On May 20, 2009, President Obama signed the Fraud Enforcement and Recovery Act expanding protections for whistleblowers exposing fraud in federal contracting. The FERA was originally designed to combat mortgage fraud, but also expands the whistleblower protections afforded by the False Claims Act. Among other provisions, the FERA no longer allows companies to use subcontractors to avoid liability under anti-fraud laws and extends whistleblower protection to contractors, subcontractors, and agents reporting fraud. Importantly, the FERA eliminates the requirement for “specific intent” to defraud the government, and instead clarifies that a person is liable under the False Claims Act when he or she knowingly makes a false claim to obtain money or property, any part of which is provided by the government.
Attorney General Eric Holder and HHS Secretary Kathleen Sebelius announced the formation of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) as a collaboration between federal agencies, such as HHS and the Department of Justice, to fight Medicare fraud. The HEAT team will focus on prevention and training for providers on how to identify and avoid fraud. Read the press release on HEAT.
In an Advisory Opinion posted on May 21, the OIG said a hospital could compensate certain physicians who provide care to uninsured patients without the threat of sanctions.
The Opinion centered around an arrangement whereby a non-profit, 400-bed hospital proposed to compensate on-call physicians who provide care to indigent and uninsured patients. The hospital cited a shortage of physicians available to provide the requested services due in part to lack of reimbursement and increased liability for the services performed as reasons for the proposed arrangement.
In issuing the Opinion, the OIG found that the proposed arrangement presented a low risk of fraud and abuse because the hospital provided sufficient safeguards to reduce the risk that it would violate the Anti-Kickback Statute. Factors that supported the OIG’s conclusion included the fact that the hospital certified that the compensation would be fair market value, without regard to business generated between the parties; that the hospital had legitimate reasons for providing the compensation; that the compensation would be offered uniformly to all physicians who meet the criteria for receiving payment; and that the proposed arrangement would promote a public benefit by preventing additional on-call shortages.
The complete Advisory Opinion can be accessed here.
The Office of the National Coordinator for Health Information Technology recently published an operating plan to meet all the statutory requirements of the HITECH Act and Recovery Act. While we continue to say “don’t do anything yet”, it looks like providers, health plans and entities that furnish services to providers and health plans should be ready to make significant changes to their policies and practices relating to information technology beginning in mid-August, 2009. The Implementation Plan can be viewed here.
Health systems and other employers are responding to the H1N1 influenza outbreak by developing call-in lines for sick employees to track the spread of the flu among workers. Employers are also implementing policies that encourage employees to stay home if they have the flu or have been exposed to the virus. In some such policies, workers are being told that absences in connection with H1N1 will not be charged as “occurrences” under occurrence-based absenteeism policies or charged against sick time. The Centers for Disease Control have developed a workplace planning web page to provide employers with some guidance. If you need assistance developing policies in response to H1N1, please contact vB&R Labor and Employment Attorneys Doris Brosnan, Dan Dennehy, or Sarah Platt.
The Administration released the budget proposal for fiscal year 2010 on May 7, and it provides a $1.7 million multi-year funding increase with an additional $311 million in fiscal year 2010 to fight fraud and abuse. This funding, according to HHS Secretary Kathleen Sebelius, could save an estimated $2.7 billion within the Medicare Advantage and Medicare prescription drug programs. HHS estimates that for every $1 spent to stop fraud in the system, $1.55 is saved.
For more information on the Administration’s budget proposal, click here.
You can view the full 1228 page proposed rule here, but a few highlights from the proposed rule follow below.
- CMS plans to add four new measures, retire one existing measure, and combine two measures that hospitals must report in FY 2010 to receive the full Inpatient Prospective Payment System (“IPPS”) market basket update for FY 2011.
- CMS plans to update hospital rates for general acute care hospitals under the IPPS with a 2.1% increase for inflation and a 1.9% reduction for a documentation and coding adjustment, for a net increase of 0.2% for FY 2010.
- CMS plans to update payment rates to long-term care hospitals (“LTCH”) under the LTCH PPS with a 2.4% increase for inflation and a 1.8% reduction for a documentation and coding adjustment, for a net increase of 0.6% for FY 2010.
The documentation and coding adjustments are part of CMS’s goal of achieving budget neutrality following changes in hospital documentation and coding practices after the adoption of the MS-DRG and MS-LTCH-DRG classification systems. These systems led to changes in documentation and coding practices that result in higher aggregate payments to hospitals, but which do not reflect an increase in patients’ severity of illness. An additional 6.6% in adjustments for acute care hospitals will be needed for FY 2011 and 2012 to reach the Medicare Actuary’s estimate of a necessary 8.5% adjustment to achieve budget neutrality. Comments to these proposals and other changes in the propose rule are due on June 30, 2009.
The FTC has again delayed the enforcement of the Red Flag Rules, giving creditors (which potentially includes health care providers) until August 1, 2009 to comply.
Among the options under consideration are bonus payments to primary care providers and surgeons practicing in underserved areas. According to the document released by the Senate Finance Committee on April 29, 2009, providers who “furnish at least 60% of their services in specified ambulatory settings would receive a bonus of at least 5% over the fee schedule amount for providing certain E/M services.” Additionally, general surgeons who provide services in “newly defined rural general surgeon scarcity areas” would receive 5% bonus “or some other amount” over the fee schedule for services provided between January 1, 2010 and December 31, 2014. While these bonuses would likely be offset by pay cuts for other fee schedule services in accordance with MedPAC budget neutrality recommendations, the document leaves open the option for alternative funding sources.
The complete report discussing these and other policy options can be accessed here. According to a press release issued by the Committee, public comments on the policy options outlined in the document may be directed to Health_Reform@finance-dem.senate.gov by May 15, 2009.
