On January 6, 2017, several new regulatory exceptions to the beneficiary inducement statute went into effect. These regulations, published by the Department of Health and Human Services Office of Inspector General (OIG) in a final rule dated December 7, 2016,1 bring long awaited closure to many of the outstanding issues raised in the statutory versions of the exceptions implemented by the Affordable Care Act (ACA) and in the proposed regulations issued by the OIG on October 3, 2014.2 Several exceptions that may be of particular interest to children’s hospitals are highlighted below. Continue Reading New Regulatory Exceptions to the Beneficiary Inducement Statute
On Dec. 7, 2016, the U.S. Department of Health & Human Services Office of Inspector General (OIG) released an update to its 2000 policy regarding gifts of nominal value given to a Medicare or Medicaid beneficiary. The update increases the nominal value of gifts given to a Medicare or Medicaid beneficiary to $15 per occurrence and $75 in the aggregate for a year (the previous limit was $10 per occurrence and $50 in the aggregate). If a gift complies with these limits, the arrangement does not need to fit within a “safe harbor” to 42 U.S.C. §1320a-7b(b) (the federal anti-kickback statute). Continue Reading OIG updates policy regarding gifts of nominal value
The Office of the Inspector General (OIG) for the U.S. Department of Health & Human Services recently published its Fiscal Year 2016 Work Plan, which summarizes OIG’s priorities over the coming year. Notably, the 2016 Work Plan demonstrates the OIG’s expanded focus on delivery system reform and the effectiveness of alternate payment models, coordinated care programs, and value-based purchasing.
There were also noteworthy areas of new focus for several provider types, including skilled nursing facilities, hospice organizations, ambulatory surgical centers, and physician practices. Below we have highlighted a few key areas from the FY 2016 Work Plan that will likely impact these providers. Please note this is not intended to be a comprehensive summary of the 2016 Work Plan and is focused only on the new OIG focal areas for these certain providers. Continue Reading OIG issues FY 2016 Work Plan with more than 40 new focal areas
The Office of Inspector General (OIG) for the U.S. Department of Health & Human Services (HHS) issued a fraud alert on June 9, 2015, targeting physician compensation agreements that potentially violate the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b). The Anti-Kickback Statute prohibits remuneration of payment in exchange for referrals of patients receiving aid from federally funded healthcare programs (i.e. Medicare and Medicaid). The OIG alert references 12 recent settlements with individual physicians who entered into “questionable” medical directorship and office staff arrangements. The key concern in those cases centered on individual physicians entering into arrangements where the compensation did not “reflect [the] fair market value for bona fide services the physicians actually provide[d].” Continue Reading OIG fraud alert regarding compensation agreements for physicians
The U.S. Department of Health & Human Services Office of Inspector General (OIG) issued a special fraud alert on June 9, 2015, stating that physician compensation arrangements may result in significant liability. Hopefully this is not a surprise to any physician or entity that treats federal health plan beneficiaries. However, given that, historically, OIG regulatory actions largely (although not exclusively) focused on the entity from which a physician received compensation, such as hospitals, laboratories, durable medical equipment suppliers, pharmacies, etc., the June 9, 2015, fraud alert highlights the potential for physician liability in these arrangements. Continue Reading Physician compensation caution
- Carefully review arrangements involving the receipt of cash in paper bags from service providers to which Medicare referrals are made. Also assess space rental and other arrangements with referral sources or destinations. www.justice.gov/usao/nj/Press/files/Onyenso,%20Chikezie%20Sentencing%20PR.html
A recent OIG Advisory Opinion (Adv. Op. 13-15) is, to a certain degree, more interesting for one of its footnotes than the body of the opinion itself. The footnote addresses a hotly debated issue, originally raised in an OIG Management Advisory Report (MAR) in 1991. That MAR took the position that an agreement between a hospital and a hospital-based physician group was a “suspect arrangement” under the Anti-Kickback Statute because the physician group was essentially required to split its revenue with the hospital–including requiring the group to provide uncompensated services to the hospital.
The OIG modified this position somewhat in the Supplement Compliance Program Guidance for Hospitals in 2005. In that compliance guidance, the OIG stated that an exclusive arrangement that required a hospital-based physician group to provide “reasonable administrative or limited clinical duties directly related to the hospital-based profession services at no or a reduced charge” would be permissible. The Compliance Guidance cautioned, however, that uncompensated or below-market-rate services would still be subject to “close scrutiny.” Continue Reading The OIG Advisory Opinion with the Fascinating Footnote
The Departments of Justice and Health and Human Services released a report last week showing that the government has achieved the highest return on investment in the 16-year history of the Health Care Fraud and Abuse (HCFAC) Program. According to the report, for every dollar spent on healthcare-related fraud and abuse investigations in the last three years, the government recovered $7.90.
The government recovered $4.2 billion from healthcare fraud enforcement efforts in FY 2012, up from $4.1 billion in FY 2011. The government continues to focus on reducing fraud and waste in the healthcare system.
“This was a record-breaking year for the Departments of Justice and Health and Human Services in our collaborative effort to crack down on health care fraud and protect valuable taxpayer dollars,” said Attorney General Holder. “In the past fiscal year, our relentless pursuit of health care fraud resulted in the disruption of an array of sophisticated fraud schemes and the recovery of more taxpayer dollars than ever before. This report demonstrates our serious commitment to prosecuting health care fraud and safeguarding our world-class health care programs from abuse.”
The government also touted the use of fraud-fighting tools authorized by the Affordable Care Act including enhanced screenings and enrollment requirements, increased data sharing across the government, expanded recovery efforts for overpayments and greater oversight of private insurance abuses. Screening of all 1.5 million Medicare-enrolled providers through the new Automated Provider Screening system began in FY 2012. The report states that nearly 150,000 ineligible providers have already been eliminated from Medicare’s billing system. Continue Reading Government Announces Record-Breaking Recoveries of Healthcare Fraud Money
President Barack Obama signed the American Taxpayer Relief Act of 2012, often called the “fiscal cliff” agreement, on January 2, 2013. Buried in the 59 pages of the act is a seven-line amendment to Section 1870 of the Social Security Act. This section bars recovery of overpayments from providers who are “without fault” and automatically deems a provider to be without fault three years from the year in which the original payment was made (unless there is evidence of fault). The three-year “without fault” limitation provision was enacted in 1972. Without much notice, the fiscal cliff deal extended this to five years.
The push for extension of the limitation began when the Department of Health and Human Service’s Office of Inspector General (OIG) issued a report recommending to the Centers for Medicare & Medicaid Services (CMS) that it pursue legislation to extend the statute of limitations. (See OIG, Obstacles to Collection of Millions in Medicare Overpayments.) This report blamed the time limitations on reopening and recovery of payments (four years and three years, respectively) as the reason why approximately $330 million in overpayments could not be recovered by CMS. The OIG also concluded that CMS’ inadequate guidance and monitoring of contractors was to blame. The Congressional Budget Office (CBO) has issued a report estimating that $500 million would be added to the federal treasury by 2022 as a result of the statute of limitation change. (See CBO, Detail on Estimated Budgetary Effects of Title VI.)
The biggest question for providers is how to deal with this change going forward. The following illustration demonstrates how the three-year limitation period applied: Provider was notified on February 22, 2009, that it had been paid for services provided to beneficiary. On January 2, 2013, the contractor determined that provider was overpaid for these services. If there was no evidence that provider acted fraudulently, this overpayment could not be recovered because under the statute of limitations the right to do so expired on December 31, 2012. Had the contractor determined that the provider was overpaid on any date prior to December 31, 2012, it would have been recoverable. (See Medicare Financial Management Manual, Chapter 3, Section 80.1.) Accordingly, any payments made in 2009 or before were not recoverable as of January 1, 2013.
In its Semi-Annual Report to Congress, OIG announced that expected recoveries for FY 2012 are $6.9 billion. The $6.9 billion consists of $923.8 million in audit receivables and $6 billion in investigative receivables. The investigative receivables include criminal restitution, settlements pursuant to False Claims Act (FCA) cases and Civil Monetary Penalty (CMP) actions, and other administrative recoveries related to provider self-disclosure matters. In addition to the monetary recoveries, OIG excluded 3,131 individuals and entities from participating in Federal health care programs.
At least half of the $6 billion in investigative receivables stems from the government’s $3 billion settlement with GlaxoSmithKline for alleged off-label marketing and promotion of several drugs. Other notable FCA settlements include:
- McKesson Corporation – $187 million FCA settlement for alleged inflation of prescription drug prices;
- AmMed Direct, LLC – $18 million FCA settlement for allegedly fraudulent practices with its diabetic testing supplies;
- AHS Hospital Corporation et al. – $8.9 million FCA settlement for allegedly improper admission of patients to the hospital rather than placing them on observation and evaluation status;
- Walgreens – $7.9 million FCA settlement for alleged kickbacks to beneficiaries to induce them to transfer their prescriptions to Walgreens; and
- Hospice Care of Kansas – $6.1 million FCA settlement for alleged submission of false claims for services provided to beneficiaries that did not meet hospice eligibility criteria.
OIG also noted that during this reporting period it settled several cases under its CMP authority, which essentially mirrors the FCA, for a total recovery of $6.7 million. Additionally, OIG recovered $53.3 million through its self-disclosure protocol, most of which is attributed to one settlement with Tenet Healthcare Corporation for $42,750,000.
Our Insight. Your Advantage. On page 38 of this report, OIG displays two charts that summarize the investigative outcomes over the last five years. The first chart shows that OIG’s civil and criminal actions went from a total of 917 in FY 2008 to 1,145 in FY 2012. The second chart shows that total receivables in FY 2008 were $3.2 billion, compared to total projected receivables in FY 2012 of $6 billion. Clearly, the government’s civil and criminal enforcement efforts are not subsiding and its audit activities are also on the rise. Most likely, monetary recoveries for FY 2013 will be greater than this year’s projected recoveries of $6 billion.