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Expect the federal government’s full-court press against health care fraud to continue unabated, as the Bush administration continues its predecessor’s aggressive use of the False Claims Act (FCA).
"I don’t think we are going to see any major sea change in the enforcement of the fraud and abuse laws," says Lew Morris, an attorney with the Department of Health and Human Services Office of Inspector General (OIG). Morris recently spoke at the Health Care Compliance Association conference in Washington, DC.
Fighting fraud has always been a nonpartisan proposition. For example, Sen. Charles Grassley (R-IA), the architect of the revitalized FCA, now heads the Senate Finance Committee. That gives him a powerful influence over the Department of Justice (DOJ) and the initiatives of the administration, Morris says. On top of that, Attorney General John Ashcroft already has pledged his strong support for the continued enforcement of the FCA.
Morris says the OIG will continue to work with the DOJ to support its FCA authorities as well as terminations, suspensions, and exclusions to address the delivery of poor care to beneficiaries and failure to provide care.
"In particular, we are focusing on long-term care facilities," he reports. But the DOJ and U.S. attorneys offices have been using the False Claims Act to address failure to provide care in psychiatric hospitals as well, he says.
Morris points out that the OIG has civil monetary penalty authority and exclusion authority not only for entities but also for individuals who provide subpar care. Since excluding an entire entity can have a negative effect on beneficiaries, the OIG plans to use its authority to target individuals, administrators, and owners who oversee the delivery of inadequate care, he says.
Another key target is kickbacks, Morris warns. The anti-kickback statute is a criminal statue, but in addition to criminal penalties, it includes an administrative sanction of $50,000 per incident plus treble damages, which allows the OIG to pursue people paying and receiving kickbacks. And the OIG plans to make the most of that authority.
"We will be looking for cases that DOJ and U.S. attorneys offices are not going forward with criminally to develop administrative responses," Morris reports. And to do that, he says, veteran attorneys with experience handling those cases are being added to the OIG’s Office of Counsel.
Morris says another focal point is the expansion of benefits and conversion to the prospective payment system, which he says will require a "rethinking" of how the government identifies and develops fraud cases, because it changes many of the dynamics that underlie billing.
At the same conference, Tim Delaney, a supervisor in the Federal Bureau of Investigation’s (FBI) Washington office, pointed out that health care fraud is one of the few white-collar programs to be classified as a Tier I program because it threatens the national economy.
Delaney says that’s why the FBI employs the aggressive use of asset forfeiture and money. "We don’t feel it is enough to catch somebody and convict them, even if they go to jail," Delaney says. "We want to take away their ill-gotten gains."
The bureau now has a dozen dedicated squads focused solely on health care fraud, which is now the top priority in two-thirds of the offices across the country and No. 2 in the remainder, he reports.
The result: The number of open and assigned cases has escalated from 591 in 1992 to more than 3,000. The success rate also has kept pace, with the number of convictions growing from 116 to 580 over the same period.
Delaney says the easiest targets still are services not rendered, upcoding, and billing for unnecessary services. Kickbacks also are a high priority, he adds, and the FBI is now lobbying to extend its reach to private insurance cases. "Right now. it is not illegal for two private insurers to pay each other kickbacks," he says.
Delaney says hospitals are being scrutinized for cost report fraud, billing for services not rendered, and kickbacks. Billing for less-qualified persons is another major target, he says.
Here are some other key targets, Delaney reports:
- Home health care. Investigators are scrutinizing unnecessary treatment plans, cost report fraud, billing for patients who are not really homebound, and billing unskilled services as skilled services.
- Mental health facilities. Key targets in these facilities include individual therapy billed as group therapy and upcoding the length of visits. "We had one case that we called wave therapy’ because the psychiatrist would walk in and wave and then bill for a counseling session," says Delaney.
- Nursing homes. The FBI is working nursing home cases jointly with Health and Human Services, looking at kickbacks to administrators, cost report fraud, services not rendered, upcoding, and durable medical equipment (DME). One ongoing case involves the inclusion of personal expenses such as automobile for personal use in cost reports.
- Clinic fraud. Key targets in clinics include services not rendered, kickbacks to attorneys, and sending accident victims to certain clinics as well as kickbacks from laboratories and DMEs.
- Transportation fraud. The FBI provided other agencies with training in this area and now is reaping the fruits. Key targets: Inflating trip mileage reports, billing for nonmedical transportation, billing round-trip for one-way transportation, falsely billing patients as stretcher-bound, and billing advanced life support when only basic life support was provided.
Looking ahead, Delaney says the FBI is looking closely at how the Internet will shape health care delivery and the fraud that goes along with it. He notes that by 2003, 67 million people are expected to seek health care information on the Internet, and total Internet health care business is expected to increase from $400 million in 1999 to $22 billion in 2004.
Delaney says the FBI is zeroing in on where sites are located, what entity is actually behind an e-mail address or web site, as well as adequacy of services. "We want to look out for quackery on the Internet, bad medicine, and potential health risks," he concludes.