes.
The inspector general's office did not publicize the summits, nor would Rehnquist comment on them. She said new corporate integrity agreements will reflect the less-stringent position, and agreements already in place will be amended to reduce the burden on hospitals.
Also, in deciding whether to require such agreements, the inspector general's office will evaluate False Claims Act litigation according to three categories, Rehnquist said.
A provider that cannot show it has internal safeguards against future fraudulent behavior will be required to accept a corporate integrity agreement. In other cases, however, the office won't insist on a corporate integrity agreement or will wait to make its decision until after the False Claims Act litigation is settled.
Negotiations over corporate integrity agreements will be separated from negotiations over fraud settlements, and the inspector general's office will use its administrative authority to impose civil monetary penalties, instead of negotiating such penalties during settlements, Rehnquist said.
Separating such negotiations will make it easier for providers and the federal government to settle the false claims litigation, she said.