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Congress prepares to strengthen fraud and abuse sanctions.

Congress prepares to strengthen fraud and abuse sanctions

As the fall elections draw near, members of Congress are close to approving measures to get tough with Medicare/Medicaid fraud and abuse offenders.

Essentially, the proposals expand the bases under which the Government may administratively exclude providers from participation in the programs. The Administration's chief enforcer, Health and Human Services Department Inspector General Richard Kusserow, has openly supported and lobbied for the changes. He says they will strengthen his authority and help preserve the integrity of the system.

As currently drafted, the proposals would exclude from participation:

Persons deemed guilty of referal kickbacks in the Medicare/ Medicaid programs.

Those who have been convicted of 1) fraud or financial abuse; 2) neglect or abuse of patients; or 3) drug trafficking in connection with the delivery of health care services or with a Federal, state, or local program.

Anyone who has been sanctioned by other Federal and/or state health programs.

Those who furnish excessive or unnecessary services under Medicaid.

Other elements of the proposals would establish a minimum suspension period for persons convicted of Medicare or Medicaid crimes, and require the reporting of all final adverse actions made by a state licensing authority.

The proposals are enumerated in three bills: H.R. 1868, S. 1323, and S. 837. They are similar, and officials predict that their technical differences can easily be ironed out.

At this writing, all three versions were awaiting consideration in the Senate Finance Committee, which has jurisdiction in bringing them before the entire Congress. That panel already has a full plate, and the bills must compete for attention with tax reform and the convoluted Gramm-Rudman budget cutting revision.

Still, Administration sources are hopeful Congress will approve the measures before the year-end recess. Prospects for action appear good, since any crackdown on "fraud and abuse' is generally a popular initiative with constituents. As one Capitol Hill insider observed, "No one is against going after wrongdoers, particularly in an election year.'

H.R. 1868, known as the Medicare and Medicaid Patient and Program Protection Act, was the first measure introduced, and has thus served as a baseline for ongoing discussions. Many in the Administration believe its provisions would grant them a clearer charter for punishing Part B providers.

The heart of the bill is contained in the sections concerning exclusion from program participation. The HHS Inspector General considers them vital in providing the legal base for administrative action.

H.R. 1868 mandates exclusion for conviction of program-related criminal offenses, and patient neglect or abuse. It also gives the HHS Secretary discretion to boot providers on a list of other grounds.

For laboratorians, perhaps the most significant grounds for potential exclusion are violations pertaining to kickbacks. Existing statute makes it illegal to solicit or receive remuneration that influences the referral pattern of beneficiaries. The pending bill goes no further in defining illegal remuneration, but it adds the threat of exclusion to civil penalties currently at the Government's disposal (a fine of up to $25,000 and not more than five years' imprisonment).

Labs may also need to keep a close eye on the appropriateness of the claims being submitted. If H.R. 1868 is passed, HHS could punish "any individual or entity that has furnished items or services to patients substantially in excess of the needs of such patients or of a quality that fails to meet professionally recognized standards of health care.'

Also in that section of the bill, action is permitted against anyone who "has submitted or caused to be submitted bills or requests for payment under (Medicare) or a state health care program containing charges for items or services furnished substantially in excess of such individual's or entity's customary charges for such items or services, unless the Secretary finds there is good cause for such bills or requests containing charges or costs.'

The term "substantially in excess' of customary charges has been a long-standing curiosity for providers. Its definition has become a moot point for laboratories, because of carrier-wide fee schedules. However, it could come back to haunt the industry if and when fee schedules are supplanted. Further, it could have implications in the debate over lab discounts to physicians on non-Medicare business.

Other proposed discretionary authority is intended to provide sanctions against certain "wandering offenders.' HHS analysts have noted growing problems, for example, with physicians who are punished in one state but proceed to get a new license and continue to bill Medicare in another.

With the proposed authority, HHS could exclude "any individual or identity whose license to provide health care has been suspended or revoked by any state licensing authority, or who otherwise lost such a license, for reasons bearing on professional competence, conduct, or financial integrity' according to the House language. Exclusion could also apply to anyone who surrendered a license pending a formal review by state authorities.

As currently drafted, the bill also gives HHS greater leverage in simply investigating perceived abuses. Exclusion would be possible for providers who "fail to supply requested information on subcontractors and suppliers.' That includes details on the ownership of a subcontractor, and full information on "significant business transactions' with any wholly-owned supplier or subcontractor.

The exclusion option further would exist for a provider that "fails to grant immediate access' to records, documents, or other data necessary for the IG to perform reviews. In such cases, the minimum exclusion period would be the period in which access to the information was denied, and an additional period not to exceed 90 days.

For instances involving a conviction for Medicare/Medicaid crimes, the minimum suspension period may not be less than five years. In most other cases, the HHS Secretary would have the authority to specify the length of suspension.

Anyone who is excluded from participation is "entitled to reasonable notice and opportunity for a hearing thereon by the Secretary . . . and to judicial review of the Secretary's final decision after such a hearing is provided,' according to the bill. Further, at the end of the minimum period of exclusion, that individual or entity can apply for reinstatement. The request could be filed earlier at the Secretary's discretion.

Given the Administration's strong support and the election-year climate in Washington, it appears the new powers are likely to be enacted in a bipartisan wave.

For those keeping score, bill sponsors on the House side are Reps. Henry Waxman (D-Calif.), Fortney Stark (D-Calif.), Willis Gradison (R-Ohio), Charles Rangel (D-N.Y.), Claude Pepper (D-Fla.), Richard Gephardt (D-Mo.), Ron Wyden (D-Ore.), Edward Madigan (R-Ill.), Raymond McGrath (R-N.Y.), Hal Daub (R-Neb.), Thomas Downey (D-N.Y.), Marcy Kaptur (D-Ohio), Martin Sabo (D-Minn.), John Conyers (D-Mich.), Michael Bilirakis (R-Fla.), Robert Mrazek (D-N.Y.), and George Miller (D-Calif.).

In the other chamber, staunch backers include Sens. John Heinz (R-Pa.), John Glenn (D-Ohio), Lawton Chiles (D-Fla.), Larry Pressler (R-S.D.), John Melcher (D-Mont.), Pete Wilson (D-Calif.), Quentin Burdick (D-N.D.), and Don Nickles (R-Okla.).

Prompt pay bill also may pass Congress

Not every election-year Medicare reform is designed to increase scrutiny over providers. Lawmakers in both houses of Congress are advancing a time limit on program payments under both Part A and B.

Their interest comes despite a recent directive from HCFA Administrator William Roper ordering fiscal intermediaries and carriers to process claims within 27 days. The legislators want to put some teeth in that order by allowing interest to accrue on late payments.

The House version would require that Part B participating labs be paid within 11 days--roughly half the wait currently experienced by most non-participating providers. But there's still no agreement on when that would actually take effect.

Action on the measure has become part of the lumbering budget reconciliation process. Still, proponents believe early passage by both House Ways and Means and the Senate Finance Committee is a good sign for possible enactment before the end of the year.
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Copyright 1986 Gale, Cengage Learning. All rights reserved.

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Publication:Medical Laboratory Observer
Date:Sep 1, 1986
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