As regulators implement a laundry list of new enforcement techniques in the healthcare reform law, their goal is not only to discourage individual crimes, but to alter the whole value proposition for healthcare fraudsters.
Agencies unveil new fraud-detection procedures
“In combination, the ACA's new enforcement authorities and tools will help change the calculus undertaken by criminals when deciding whether to target Medicare and Medicaid by increasing the risk of prompt detection and the certainty of punishment,” HHS Inspector General Daniel Levinson said in written comments to a house subcommittee last week, referencing the Patient Protection and Affordable Care Act.
However, the new fraud-detection activities could require more work and expense and, in some cases, personal intrusion on the part of legitimate healthcare providers.
That includes fingerprinting and criminal background checks for executives in charge of new home healthcare and durable medical-equipment agencies, which are categorized as high-risk for fraud by the CMS. And that may include CEOs of hospitals who start new home healthcare agencies, as is expected to become more common in coming years.
The new rules would also make it easier for the CMS to suspend Medicare payments in cases where credible allegations of fraud are presented and to halt new enrollees in geographic areas or service lines seeing suspicious levels of activity. Independent diagnostic and outpatient rehab facilities and hospices—seen as moderate fraud risks—would be open to unannounced site inspections, along with DME and home healthcare agencies.
Regulators say individual hospitals are at only limited risk of submitting fraudulent claims and therefore would be subject only to licensure and regulatory verifications.
“The government wants to send a message that enforcement is robust,” said Keith Halleland, a partner with Minneapolis' Halleland Habicht and general counsel of the Health Care Compliance Association. “The federal government has been focused on fraud and abuse issues, and with healthcare reform we are just getting deeper and deeper into that.”
The CMS last week released 187 pages of proposed regulations to implement the enhanced enforcement requirements spelled out in the reform law. The agency is soliciting comments through Nov. 16 and intends to implement the new rules for Medicare, Medicaid and the Children's Health Insurance Program on March 23, 2011.
Investigators say fraud is a major problem. The Government Accountability Office designated Medicare a “high risk” program back in 1990 and last year reported that nearly 8% of the 4.5 million claims per day it processes were improper, totaling about $24 billion in 2009. Improper payments include outright fraud where no services were rendered as well as inflated bills and unintentional duplicate payments.
“It's targeted toward pockets of criminal fraud, and hopefully it diminishes the number of people who attempt fraud. Will it completely end it? Probably not. There's always dishonest people,” said Shawn DeGroot, vice president of corporate responsibility at Regional Health, which operates five hospitals from its Rapid City, S.D., headquarters. “The government is trying to get in front and be proactive.”
In particular, home healthcare agencies and sellers of durable medical equipment, prosthetics, orthotics and supplies will find far more difficulty in obtaining and revalidating their Medicare provider numbers.
“So much of the problem we've been experiencing is the ease of getting a provider number,” HHS' Levinson said Sept. 22 in his testimony to the House Energy and Commerce Health Subcommittee. “Too often in the modern era the government doesn't know who it's doing business with.”
That's why the CMS is proposing to screen home healthcare agencies and DME suppliers by getting fingerprints from and doing background checks on the owners, delegated officials or managing employees of providers and suppliers in those categories.
Although stand-alone home healthcare agencies are seen as nexuses of fraud, industry experts expect home healthcare to become an increasingly common service offered by hospitals trying to reduce the use of costly acute care in their buildings— which means hospital and system CEOs could find themselves submitting to criminal background checks and fingerprinting.
“I think we're going to see that's part of the reality of healthcare right now. That's certainly part of the reality of healthcare reform,” Halleland said.
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