Healthcare News & Insights

What’s next in federal fraud enforcement?

The Department of Health & Human Services (HHS) and the Department of Justice (DOJ) both reinforced their commitment to rooting out fraud in 2015 — but what does that mean for your compliance programs? 

ThinkstockPhotos-490577089In short: Expect the feds to continue to turn up the heat on providers suspected of fraudulent billing, says healthcare attorney Marissel Descalzo in a blog post for her firm Carlton Fields Jorden Burt LLP.

The government is hoping to build on momentum from last year’s successful fraud enforcement efforts, which were largely due to the Affordable Care Act expanding enforcement authority to HHS DOJ and the Office of the Inspector General (OIG).

Enforcement focus areas

In particular, Descalzo believes the industry will likely see more False Claims Act (FCA) complaints from whistleblowers inside organizations. Employees that bring forward successful FCA complaints have a chance of collecting 30% of the recovered funds. That means there’s a lot of incentives for workers to bring claims forward if they get even a whiff that something could be fraud.

Similarly, hospital leaders should be keeping an eye on an important lawsuit (U.S. ex rel. Kane v. Health First Inc.) related to reverse false claims — a violation when a provider neglects to return an overpayment 60 days after discovery.

Once a final ruling is made, leaders will have a better understanding of this new compliance area — when an overpayment is officially identified and what actions must be taken before the 60-day clock runs out.

Several areas the OIG is focusing on in relation to hospital compliance besides HIPAA, include:

  • scrutinizing adverse patient events at long-term care hospitals
  • investigating wage data reports hospitals submit to the OIG, and
  • reviewing billing practices of hospitals’ off-campus clinics and partners.

This last area should be particularly concerning to hospitals since it means they could come under scrutiny for an associates mistakes.

Under fire for associates’ violations

Hospitals can get a sense of how the feds’ anti-fraud efforts play out from recent FCA settlements involving several hospitals and the ambulance companies associated with them.

According to another healthcare attorney, J. D. Thomas of the firm Waller Lansden Dortch & Davis LLP, earlier this month the government settled FCA allegations with nine Florida hospitals.

The hospitals had come under fire for allegedly allowing ambulance companies to bill rides that weren’t medically necessary.

Collectively, the providers are settling claims they falsely provided Certificates of Medical Necessity for $6.2 million.

As Thomas notes, this settlement has raised some alarm bells for other facilities since they rely on ambulance transportation in settings where time may not allow for assessing medical necessity before transporting a patient.

The U.S. Attorney’s Office which prosecuted the case also has been in touch with other offices, encouraging them to broaden their ambulance investigations.

Given the increase in FCA litigation, as well as the rising cost of penalties and settlements, hospital leaders need consider these enforcement areas and double-check their compliance programs are well maintained.

Thomas recommends providers evaluate their procedures for reviewing and signing documentation like Certificates of Medical Necessity to ensure accuracy. This is especially important if information is coming from a third party, since the feds will continue to scrutinize documentation as a condition of payment.

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