OIG report shows major initiatives still have legs
Anti-kickback enforcement, cost-report fraud, and EMTALA to grow in importance
Experts say that what's not in the Department of Health and Human Services' (HHS) Office of Inspector General's (OIG) semi-annual report might be just as important as what is. They warn that several enforcement activities not featured in the report, including anti-kickback enforcement and cost report fraud, are gaining momentum.
"All the national initiatives are still percolating on some level but beginning to wind down," says health care attorney Gabe Imperato of Broad & Cassel in Fort Lauderdale, FL. But he says that even as those initiatives are wrapped up, investigations into anti-kickback enforcement and cost report fraud will likely become more widespread. He adds that potential liability of alleged co-conspirators may be turning into a national trend, as well.
"Kickback relationships are picking up momentum both in volume and creative application of the statute," asserts Imperato. U.S. attorneys are experiencing some success involving violation of the kickback stature, he adds. "Some U.S. attorneys have discovered that these cases are not always that hard to make. I think we will see an increase in the volume of cases."
Imperato says those cases are also being applied in more creative ways. For example, he points to the plea agreements Olsten Corp., Melvile, NY entered into last summer that said their transaction with Columbia/HCA violated the kickback statute because they agreed to sell Columbia home health agencies at a below-fair-market price in return for management contracts.
According to attorney J.D. Epstein, the government continues to maintain that if any purpose of the transaction is to induce referrals, then it is a violation of the statute. He says that is the analysis used in the Third Circuit in Kansas City.
"That is the only Circuit that has ruled that if any purpose is to induce referrals then it is illegal," says Epstein of Vinson & Elkins in Houston. That particular issue is set to be reviewed by the Court of Appeals, and a lot may be hanging in the balance. "That is a big issue and continues to be a problem we wrestle with."
Imperato also expects to see more cost report enforcement action, including consultant involvement as co-conspirators. "There are many pending investigations that are winding their way to some conclusion," he says. But whether that includes attorneys is yet to be seen. "I don't necessarily expect the Kansas City case to be the beginning of a major nationwide initiative."
"The cost report issue is high-profile because it involves Nashville-based Quorum and Columbia/HCA," adds Epstein. "The government takes the position that there is no reason for a hospital ever to have a reserve cost report. They are just wrong about that, but that does not mean they won't continue to pursue it."
Epstein also points to the OIG's stepped-up enforcement of the Emergency Medical Treatment and Active Labor Act (EMTALA). "The industry is ripe for EMTALA cases," he warns. "You can turn almost every emergency room visit into a potential EMTALA violation."
Epstein stresses that it is too early to look past the OIG's major national initiatives. "The pneumonia national initiative is very active, and I think the PPS transfer initiative is also heating up," he says. He also points to the so-called "sale of sample" investigation that is looking into physicians selling sample drugs as a potential threat.
To date, the OIG's ongoing physicians at teaching hospitals (PATH) initiative has claimed $75 million in recoveries. The OIG's latest tally for the three-day window project is $71 million recovered through settlements with 2,660 hospitals.
In its semi-annual report for FY ’99, the OIG reports $12.6 billion in savings, including $11.9 billion in implemented recommendations, $251.5 million in audit disallowances, and $407.7 million in investigative receivables. The OIG also reports 2,976 exclusions of individuals and entities for fraud and abuse, as well as 401 convictions and 541 civil actions.
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