On Monday, TeamHealth agreed to pay $60 million to settle allegations that a company it acquired, IPC Healthcare "knowingly and systematically encouraged false billings by its hospitalists." The settlement is the latest in a string of False Claims Act cases that have been resolved this year. Last month, DOJ announced that MedStar Ambulance will pay $12.7 million to settle allegations that it had knowingly submitted false Medicare claims, and that Walgreens faces a $50 million settlement over allegations it encouraged government beneficiaries to use its pharmacies by offering them financial incentives.
When talking about fraud, intent is the key ingredient. Allegations of fraud or other criminal activity generally only arise “if there is evidence that there was a deliberate effort to game the system or to bill improperly, or there was some reckless disregard,” Deborah Gardner, a Boston-based attorney for Ropes & Gray, told Healthcare Dive.
Healthcare policy has seen a constant stream of change in the past decade from the HITECH Act to ICD-10 and MACRA. That change is unlikely to slow down under a new administration. With all these changes afoot, it has been especially difficult for providers to maintain compliance with Medicare and Medicaid requirements.
The government takes aim at fraud, waste, and abuse
In recent years, the Department of Justice (DoJ) and the Department of Health and Human Services (HHS) have stepped up enforcement actions when it comes to fraud, waste and abuse in Medicare and Medicaid.
In fiscal year 2016, the federal government recovered more than $3.3 billion in healthcare fraud judgments and settlements as well as in administrative impositions, according to a report from the HHS and DoJ Health Care Fraud and Abuse Control Program (HCFAC). HCFAC has recovered around $31 billion since the program was established in 1997 and nearly $18 billion of that has been recovered since 2009.
To aid enforcement activities, the government has established teams dedicated to catching those who would defraud public health programs. These include the Health Care Fraud Prevention and Enforcement Action Team and the Medicare Fraud Strike Force.
When HHS and DoJ issues statements talking of national takedowns that result in charges for hundreds of individuals, it can create a sense of uneasiness. However, when HCFAC reports on its enforcement activities, these can include criminal cases, civil litigation, False Claims Act proceedings, and administrative audits and investigations.
The average provider is much more likely to see scrutiny from an auditor with the HHS Office of the Inspector General (OIG) than they are to see the inside of a courtroom. While auditors can refer cases to outside agencies with prosecutorial authority, it is extremely rare, Don White, a senior public affairs specialist at HHS, told Healthcare Dive. Still, the process is “very inconvenient for providers.” In fiscal year 2016, audits led to the recovery of around $1.2 billion in overpayments.
Instructions unclear: Gray areas create confusion for providers
Despite their best efforts, it can be difficult for providers to remain fully compliant with various rules and regulations issued by the government. Change has occurred over the past several years at a particularly high rate with the introduction of new rules and regulations. And this is in an industry traditionally resistant to change.
The transition to ICD-10 was one such change that created a huge challenge for providers, Venson Wallin, a managing director for BDO Consulting, told Healthcare Dive. While the robust coding system could improve healthcare quality, it has created potential for providers to commit unintentional errors. A coding department might interpret medical records correctly almost all of the time, but it can cause headaches if in just one instance a government auditor makes a different interpretation, Wallin said. “When you add that level of sophistication, it does open up the system to potential errors.”
Gray area most frequently occurs when highly technical billing requirements are attached to national coverage determinations. In many instances, providers have little in the way of guidance from federal regulators. “The reality is there are areas where providers have to exercise judgment and rules aren’t as clear as they could be,” Kirsten Mayer, a Boston-based Ropes & Gray attorney, told Healthcare Dive.
Inconsistencies from between coverage determinations made by public health plans and private health plans can create further confusion, according to Gardner. One plan may allow providers to bill for a certain service delivered by a non-physician while another may not or a private payer may allow for certain care to be billed as separate services while Medicare requires that they be billed collectively. While private payers do not have the same latitude as the government to issue fines or recover overpayments, they are increasingly issuing denials, Wallin said.
Can the government do more to help providers achieve compliance?
Discrepancies found by OIG audits are generally not due to lack of trying on the part of providers. There are steps that providers can take to keep compliance programs up to snuff (Wallin discussed some of these steps with Healthcare Dive last July). However, many are already doing everything they can. “Providers have developed very robust compliance programs by and large,” Gardner said. “They are keenly aware of the risks of noncompliance given past enforcement.”
Achieving full compliance with a myriad of rules and regulations can be difficult if those rules and regulations are not well understood or well publicized. Many industry experts, including Wallin, Gardner, and Mayer, would like the government to offer more in the way of education and training.
CMS has taken a carrot-and-stick approach to encouraging compliance. For instance, the deadline for ICD-10 compliance was delayed due to unpreparedness among providers. More recently, CMS relaxed initial reporting requirements going into effect under MACRA. These have helped providers to become compliant, “but there are still some pretty pervasive sticks out there,” Wallin said.
It is possible the government changes its approach to more evenly balance the carrots and sticks, especially with significant change occurring in the executive branch. More guidance is also likely to become available as value-based care policies become more prominent. However, providers will likely continue to struggle with compliance as these changes take hold. “It is basically like turning a battleship around,” Wallin said. “You can do it, but it takes a little bit.”