COVER STORY Af­ter a cen­tury of po­lit­i­cal bat­tles, Democrats last week did what some said was im­pos­si­ble: de­liv­ered a sweep­ing over­haul of the U.S. health­care sys­tem.

Re­form law de­liv­ers ammo to bat­tle fraud

Modern Healthcare - - Editorial - Gregg Blesch

In the hours be­fore the House of Rep­re­sen­ta­tives sent the health­care over­haul to the pres­i­dent’s desk, Democrats de­flected a Repub­li­can amend­ment to “sus­pend new taxes un­less Medi­care fraud is be­low 1%.” It was a po­lit­i­cal jab, given the fig­ure has been es­ti­mated to be 3% or even sev­eral times that amount.

But the bill Pres­i­dent Barack Obama signed into law and the set of House-re­quested fixes the Se­nate ap­proved March 25 do seek to de­liver on the pres­i­dent’s prom­ise to tighten the gov­ern­ment’s grip on Medi­care and Med­i­caid funds lost to fraud, waste and abuse.

Fraud en­force­ment will be bol­stered by an ad­di­tional $350 mil­lion through fis­cal 2020, with nearly a third of the new money dis­bursed in fis­cal 2011.

The law also ex­tends the reach of the False Claims Act to the pre­mium sub­si­dies and other fed­eral dol­lars that will flow to pri­vate in­sur­ance com­pa­nies when the new in­sur­ance ex­changes go live.

That means the gov­ern­ment can pur­sue triple dam­ages when health plans don’t com­ply with the re­quire­ments of the ex­change, and in­vites whis­tle-blower law­suits to rat out and pun­ish those that don’t.

The False Claims Act also is amended to make it harder for de­fen­dants to de­flect whis­tle-blower law­suits by ar­gu­ing the in­for­ma­tion brought forth was in the pub­lic realm.

And the leg­is­la­tion un­leashes the CMS’ pay­ment con­trac­tors to con­duct med­i­cal re­views of claims be­fore pay­ing them. The con­trac­tors have been con­fined to do­ing so only when there’s a like­li­hood of sig­nif­i­cant and sus­tained im­proper billing or in or­der to cal­cu­late a gen­eral rate of pay­ment er­rors, a cat­e­gory that in­cludes but isn’t con­fined to fraud.

Last Novem­ber, by the way, HHS es­ti­mated the Medi­care er­ror rate was 12% (Nov. 23, 2009, p. 6).

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