OIG outlines coming attack on health care fraud
June 28, 1999
OIG outlines coming attack on health care fraud
An exclusive look at the Inspector General’s latest blueprint for enforcement action
The federal government’s much ballyhooed success at reducing health care fraud has only whetted its appetite, and Compliance Hotline has learned specifics about what you can expect over the next few months. Far from slowing its recent initiatives, the surge in convictions, settlements ,and exclusions all but guarantees these efforts actually will increase, McCarty Thornton, Senior Counsel to the Health and Human Services (HHS) Office of Inspector General (OIG) told a group of about 40 health care attorneys earlier this month.
In a frank discussion before the Practicing Law Institute’s Health Care Fraud & Abuse Conference in Washington, DC, June 17, Thornton sized up ongoing OIG investigations and previewed a range of other OIG initiatives from voluntary disclosure to a soon-to-be-released advisory on gainsharing.
Thornton said Medicare and Medicaid anti-fraud activities have saved $17 billion since the OIG’s funding was boosted two years ago. "Results like this give it a lifetime that goes on for many many years," he declared. "The credenzas of our attorneys are still stacked with very good cases."
Here is a rundown of what Thornton says the OIG now has on its plate:
Gainsharing. Thornton says the OIG is poised to address the issue of gainsharing,’ which looks at incentives offered to hospital physicians to bring them in line with the goals of the hospital. An OIG spokesman confirmed that an advisory will be issued "within the next few weeks" but would not specify the form it will take. Patient anti-dumping statute. The government’s efforts to nail providers under the anti-dumping statute will continue, despite recent criticism from physician groups. Prior to 1998, the OIG never had more than 18 of these settlements in a single year, but the recent increase in OIG staff has changed that picture dramatically. "Last year, we settled 53 cases under the patient anti-dumping statute, and this year that number will probably hit 70 or more," says Thornton. PPS Transfer Project. One of the new initiatives the OIG is now pushing hard is the PPS transfer project, which is looking at cases where transferring hospitals received the full DRG payment instead of just the per diem. Thornton says his office is looking at about 200 hospitals, but there have been no settlements to date. Bacterial pneumonia upcoding project. Also under way is the OIG’s bacterial pneumonia upcoding project. According to Thornton, there are numerous instances where DRG-79 (the most costly form of pneumonia) was billed at 80% by certain facilities, while others in the same locality billed it at 3%. "Maybe there are explanations for that but not always," he says. That investigation is also zeroing in on about 200 hospitals. So far, there have only been several settlements worth about $5 million. Stark "self-referral" laws. Thornton says existing "self-referral" laws are "too complicated and should be simplified" and that certain loopholes also should be eliminated. He predicts legislative changes this year but does not favor wholesale repeal. "Our view is that the antikickback statute is not a sufficient means to control the rewarding of physicians," he says. "Although the Stark statute has had several areas of ambiguity, it has established some core principles that have been very effective and very useful over the last few years." Anti-kickback issues. The OIG hopes to publish a series of new safe harbors shortly that will address investments in group practices and ambulatory surgical centers (ASCs). Many of these safe harbors will be "fairly broad," says Thornton. They will include investments in entities in underserved areas as well as physician recruitment and sale of physician practices in these areas. "You can gauge our basic attitude about ASCs in advisory opinion 98-12," he adds. "We look at what the referring party is actually putting into the deal in terms of needed services that are actually rendered and documented as opposed to what they are getting out," he explains. "If that is out of synch, that’s when our kickback bells go off." Physicians at Teaching Hospitals (PATH). The OIG’s ongoing PATH investigation has garnered five settlements worth $75 million, but Thornton says his office does not plan to extend that net any further. "There are another 30 hospitals being audited, but that is all we intend to do," he reports. He also defends the investigation against charges that it has been applying a new rule retroactively. "We hold people responsible to the rule that was in effect at the time," he says. "We are looking at the instructions that [fiscal intermediaries] were issuing in that locality at the time." Voluntary disclosure. Thornton calls the OIG’s voluntary disclosure program "a disappointment" with only about 20 applicants and a handful of resolutions to date. But he says Inspector General June Gibbs Brown has made it very clear she wants this program to succeed. Providers should bear in mind, he says, that the OIG knows the best way to kill this program would be to "come down hard" on the initial entrants. "There are no guarantees, and it is not an amnesty program," he adds, "but we will give it very substantial weight if there is a voluntary disclosure." Three-day window project. Thornton defends the scope of the OIG’s three-day window project on the basis that problems turned up in audits in the 1980s were "still rampant" in the 1990s. The result of that investigation has been 1,800 settlements worth $60 million to date. "It involves a lot of hospitals because the notice that was issued by the government was very clear for a decade," he says. "People were not getting the message."Thornton counsels attorneys that the presence of compliance programs will be considered when his office settles cases. "One should not underestimate the effect of a good compliance plan on the decision-making process of a prosecutor," he says. "That is evidence of the providers’ good faith in attempting to abide by the rule."
He also notes that the $100 million devoted to Medicare and Medicaid enforcement activities this year will hit $160 million in three years and says that number may continue to rise. "The effect of this is quite dramatic," he says. The size of the OIG staff has doubled in recent years and is moving from 26 states three years ago to all 50 states.
Fueling this fire is a surge in the number of qui tam filings in health care, which has "gone through the roof," says Thornton. These suits, which numbered 17 in 1992, reached almost 300 last year and included many "high-dollar cases" the government never would have found about otherwise.
But Thornton admits the "whistle-blower" law is "definitely not a perfect statute." Some of these suits are "riding on things we already know about," he says. "And sometimes we have government employees that instead of turning over the situation to their supervisor go out and file a qui tam suit. That is a separate problem."
Nevertheless, the combined effect has been unmistakable. In just two years, health care fraud convictions climbed from 140 to 260 while civil settlements increased from 250 to almost 1,000 and Medicare and Medicaid exclusions shot up from 1,400 to more than 3,000.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content