Modern Healthcare

Cough it up

Fraud law changes push providers to self-disclose

- 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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