OIG updates guidance on evaluating state false claims act legislation

Posted on March 18, 2013 | Comment (1)

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Updated guidelines released by the US Department of Health and Human Services Office of the Inspector General (OIG) provide new information for evaluating state false claims act legislation.  The updates adhere to various amendments made to the federal False Claims Act of 2009 and 2010.  Several recent legislative endeavors, including the Affordable Care Act (ACA), have altered the foundation and scope by which the False Claims Act operates.  One ACA example found within the OIG updates is how states will receive their share of any Medicaid recoveries made under the federal False Claims Act.

Comment (1)

The Congressional Research Service (CRS) released a report claiming that under the Affordable Care Act (ACA), the federal government may oppose the dismissal of False Claims Act (FCA) cases that deal with publicly disclosed information. By amending the FCA's public disclosure bar, Health Care Fraud and Abuse Laws Affecting Medicare and Medicaid: An Overview states that section 1313(a)(6) of the ACA provides greater discretion for the federal government in deciding which FCA cases they choose to pursue. Additionally, the CRS report said that relators and other whistleblowers may bring FCA cases to court that deal with publicly disclosed information published in state and local government reports.
A new brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) focuses on efforts to combat a longstanding challenge: fraud and abuse in health care. These issues constitute compelling problems for the Medicare and Medicaid programs, with related costs of $98 billion last year.
The Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively referred to as the ACA)<sup>[1]</sup> arms the federal government with significant new and enhanced tools to identify and pursue financial recovery for fraudulent, wasteful, and abusive healthcare practices. The cost of implementing other programmatic provisions of the ACA, such as coverage for the uninsured and increased fraud and abuse enforcement activities, will be paid for, in part, by monies recovered from prosecution of healthcare fraud and savings achieved from deterring fraudulent practices. Furthermore, reducing fraudulent and abusive practices is directly linked to the transformation of the health care system to a value-based system that rewards high-quality and efficient care delivery at lower cost. As the $4.1 billion recovered by the federal government in 2011 from fraud and abuse enforcement indicates, healthcare organizations, including providers (practitioners, hospitals, nursing homes), health plans, manufacturers (medical device, pharmaceutical), and suppliers (e.g., durable medical equipments companies), should expect continued aggressive enforcement in the coming years.<sup>[2]</sup> The ACA heralds a new era of compliance in healthcare that will require these organizations to monitor their operations, implement robust compliance programs, report publicly a vast array of information about their business arrangements, and face significant penalties for violations.
The complexity and size of the U.S. health care system makes it susceptible to fraud and abuse in both the public and private insurance markets. According to the National Health Care Anti-Fraud Association (NHCAA), an estimated 3% of all health care spending is lost to fraud; government and law enforcement agencies have estimated fraud-related loses to be as high as 10% of annual health care expenditures. The financial ramifications of these fraudulent schemes are enormous to patients, providers and the federal government. Indeed, the U.S. Government Accountability Office (GAO) estimates that for 2010, Medicare alone had $48 billion in improper payments (underpayments and overpayments). In response to its findings, the GAO recommended that the Centers for Medicare and Medicaid Services find ways to address the vulnerabilities to improper payments and enhance program integrity.
The health reform law revises the anti-kickback statute to broaden the reach of the law and enhance enforcement.
The complexity and size of the U.S. health care system makes it susceptible to fraud and abuse in both the public and private insurance markets. According to the National Health Care Anti-Fraud Association (NHCAA), an estimated 3% of all health care spending is lost to fraud; government and law enforcement agencies have estimated fraud-related loses to be as high as 10% of annual health care expenditures. The financial ramifications of these fraudulent schemes are enormous to patients, providers and the federal government. Indeed, the U.S. Government Accountability Office (GAO) estimates that for 2010, Medicare alone had $48 billion in improper payments (underpayments and overpayments). In response to its findings, the GAO recommended that the Centers for Medicare and Medicaid Services find ways to address the vulnerabilities to improper payments and enhance program integrity.
The U.S. Department of Health and Human Services (HHS) and the U.S. Department of Justice (DOJ) have issued their annual report on health care fraud and abuse. The report shows that the Federal Government's Health Care Fraud and Abuse Control Program recovered more than $4 billion of taxpayer dollars during fiscal year 2010. HHS Secretary Kathleen Sebelius said, "Thanks to the President’s leadership and the new tools provided by the Affordable Care Act, we can focus on stopping fraud before it happens."
Releasing an annual report on health care fraud prevention, the Department of Health and Human Services and the Department of Justice emphasize new measures of the health reform law designed to route out abuse of the system.