Legislators Ramp Up Efforts to Stop Health Care Fraud
Increasing access to health care may be a hot health care reform issue, but some legislators are focused on a different angle – making sure that health care funds are not squandered on fraud and abuse. Earlier this month Senator Ted Kaufman (D-Del) introduced the Health Care Fraud Enforcement Act of 2009 (S. 1959), which proposes to strengthen the federal sentencing guidelines and statutes governing health care fraud, forfeiture, money laundering and obstruction. Additionally, on Monday Senator Charles Grassley (R-Iowa) introduced the Fighting Medicare Payment Fraud Act of 2009 (S. 2774), which would give the Secretary of Health and Human Services authority to extend the time period in which Medicare payments must be made if the Secretary determines there is a likelihood of fraud, waste of abuse.
Kaufman Bill
The Kaufman bill, which was created to “building on the fraud-prevention efforts included in the [Senate Committees’] comprehensive health care reform bills” would make a few key reforms, including changing sentencing guidelines for criminals convicted of health care fraud, make punishments “commensurate with costs” of fraud, and increase whistleblower payments.
After the jump -- details on the Kaufman and Grassley Bills
The bill includes the following provisions:
- Clarifies that “willful conduct” does not require proof that a defendant had actual knowledge of the law in question or specific intent to violate the law under the federal Anti-Kickback Statute and Health Care Fraud Statute.
- Amends federal sentencing guidelines to add a two-level increase for any defendant convicted of a federal health care offense relating to a federally-funded health care program that involves a loss of $1 million or more; three-level increase if the loss is $7 million or more; and a four-level increase if the loss is $20 million or more.
- Makes all claims resulting from illegal kickbacks subject to the federal False Claims Act even when the claims are not submitted directly by the defendants.
- Allocates $20 million per year from 2011 through 2016 for investigations, prosecutions and civil/other proceedings related to health care fraud and abuse in connection with a government health care program.
Grassley Bill
The key objective of the Grassley legislation is to give the federal government more time to pay Medicare providers when waste, fraud and abuse is suspected. Currently, federal law known as the “prompt payment rule” requires Medicare to pay provider claims within a very short time frame, even when there is risk of fraud, waste or abuse.
“Because of this prompt payment rule, the government puts itself in a position of having to pay and chase Medicare fraud, instead of working to prevent it in the first place,” Grassley said in a press release on his website. “That doesn’t make any sense and it’s no way to manage Medicare’s resources.”
The HHS Secretary would be required to use the additional time to pay claims to conduct more detailed reviews of the claims in question to make sure the claims should be paid. The bill also requires experts in the HHS Office of Inspector General to recommend, on at least an annual basis, categories of providers/suppliers where additional analysis is needed before Medicare payments are made under the prompt payment rule.
Problems associated with the current “pay first, ask questions later” policy were identified by HHS OIG chief counsel Lewis Morris in an article published earlier this year in “Health Affairs”. Specifically, Morris noted that “[t]he majority of claims are submitted electronically, processed based on predictable edits applied to representations on the claim, and paid claim by claim with limited verification that the services were actually provided or were necessary.”
