HHS unveils 10 new anti-fraud and abuse proposals
On Jan. 24, the White House announced 10 initiatives to be added to the federal government’s anti-fraud and abuse program for health care. There is no overall schedule for when these different legislative and regulatory initiatives go into effect. Physician’s Payment Update will keep you informed of new developments.
1. Eliminating excessive Medicare reimbursement for drugs. The Department of Health and Human Services (HHS) says it has uncovered a pattern where the official "list" price charged Medicare for 22 popular prescription drugs is actually higher than the real market rate. As a result, the federal government pays more than double the actual average wholesale prices for one-third of these prescriptions, and as much as 10 times the wholesale rate in some instances. Under new HHS regulations, Medicare will monitor future claims to ensure they are billed at the lowest market rate charged other payers.
2. Eliminating overpayments for epogen. HHS will reduce the Medicare reimbursement rate for epogen (a drug used for kidney dialysis patients) to reflect current market prices. HHS estimates this move will save some $100 million in annual Medicare payments.
3. Doubling audits to ensure providers are only reimbursed for appropriate costs. Currently, not all cost-based providers (e.g., hospitals, home health agencies, skilled nursing facilities) are audited. Under this proposal, providers that are reimbursed based on their actual costs will be assessed a fee to cover future HHS audits and any related settlement activities.
4. Competitive pricing. HHS will institute a nationwide competitive pricing program for equipment and non-physician services, aimed at lowering related Medicare costs.
5. Mental health benefits. Medicare mental health outpatients are sometimes wrongly billed for inpatient hospital or home services they do not receive. Under this proposed regulation, providers must certify that mental health services have been provided in the appropriate treatment setting before being paid.
6. Money penalties for false certification of need. The HHS Inspector General says some providers inappropriately certify that beneficiaries need outpatient mental health benefits and hospice services. This proposal would impose penalties on physicians who falsely certify their patients’ need for these two benefits.
7. Preventing providers from taking advantage of Medicare by declaring bankruptcy. Some providers file for bankruptcy to avoid paying Medicare-related fines or having to return illegal overpayments. Under this proposed regulation, Medicare will have priority over other claims when a provider that owes it money files bankruptcy.
8. Ending illegal provider "kickback" schemes. A "kickback" scheme consists of health care providers unnecessarily referring patients to ancillary providers in return for some kind of financial reward, contends HHS. While Congress has already established criminal penalties for these schemes, HHS will ask Congress to give federal prosecutors authority to obtain court orders putting an immediate halt to suspected kickback operations, while permitting them to bring civil as well as criminal charges against suspected violators.
9. Not paying private insurance claims. In the past, Medicare has wrongly paid medical claims of private insurers because it had no way of knowing the commercial carrier was the primary payer. HHS proposes to correct this situation by requiring insurers to report all Medicare beneficiaries they cover, thus allowing Medicare to recoup double the amount owed by insurers who purposely let Medicare pay claims the group plan should have made. HHS also would impose fines for not reporting no-fault or liability settlements for which Medicare should have been reimbursed.
10. Capitating payments for routine surgical procedures. HHS will expand the Health Care Financing Administration’s current "Centers of Excellence" demonstration project, in which Medicare receives volume discounts on certain surgical procedures in return for allowing participating hospitals to increase their market share and gain specialized clinical expertise.
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