LE­GAL:

Rule would give new force to worker al­le­ga­tions of Medi­care over­pay­ment

Modern Healthcare - - FRONT PAGE - Joe Carl­son

Health­care providers and sup­pli­ers have an­other pow­er­ful rea­son to se­ri­ously ex­am­ine al­le­ga­tions of im­proper pay­ments brought for­ward by em­ploy­ees. Un­der the newly pro­posed 60-day re­pay­ment rule, hos­pi­tals, physi­cian prac­tices and health­care sup­pli­ers could face triple dam­ages and other pun­ish­ments un­der the False Claims Act if they fail to in­ves­ti­gate em­ployee al­le­ga­tions of Medi­care over­pay­ments—even when over­pay­ments are in­ad­ver­tent and not the re­sult of fraud.

Not quickly in­ves­ti­gat­ing al­leged over­pay­ments could also trig­ger ex­clu­sion from Medi­care un­der the au­thor­ity to im­pose civil mon­e­tary penal­ties, ac­cord­ing to the pro­posed rule.

“Fail­ure to make a rea­son­able in­quiry, in­clud­ing fail­ure to con­duct such in­quiry with all de­lib­er­ate speed af­ter ob­tain­ing the in­for­ma­tion, could re­sult in the provider or sup­plier know­ingly retaining an over­pay­ment be­cause it acted in reck­less dis­re­gard or de­lib­er­ate ig­no­rance of whether it re­ceived such an over­pay­ment,” the pro­posed rule states, adding later that “know­ingly” retaining over­pay­ments may trig­ger False Claims li­a­bil­ity.

The new reg­u­la­tory wrin­kle con­fer­ring re­spon­si­bil­ity to in­ves­ti­gate claims of over­pay­ments comes em­bed­ded in HHS’ rule in­tended to give providers a def­i­nite time frame in which to vol­un­tar­ily re­turn er­ro­neous pay­ments from Medi­care.

Over­pay­ments cov­ered by the rule would in­clude claims for in­cor­rect ser­vice dates, du­pli­cate pay­ments, er­ro­neous med­i­cal cod­ing, in­suf­fi­cient doc­u­men­ta­tion or claims lack­ing med­i­cal ne­ces­sity.

HHS of­fi­cials es­ti­mate that about 125,000 providers a year would have to re­turn over­pay­ments un­der the new reg­u­la­tion, which re­quires such pay­ments be made within 60 days of providers learn­ing of them.

The public has 60 days to com­ment on the rule, which was pub­lished Feb. 16 in the Fed­eral Reg­is­ter.

HHS Sec­re­tary Kath­leen Se­be­lius an­nounced the rule dur­ing a Feb. 14 news con­fer­ence that was held with U.S. At­tor­ney Gen­eral Eric Holder to tout the fed­eral gov­ern­ment’s record-break­ing re­sults in fight­ing health­care fraud in fis­cal 2011.

Se­be­lius said rules such as the 60-day re­pay­ment re­quire­ment should cut down on the need for tra­di­tional pay-and-chase en­force­ment.

The 60-day re­pay­ment re­quire­ment was in­cluded as a gen­eral pro­vi­sion in the Pa­tient Pro­tec­tion and Af­ford­able Care Act in March 2010, and has been de­bated among health­care ex­perts since then, with much of the scru­tiny re­lated to em­ployee tips.

Un­like black-and-white dis­clo­sures from au­di­tors or pay­ers, tips about po­ten­tial over­pay­ments from em­ploy­ees may in­tro­duce un­cer­tainty about when the in­for­ma­tion was truly “known” for the pur­poses of the rule, since such com­ments trickle up through com­pli­ance de­part­ments and may re­quire in­ter­nal in­ves­ti­ga­tions to con­firm.

Frank Sheeder, who chairs the health­care en­force­ment and com­pli­ance prac­tice at DLA Piper in Dal­las, said the rule states that the act of call­ing in a tip to a hot­line couldn’t trig­ger a re­pay­ment obli­ga­tion.

“When you have stud­ied it and quan­ti­fied it and you can write a check, that’s when you’ve iden­ti­fied it,” said Sheeder, who is also pres­i­dent of the Health Care Com­pli­ance As­so­ci­a­tion.

How­ever, Hank Walther, a part­ner with Jones Day in Washington and a for­mer deputy chief of the health­care fraud unit in the Jus­tice Depart­ment’s crim­i­nal fraud sec­tion, said the new rule could in­vite gov­ern­ment scru­tiny of com­plex in­ter­nal de­bates over mat­ters such as cod­ing of in­di­vid­ual ser­vices.

“There’s at least a risk for providers that gov­ern­ment would say that you were at least on no­tice when this one per­son chimed up and said you were cod­ing it im­prop­erly,” Walther said.

Mau­reen Mu­dron, deputy gen­eral coun­sel for the Amer­i­can Hospi­tal As­so­ci­a­tion, said the trade group is scru­ti­niz­ing the 60-day tim­ing rule, the im­pli­ca­tion of False Claims li­a­bil­ity and a pro­vi­sion that would al­low au­thor­i­ties to look back 10 years for re­pay­ment obli­ga­tions.

“We see this as an op­por­tu­nity to have some­thing use­ful for the field,” Mu­dron said. “What we are ex­am­in­ing in depth are those places where they are us­ing False Claims lan­guage. The in­ter­sec­tion with the False Claims Act makes this a very sig­nif­i­cant rule and process to ex­am­ine.”

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