November 1996
Volume 60 |
Number 11
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PRACTICE MANAGEMENT
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| Changes to the
Medicare Fraud and Abuse Rules |
Karin Bierstein
Practice Management Coordinator
$50 billion: Annual cost of fraud and abuse in Medicare
and Medicaid, according to the Government Accounting Office.
$10.2 billion: Approximate savings from audits and evaluations
performed by the Office of the Inspector General in the Department
of Health and Human Services in 1995, according to June Gibbs
Brown, Inspector General.
$275 million: Daily loss to Medicare from "clever
con artists who have devised increasingly ingenious ways to defraud
the health care system," according to Sen. William S. Cohen
(R-ME), who announced congressional approval of this summer's
health care reform bill, including fraud and abuse provisions
that he authored.
Although these numbers and other fraud and abuse statistics are
not always consistent with each other (e.g., $275 million x 365
days = $100.375 billion, which is more than twice the $50 billion
annual cost estimated by the Government Accounting Office), each
one of them is large enough to explain the government's strong
interest in curbing health care fraud and abuse. The Health Insurance
Portability and Accountability Act of 1996, signed into law by
President Clinton on August 21, contains numerous provisions strengthening
fraud and abuse enforcement. This column will summarize the provisions
of greatest potential concern to anesthesiologists.
The Good*
After January 1, 1997, physicians will be able to obtain binding
advisory opinions from the Office of the Inspector General
on whether their business plans or proposed ventures would violate
either the antikickback or fraud rules. The Office of the Inspector
General is required to produce an opinion within 60 days of receiving
the request. Both the Inspector General and the U.S. Attorney
General opposed this innovation in the law, on the grounds, respectively,
of impracticality and of the potential use of advisory opinions
as a shield against legitimate enforcement. The Department of
Health and Human Services must develop implementing regulations
within 120 days of the bill's signing. The statute does not indicate
how detailed the opinions must be, which could certainly defeat
the purpose of making needed information available.
Only intentional violations will trigger the criminal penalties.
During the bill's movement through Congress, the word "willful"
was removed from the "knowing and willful" standard
of intent by the House, but it was restored in the Senate
and in the final bill after intense lobbying by organized medicine.
Inclusion of "willful" ensures that no physician will
be convicted for inadvertent or accidental conduct.
The Bad*
Incorrect coding (i.e., upcoding), effective January 1,
1997, can give rise to civil money penalties if a person "engages
in a pattern or practice" of submitting claims that he or
she "knows or should know" are based on a higher-paying
code than the applicable code. The phrase "should know"
means that a person "acts in deliberate ignorance or reckless
disregard of the truth or falsity of the information." Thus,
for example, it is conceivable that billing for ventilation management
before the patient is transferred out of the postanesthesia care
unit, if done consistently despite Medicare carrier alerts, or
billing for a right heart catheterization instead of insertion
of a pulmonary artery catheter could result in a civil penalty
(or even a criminal sanction). The same standard applies to the
newly defined civil transgression of billing for medically unnecessary
services.
Civil money penalties are increased from $2,000 to $10,000
per item or service. The assessment in lieu of damages to which
a violator may be subject increases from "not more than twice
the amount" to "not more than three times the amount"
claimed for each item or service. The act extends certain criminal
penalties for fraud and abuse violations to other federal
health care programs (e.g., CHAMPUS, Federal Employees' Health
Benefit Program).
Exclusions from Medicare and Medicaid for those convicted
of felonies relating to health care fraud will now last for a
minimum of five years. There will be discretionary exclusions
for misdemeanor violations.
Injunctive relief to permit the government to prevent
the commission of an offense is now available, as is the remedy
of forfeiture of property obtained through the commission of fraud.
The Interesting*
Newly defined criminal offenses include health care fraud,
theft or embezzlement, false statements relating to health care
matters, obstructions of criminal investigations and money laundering.
The Department of Health and Human Services will also be required
to exclude from Medicare and state health programs, for a minimum
of five years, any individual or entity who has been convicted
of felony offenses relating to controlled substances.
The act establishes a new fraud and abuse control program
to coordinate federal, state and local law enforcement to combat
health care fraud. The Health Care Financing Administration will
receive an average of $500 million per year to provide carriers
with the funds necessary to carry out the new Medicare Integrity
Program. Over a seven-year period, the Office of the Inspector
General will receive $820 million; the Justice Department, $330
million for additional prosecutors; and the Federal Bureau of
Investigation, $548 million for new investigators. These costs
are expected to be offset by the savings generated. The American
Medical Association objects to this self-funding structure on
the grounds that it amounts to a bounty system.
There will also be a new program to collect health
care fraud and abuse data on final adverse actions taken by
the government to assist law enforcement, and it will include
strict confidentiality provisions.
* This classification of the new provisions
is obviously open to challenge. Some anesthesiologists will consider
increased enforcement funding "bad" rather than merely
"interesting," and others may deem it "good."
Please consider any categorization with which you disagree as
nothing more than a well-intentioned effort to provoke thought.
Q: Does the typical physician who occasionally bungles a claim
have anything to fear from you?
A: None of the cases we prosecute is the result of individual
error. We've never gone after a simple miscoding accident or
a mistake over a regulation that's hard to understand. But if
a physician's errors are numerous, and they all just happen
to make more money for him, then yes, he may have something
to fear.
Excerpt from: An interview with June Gibbs Brown [HHS Inspector
General]: What the Medicare police look for. Medical Economics.
September 9, 1996:265-273.
1997 Practice Management Conference Registration
All ASA active members were sent a brochure containing information
and a registration form for the 1997 ASA Conference on Practice
Management to be held on February 21-23 in Orlando, Florida. If
you have not received the registration material and wish to register,
please contact the Meetings Department at the ASA Executive Office
at (847) 825-5586 or download the form off of the ASA Web site
at <http://www.asahq.org>
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