Fraud & Abuse News for Your Practice


By Jason E. Lopata, Esq.

Received a take-back letter recently or had a claims audit by an RAC?  Amid the changes found with health care reform laws passed earlier this year are new fraud enforcement powers that have the potential for impacting all medical practices, big and small.  Recently, President Obama took steps to target Medicare and Medicaid fraud and cut down on wasteful healthcare spending.  On August 26, 2010, his administration outlined new federal enforcement efforts to combat healthcare fraud, stating that fraudulent conduct is costing taxpayers billions of dollars each year.  During a healthcare fraud summit in California, Attorney General Eric Holder Jr. and Health and Human Services Secretary Kathleen Sebelius said their agencies were jointly targeting fraud in the federal Medicare and Medicaid programs.

The government initiative, originally launched in May 2009, had so far produced more than 580 criminal convictions and recovered more than $2.5 billion in fraudulent proceeds.  However, while $835 million in questionable Medicare payments were identified by private contractors in 2007, the government managed to recover only $55 million (7 percent) according to a recent report from the Office of the Inspector General.  Congressional investigators found that the average investigation lasted 178 days, long enough for many cases to go cold, making it hard to identify the individuals involved or recover money owed taxpayers.  The Obama administration said it is now reorganizing contracts with private investigators and trying to help them coordinate better with claims processors and law enforcement.

As part of the recent efforts, The Centers for Medicare and Medicaid Services (CMS) expects to transition from some previously used private investigators to zone program integrity contractors (ZPICs) to solve many of the over-spending problems identified.  Two ZPICs became fully operational in February 2009, and all program safeguarding work will be transitioned to the remaining five by the end 0f 2010. The goal is to consolidate all Part A, B, C and D fraud-fighting activities under the ZPICs.   With the transition to more ZPIC enforcement, and the increased use of Recovery Audit Contractors (RACs), CMS is taking multiple avenues toward combating fraud and abuse.

But you’re a good doctor – not engaged in any fraudulent conduct.  How might this still affect your practice?  According to the new legislation, government overpayments must be reported and returned within 60 days of identification.  So constant monitoring for overpayment situations in your office is a must.  Further, since all government payments can be suspended by CMS pending a “credible allegation of fraud,” make certain that you are taking steps to not let the appearance of impropriety arise.  Lastly, HHS’ Office of the Interior General now has greater and broader subpoena power in the event of a government audit, where failure to timely reply to requests for information could be penalized up to $15,000 per day.  So should CMS request supporting documentation from your office in the event of an audit, take immediate measures to collect the data and submit it in a timely fashion.

Other steps your practice can take to prevent fraud include understanding and complying with all state and federal laws.  It sounds simple enough, but make sure that you are staying on top of all regulatory changes that may take place in your jurisdiction.   Also, create a culture of compliance in your office, making it a part of all partnership and staff meetings that take place, as well as employee training and education.   Part of that culture allows for the self-disclosure of any overpayments that are received from Medicare or Medicaid.  Another benefit of such an environment is that your practice does not have to fear for “whistleblowers,” since disclosure of misconduct is encouraged and addressed properly.  Practices that self-disclosure overpayments of government proceeds have more success working with CMS in resolving payment problems.

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