New fraud rules designed to give providers a break
'Innocent billing mistakes' should draw less fire
The nation's top health care fraud cop may not have let down its guard, but it has at least loosened the grip on its gun, so to speak. Responding to complaints from legislators and providers alike, the Office of the Inspector General at the Department of Health and Human Services has issued guidelines that outline and set limits on how federal investigators will pursue cases of alleged Medicare and Medicaid fraud.
These new guidelines come after repeated complaints from providers that they felt investigators had become overzealous in pursuing innocent billing mistakes through the False Claims Act, which allows triple damages and fines of up to $10,000 for defrauding or seeking to defraud the government. With such severe penalties, some physicians have argued, it usually pays to settle allegations of overbilling rather than fight and face possible False Claims prosecution.
This attitude had resulted in a legislative backlash in the form of a provider-backed bill, the Health Claims Guidance Act, increasing the government's burden of proof needed to prove an overpayment was the result of an intent to commit fraud rather than a simple billing error while also limiting penalties for inappropriate payments.
Reacting to the OIG's new investigation guidelines, Rep. William Delahunt (D-MA), one of the bill's primary co-sponsors, says he is no longer moving the proposal forward. "You could say we're prepared take a time out to watch and see what happens," says a Delahunt staffer.
"This is a victory for every honest health care provider in the country and for the patients who depend upon them," said Rep. Lamar Smith, (R-TX). "The problem was created by the Justice Department and needed to be solved by the Justice Department. Publication of these guidelines pretty much eliminates the need for the health claims legislation. "
Under the new guidelines, prosecutors will first determine that providers knowingly submitted fraudulent claims before invoking the False Claims Act. Additionally, the OIG will establish minimum overpayment dollar thresholds and/or percentage-of-billings error rates a provider has to meet before being targeted in a major fraud investigation, with those falling under the threshold simply being referred to their Medicare carrier to recover the overpayments.
"It's kind of like deciding who goes on the ride at Disneyland," says a spokesperson for the OIG. "We've drawn a figurative line that says, if you are not this tall, then we assume you simply made a billing mistake and did not intend to defraud the government."
OIG memo outlines protocol
According to a June 3 memo from Inspector General June Gibbs Brown, the OIG will adhere to the guidelines listed below when conducting national investigations of alleged widespread patterns of fraud and abuse among Medicare and Medicaid providers.
Gibbs says these "best practices" guidelines are to be applied to every major national fraud project the OIG is involved in. One caveat: The agency reserves the right not to adhere to some guidelines in a specific investigation if appropriate. However, any future deviation from these guidelines must be approved in advance by the Deputy Inspector General for Investigations in consultation with other components of the OIG, instructs Gibbs.
Here are some of the major standards the agency will use to determine whether to investigate a provider for possible fraudulent activities:
1. Minimum thresholds. The OIG will set an appropriate minimum monetary overpayment threshold and/or provider percentage error rate that justifies including a provider in a national investigation project.
The threshold will vary from project to project and will be based on factors such as Medicare and/or Medicaid revenues involved, prior audits and notices to the provider community, provider size, number of erroneous claims, and amount of potential overpayment liability.
"This minimum threshold will be used as a guideline for determining which health care provi ders the OIG will initially refer to the appropriate contractor (carrier or fiscal intermediary) for an overpayment recoupment (if any)," says the memo.
Suspect providers with overpayments or claim error rates above the threshold can expect to be targeted by the Department of Justice for possible criminal prosecution.
2. Equitable treatment of providers. Providers involved in all national projects are to be treated the same, "consistent with the prerogatives vested in the various United States Attorneys," instructs Gibbs. As such, "investigative protocols and settlement agreement terms should be consistently applied to minimize variations among judicial districts."
While the OIG wants settlement agreements to be consistent, it also favors establishing a graduated scale of appropriate compliance enforcement measures based on such criteria as the size of the provider and scope of the misconduct.
In cases involving a criminal conviction or civil penalty, the OIG will determine appropriate compliance. However, in other instances where the OIG simply refers a provider to the (Medicare) contractors to recover an overpayment, the OIG will not institute any additional compliance punishments.
3. Provider guidance and communication. When appropriate, and only if all involved law enforcement agencies agree, the OIG will inform representatives of the affected health care industry or provider community about the pending investigation before formally initiating a national project.
4. Assess sufficiency of legal theory. Before sharing any data or information about the possible development of a national project, the OIG will first determine if there is a legal basis and sufficient reason to institute an enforcement initiative against a provider. As part of this legal review, the OIG will consider such things as applicable statutes, regulations, program guidance and communications, de minimus thresholds, sufficiency and availability of data, case law, statute-of-limitation issues, appropriate documentation, and burden-of-proof issues.
5. Central point of contact. The OIG will designate a central point of contact from each OIG component involved in a national project to coordinate responses on important questions or issues related to that project as they may arise. The OIG will inform the Department Of Justice and any other law enforcement agency involved in the national project of these points of contact.
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