Cough it up
Fraud law changes push providers to self-disclose
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.