As appeared in AHLA Connections, February 2010, Volume 14, Issue 2.

Given the advancing capabilities of recently operational auditing contractors and the significant increases in federal healthcare spending projected to be triggered by the passage of some version of a health reform bill, fraud and abuse enforcement activity will likely continue to trend upward in 2010.

Audit Contractors: This year may signal the end of the Recovery Audit Contractors (RACs) "ramp up" years. 2010 will be the first year in which RACs will begin operating in all 50 states; and accordingly, RACs will likely greatly increase their visibility by performing more unscheduled onsite visits to provider locations and initiating widespread Medicare claims audits. Likewise, the near analog of RACs, Medicaid Integrity Contractors (MICs), have already begun conducting audits and will continue to increase Medicaid auditing in 2010. MICs in particular are nearing the end of their five-year implementation plan (which began in 2006) and will be moving out of their start-up phase as they become increasingly operational.

Fraud and Abuse Modifications in Health Reform: Both versions of the health reform bills contain a number of provisions that would strengthen and enhance the government's enforcement capabilities. These provisions include: $10,000,000 in additional annual appropriations to the Department of Health and Human Services (HHS) Office of Inspector General (OIG), the Department of Justice (DOJ), and the Federal Bureau of Investigation; expanded OIG authority to broadly obtain "any supporting documentation necessary to validate claims"; new provisions permitting administrative penalties for beneficiaries who knowingly participate in healthcare fraud; mandatory reporting and returning of overpayments within 60 days after the overpayment was discovered or by the date of the cost report; civil monetary penalties for false statements or misrepresentations made by federal program providers or suppliers in applications and agreements; a provision clarifying that submitting a claim resulting from a violation of the Anti-Kickback Statute per se constitutes a false or fraudulent claim; and, finally, a provision that clarifies the intent threshold for a kickback violation such that an individual need not have specific intent or actual knowledge of the kickback prohibition to violate it.

Other notable issues to track: Last year, on October 1, 2009, many physician-owned entities that perform technical services "under arrangements" were required to divest, restructure, or halt referral streams in order to comply with the Stark Law. While we have not seen significant proposed modifications to the Stark Law in 2009, in its Calendar Year 2010 Physician Fee Schedule, the Centers for Medicare and Medicaid Services (CMS) stated that it is taking a second look at how the self-referral law regulates/restricts under arrangements and welcomed comments from the health community. Finally, anecdotally, the health law bar is also seeing an uptick in fraud enforcement of Medicare Part D related entities. The Fraud Enforcement and Recovery Act of 2009 (FERA) significantly expanded the government's ability to bring causes of actions under the False Claims Act against those who participate in federal healthcare programs as subcontractors. Given this expanded authority and the cost of the Medicare Advantage and Part D programs, increased enforcement of providers that submit claims to government-funded plans should not come as a surprise in 2010.

Jump to Page

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.