Turning Up the Heat on Fraud and Abuse–Part of the Solution to Health Reform?
Giotto di Bondone, The Seven Vices: Envy (1266-1337)
[Ed. note: As noted in the post above, we are very pleased to welcome the Executive Director of the Center for Health & Pharmaceutical Law & Policy, Tracy E. Miller, J.D., to Health Reform Watch today.]
As the search for new sources to fund health care reform intensifies, it seems more certain that increased enforcement of fraud and abuse will be part of the equation. Both the House and Senate have incorporated increased enforcement as part of health care reform legislation. The health care reform bill released by House Democrats on July 14, 2009, included an additional $100 million to combat fraud and abuse as well as increased mandates for regulatory oversight and provider compliance programs. The reform bill adopted by the Senate Health, Education, Labor and Pensions Committee on July 15 also embraced new enforcement measures, creating senior level positions at HHS and DOJ to coordinate oversight activities. The bills follow on the heels of an announcement in May by the Obama Administration that it had created an interagency task force to coordinate fraud and abuse enforcement.
These new enforcement initiatives and proposals add to an already burgeoning increase in enforcement initiatives at the state and national levels, raising the question of whether additional programs can actually have a substantial impact beyond those already underway to combat fraud and abuse in the health care sector.
The Deficit Reduction Act (DRA) of 2005 provided states with an incentive to enact False Claims Act statutes similar to the Federal False Claims Act, allowing states to retain 10% of any funds collected under such acts. The impact of the laws adopted in the wake of the DRA is unfolding now in many states and will no doubt lead to a significant jump in qui tam actions. After a hiatus caused by litigation challenging the program, CMS has continued to roll out the Recovery Audit Contractors Program (RAC) which retains contractors paid on a contingency basis to identify fraud and abuse in the Medicare program. With funding and a mandate from Congress, CMS also established the Medicaid Integrity Program. The program authorizes CMS contractors to use data mining and analysis techniques that combine health care quality indicators, billing practices, and Medicaid reimbursement rules to predict aberrant billing practices in order to identify providers for audit.
At the state level, Attorneys General as well as state Medicaid fraud offices are also turning to data mining and analysis, enhancing their capacity to identify fraud and target their investigations.[1] State Attorneys General have increased their cooperation nationally, heightening the effectiveness of investigations and actions against corporations that conduct business in multiple states.
Whether increased enforcement funds and cooperation among federal agencies will actually produce significant dollars for health reform remains to be seen. But without question, the combined effect of mounting federal and state enforcement efforts has substantially increased the stakes for health care providers in undertaking a proactive approach to compliance. Indeed, growing use by federal and state enforcement agencies on data mining and analysis challenges providers to determine how they can use their own internal data to identify compliance problems and address them in advance of government action.[2]
[1] Using Data to Advance Compliance: Emerging Practices in Industry and Government
June 4, 2008
Seton Hall Law’s Center for Health & Pharmaceutical Law & Policy program focused on best practices by industry to use data for compliance, and government use of data mining and analysis to enhance oversight. Lori Queisser, Senior Vice President, Global Compliance & Business Practices of Schering Plough and Eileen Erdos, Principal of Ernst and Young, provided insight about how industry can use data to inform internal compliance programs. James Sheehan, New York State Medicaid Inspector General and John Krayniak, Assistant Attorney General, New Jersey Medicaid Fraud Control Unit, spoke about government initiatives to use data to target and pursue enforcement. The program, by invitation only, afforded industry counsel the opportunity to have a dialogue with the region’s two leading state prosecutors. The point being, that the success of enforcement initiatives is not only measured in prosecutions, but also in industry tailoring its behavior to be in compliance.
[2] Using Data to Advance Compliance
On March 16, 2009, the Center for Health and Pharmaceutical Law & Policy co-sponsored a program with KPMG on Using Data to Advance Compliance. The program, held in New York City for an audience comprised primarily of hospital leaders in compliance, finance, and in-house legal services, featured a presentation by James Sheehan, Medicaid Inspector General for New York State, who discussed how the Office of Medicaid Inspector General is using data to target and pursue investigations. Experts from KPMG presented practical, concrete strategies for how facilities can use data to advance internal compliance efforts. Ed Kornreich, a partner at Proskauer Rose, examined the implications of data mining for Board fiduciary duties.
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