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A proposal by the federal government could mean that hospitals and others will face fines of more than $10,000 for not reporting disciplinary actions against physicians to the National Practi tioner Data Bank.
The Health Resources and Services Adminis tra tion, part of the Department of Health and Human Services in Washington, DC, has proposed a system in which hospitals would be subject to federal civil financial penalties for failing to report disciplinary actions taken against physicians and dentists.
The HHS Office of the Inspector General recommended such a system recently in response to reports that hospitals and managed care organizations are not reporting all disciplinary actions.
The inspector general recommended a system in which hospitals and managed care groups would be fined up to $10,000 for each failure to report, but the Health Resources and Services Administration is considering a higher fine and broadening the scope of who is required to report. A spokesman for the administration says the proposal is under internal review but declined further comment.
The U.S. Department of Justice (DOJ) has misused the False Claims Act in pursuing medical fraud, according to a report from the General Accounting Office. The report alleges the Depart ment of Justice has been capricious with the False Claims Act, often using it against providers only because they were large, making them easy targets.
Individual attorneys, along with the DOJ, have used the False Claims Act in recent years as a powerful weapon to combat health care fraud. The DOJ issued guidance in 1998 to help U.S. attorneys across the country use the False Claims Act properly, but the recent report from the GAO says the attorneys are not following those guidelines closely enough. Compliance with the guidelines "may be superficial," according to the GAO report.
GAO officials reviewed the activities of eight U.S. attorneys’ offices and found that compliance with the guidelines varied. In five offices, GAO investigators found that letters had been sent to large numbers of hospitals implying violations of the False Claims Act, even though the attorneys had no evidence to suggest those violations.
One of the U.S. attorneys’ offices had notified 24 hospitals in 1997 that they were being investigated for violations of the False Claims Act, but investigators learned that the hospitals had been targeted only because they were the largest billers of Medicare in the state and not because there was evidence of any specific fraud.
Reacting to the GAO report, American Hos pital Association president Dick Davidson says it supports the association’s previously stated position that hospitals had been unfairly targeted.
If your hospital administrators had the bright idea that they could encourage physicians to cut costs by passing on some of the savings to them, you might want to let them know it’s not such a great idea after all. Federal regulators have issued a stern warning about such practices, threatening to go after hospitals that participate in such "gainsharing" arrangements.
The Health and Human Services (HHS) Office of the Inspector General issued a special advisory bulletin warning against gainsharing. The bulletin acknowledges that hospitals have a legitimate interest in encouraging physicians to eliminate unnecessary costs, but when Medicare and Medicaid payments are involved, the HHS makes clear that gainsharing is not allowed. Providers who make gainsharing payments to physicians can be fined and face other penalties, possibly even dismissal from participation in Medicaid and Medicare.
Gainsharing is not allowed because it poses too much risk of abuse and could adversely affect patient care, according to the HHS. In particular, gainsharing could lead to rewarding physicians for patient referrals.
The Office of the Inspector General issued the bulletin after receiving a number of queries about the legality of such arrangements. Gainsharing could be acceptable if there were regulatory safeguards to keep the system from being abused, but that would require congressional action before the HHS could allow it.
A new study suggests that the cost of malpractice insurance for physicians will increase substantially if Congress votes to eliminate managed care’s current defense against state causes of action.
The report comes from the Tillinghast-Towers Perrin consulting firm in Rockville, MD. Physi cian malpractice costs will rise 8% to 20% if patients are able to sue managed care companies, according to the analysis. Such lawsuits currently are prevented in most cases by the Employee Retirement Income Security Act (ERISA), but Congress is considering lifting that restriction.
A change in the ERISA law does not directly affect physicians, but the Tillinghast report says an increase in lawsuits against managed care companies inevitably will involve an increase in lawsuits against individual physicians and physician practices. Physicians will be named along with the managed care companies. Under the current ERISA prohibition, Tillinghast says, some potential cases are never filed because the managed care company is seen as the main wrongdoer and the physician is only a secondary party. But if the plaintiff is able to sue the managed care company, physicians will be named also.
The Health Care Financing Administration (HCFA) in Baltimore announced recently that it now formally recognizes the Joint Commission on Accreditation of Healthcare Organizations’ hospice accreditation program, easing some administrative burdens for hospice providers.
HCFA will consider a hospice provider to be in compliance with the Conditions of Participation for hospices when the provider achieves accreditation through the Joint Commission survey process. As of September 14, 1999, hospice organiza - tions were eligible to seek deemed status. That includes the 1,100 hospice organizations accredited by the Joint Commission.
A hospice organization choosing the deemed status option will be evaluated by the Joint Commission using Joint Commission standards that include the Medicare Conditions of Partici pation and standards for hospice organizations. Accreditation remains voluntary, and seeking deemed status through accreditation is an option, not a requirement for Medicare certification.
Strategies for Successful JCAHO Homecare Accred - i ta tion 1999-2000 is a step-by-step guide to compliance with the Joint Commission on the Accreditation of Healthcare Organizations’ 1999-2000 standards. It includes case studies with tips and advice from your peers who have survived the survey. Call (800) 688-2421 or e-mail American Health Consultants at customerservice@ahcpub. com.