1 2 3 4 Currently, the government is extremely focused on - PDF document

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Currently, the government is extremely focused on cracking down on health care fraud. The government created the Health Care Fraud Prevention and Enforcement Action Team ( “ HEAT ” ) in May 2009 as a way to increase coordination among government entities and optimize enforcement efforts. Fighting Medicare fraud has become a top priority for both the Department of Justice and HHS with the creation of HEAT. There are two main purposes of HEAT: (1) to assemble and strengthen significant resources across government entities to prevent waste, fraud and abuse in the Medicare and Medicaid programs, and crack down on individuals committing fraud, abusing the system, and stealing billions of dollars; and (2) to reduce increasing health care costs and improve the quality of health care delivered to individuals by eliminating perpetrators from the system who prey on beneficiaries and harm the solvency of Medicare and Medicaid programs. The HEAT initiative attempts to stop fraud before it happens and eliminate fraudulent individuals from participating in the Medicare program. Recently, HEAT posted a series of 11 short training videos to the OIG website. The videos cover high priority compliance topics, including the False Claims Act. In addition, in June 2011, President Obama launched the “ Campaign to Cut Waste. ” This campaign is focused on increasing accountability and transparency in government spending. The Campaign to Cut Waste includes two key initiatives: (1) create a new Oversight and Accountability board; and (2) hold regular cabinet meetings to report progress to the Vice President. The establishment of a new oversight and accountability board will help federal agencies improve their performance and reduce waste, fraud, and abuse across government. 5

The board will allow taxpayers the ability to track where their dollars are being spent and have confidence that the dollars are not being lost to waste, fraud, or abuse. The board will consist of 11 members, including agency Inspectors General, agency Chief Financial Officers or Deputy Secretaries, an official from the Office of Management & Budget, and any other members designated by President Obama. In addition, the campaign to cut waste requires cabinet members to report progress in cutting waste directly to the Vice President through regular meetings. Chief Operating Officers and Chief Financial Officers must also regularly report progress to the Office of Management and Budget. The Department of Justice is also extremely focused on using the False Claims Act as the primary tool to fight fraud. Whistleblowers (also known as qui tam relators) are private individuals who may receive 30% of any successful recovery when bringing an action on behalf of the government. In 2011, whistleblowers initiated 638 of 762 new matters (84%), which is more than in any previous year. Whistleblowers in 2011 earned more than $532 million from bringing these claims. More than $2.4 billion of the $3.03 billion recovered in FY 2011 came from settlements and judgments involving fraud against federal health care programs. 5

Whistleblowers (also known as qui tam relators) are private individuals who may receive 30% of any successful recovery when bringing an action on behalf of the government. In 2011, whistleblowers initiated 638 of 762 new matters (84%), which is more than in any previous year. Whistleblowers in 2011 earned more than $532 million from bringing these claims. More than $2.4 billion of the $3.03 billion recovered in FY 2011 came from settlements and judgments involving fraud against federal health care programs. 6

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Bottom line: FCA revisions make FCA suits more likely and easier for the government to bring. President Obama signed the Patient Protection and Affordable Care Act ( “ PPACA ” ) into law on March 23, 2010. Part of the reform law included provisions that will make it easier for the government to prosecute and prevent fraud and abuse in the health care market in order to control rising health care costs. PPACA broadened the FCA in three ways: (1) the law narrowed the scope of the public disclosure bar; (2) it increased liability for the retention of overpayments; and (3) it made all antikickback violations potential FCA violations. Overpayments PPACA also increased potential liability for the retention of overpayments. Overpayments are “ any funds that a person receives or retains under Title XVIII or XIX to which the person, after applicable reconciliation, is not entitled ” under Titles XVIII or XIX. 42 U.S.C. § 1320a-7k(d)(4)(B). Overpayments can result from otherwise “ innocent ” acts, including: • Payment when benefits have been exhausted, or during a period of non-entitlement; • Incorrect calculation of deductible or coinsurance; • Payment for noncovered or medically unnecessary items and services; • Duplicate charges or duplicate claims; • Incorrectly coded services; and • Primary payment in violation of Medicare as Secondary Payer rules. 42 U.S.C. § 1320a-7k(d)(4)(B) states that “ [t]he term ‘ overpayment ’ means any funds that a person receives or retains under subchapter XVIII or XIX to which the person, after applicable reconciliation, is not entitled under such subchapter. ” The False Claims Act prohibits knowingly and improperly avoiding or decreasing an obligation to pay or transmit money or property to the government. 31 U.S.C. § 3729(a)(1)(G). Section 6402 of PPACA makes overpayments not returned AND reported to the government within 60 days of their identification or when the next cost report is due, whichever is later, obligations that cannot be knowingly and improperly retained under the FCA. 42 U.S.C. § 1320a-7k(d)(2); Patient Protection and Affordable Care Act, Pub. L. No. 111-148, § 6402(d)(2). Any overpayment that has been retained after the deadline is considered an obligation under the False Claims Act. § 42 U.S.C. § 1320a-7k(d)(3); § 6402(d)(3). FERA defined knowingly as (1) actual knowledge of information; (2) deliberate ignorance of the truth or falsity of the information; or (3) reckless disregard of the truth or falsity of the information. Fraud Enforcement and Recovery Act, Pub. L. No. 111-21, § 4(a)(1)(G), 123 Stat. 1617, 1622 (amending 31 U.S.C. § 3729(a)). 31 U.S.C. § 3729(a)(1)(G) – “ (1) IN GENERAL – Subject to paragraph (2), any person who - . . . (G) knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government. . . . is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 . . ., plus 3 times the amount of damages which the Government sustains because of the act of that person. ” 42 U.S.C. § 1320a-7k(d)(2) – “ An overpayment must be reported and returned under paragraph (1) by the later of – (A) the date which is 60 days after the date on which the overpayment was identified; or (B) the date any corresponding cost report is due, if applicable. 42 U.S.C. § 1320a-7k(d)(3) – “ Any overpayment retained by a person after the deadline for reporting and returning the overpayment under paragraph (2) is an obligation (as defined in section 3729(b)(3) of title 31) for purposes of section 3729 of such title. ” Pub. L. No. 111-21, § 4(a)(1)(G), 123 Stat. 1617, 1622 – “ the terms ‘ knowing ’ and ‘ knowingly ’ – (A) mean that a person, with respect to information – (i) has actual knowledge of the information; (ii) acts in deliberate ignorance of the truth or falsity of the information; or (iii) acts in reckless disregard of the truth or falsity of the information. ” In addition, prior to PPACA, the FCA required a person to make an affirmative act to conceal an overpayment in order to be found liable of a FCA violation. However, an affirmative act of concealment is no longer required after PPACA. Therefore, FCA liability can now be based on merely not reporting and repaying an overpayment after a certain amount of time from “ identifying ” the overpayment. Liability includes penalties plus treble damages. 10

Health care providers must document the medical necessity of services rendered before submitting claims for reimbursement to the government. Any false or even deficient statement in documenting the medical necessity of a procedure can lead to FCA investigations and liability. 11