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
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).