Cough it up

Fraud law changes push providers to self-dis­close

Modern Healthcare - - THE WEEK IN HEALTHCARE - Beth Kutscher

Tenet Health Corp.’s $42.75 mil­lion set­tle­ment last week with the Jus­tice Depart­ment came out of the Dal­las-based hospi­tal gi­ant’s own self-polic­ing. Health­care lawyers say they ex­pect to see more such dis­clo­sures—and set­tle­ments—from health­care providers as the gov­ern­ment in­creases its scru­tiny on the in­dus­try. And it’s not just hospi­tal op­er­a­tors that are in the spot­light but also post-acute and long-term-care providers.

Re­cent changes in health­care fraud laws have sparked greater vig­i­lance. Un­der the Pa­tient Pro­tec­tion and Af­ford­able Care Act, providers must dis­close over­pay­ments within 60 days of iden­ti­fy­ing them or face sig­nif­i­cant penal­ties, in­clud­ing tre­ble dam­ages. A pro­posed rule from the CMS in Fe­bru­ary at­tempted to clar­ify providers’ obli­ga­tions un­der the law. Com­ments were due April 16.

“What those changes have done is put health­care providers on no­tice,” said Anna Griz­zle, a mem­ber of the law firm Bass, Berry & Sims. “It’s in health­care providers’ best in­ter­est to self-po­lice. Agen­cies will look fa­vor­ably on com­pa­nies that come for­ward.”

Yet Scott Becker, a part­ner at Mcguire­Woods, noted that the $43 mil­lion pay­ment is po­ten­tially chill­ing. “This be­comes a real im­ped­i­ment for some­one want­ing to come for­ward,” he said. “Peo­ple self-re­port and then wind up sur­prised at the size of the set­tle­ment. It’s be­come a reg­u­lar line-item in the bud­get.”

Tenet’s set­tle­ment came out of a 2007 re­view that un­cov­ered over­pay­ments at an in­pa­tient re­ha­bil­i­ta­tion unit at a Ge­or­gia fa­cil­ity; the over­pay­ments stemmed from ad­mit­ting pa­tients who could have been treated with a lower level of care, ac­cord­ing to a Tenet news re­lease.

Ul­ti­mately, the in­ves­ti­ga­tion found im­proper ad­mis­sions prac­tices at 25 re­ha­bil­i­ta­tion units from 2005 to 2007. Tenet re­ported the over­pay­ments to HHS’ in­spec­tor gen­eral’s of­fice as re­quired un­der a cor­po­rate in­tegrity agree­ment en­tered as part of a pre­vi­ous set­tle­ment.

The set­tle­ment is the first in re­cent years to in­volve in­pa­tient re­ha­bil­i­ta­tion ad­mis­sions, prompt­ing the ques­tion of whether the gov­ern­ment might take a closer look at this area, said Lau­rence Freed­man, a part­ner at Pat­ton Bogg.

Lisa Estrada, a part­ner at Ar­ent Fox, agreed the scru­tiny may in­crease. “This popped up in the OIG’S work plan as a new area of fo­cus,” she said. She added that is­sues of el­i­gi­bil­ity and level of care also have ap­peared in in­ves­ti­ga­tions of hos­pices and home health agen­cies, not­ing a $10.56 mil­lion De­cem­ber set­tle­ment with hospice Di­akon Lutheran So­cial Min­istries, Al­len­town, Pa.

Becker sug­gested that large health­care groups keep au­dits con­sis­tent across their fa­cil­i­ties in or­der to min­i­mize the po­ten­tial for a com­pli­ance breach. “Be­fore you self-re­port, you have to make sure you’re more aware of ev­ery­thing else go­ing on in the sys­tem,” he said.

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