Fraud and Abuse

Finally! CMS Publishes the 60-Day Rule for Reporting and Repaying Medicare Overpayments

Posted by Ryan Blaney on February 12, 2016
ACA, Affordable Care Act, False Claims Act, Final Rule, Fraud and Abuse / No Comments

After four years and 200 comments, CMS finalized the much‑awaited “60‑Day Rule” for reporting and repaying Medicare Part A and B overpayments (CMS issued a Final Rule related to Medicare part C and D overpayments in the May 23, 2014 Federal Register, 79 FR 29844, and will address Medicaid overpayments in future rulemaking). The 60-Day Rule is part of CMS’s efforts to reduce fraud, waste, and abuse in the Medicare program.

Section 6402(d) of the Affordable Care Act (ACA), created section 1128J(d) of the Social Security Act (codified at 42 U.S.C. 1320a-7k(d)), requiring a person or entity who has received an overpayment to report and return the overpayment to the appropriate entity by the later of: (1) 60 days after the date on which the overpayment was “identified”; or (2) the date any corresponding cost report is due (if applicable). Importantly, the ACA also made reporting and repaying overpayments within 60 days an “obligation” under the False Claims Act (FCA), and therefore subject to FCA liability. Proof of specific intent to defraud the government is not required for a person or entity to be liable under the 60-Day Rule.

The Final Rule slightly relaxes some of the onerous requirements in the 2012 Proposed Rule:

Six Year Lookback Period: CMS responded to numerous comments and concerns that the proposed 10-year look back period for identifying overpayments was too long. The 60-Day Rule changed the lookback period to 6 years, consistent with the statutory limitations for the FCA.

Definition of Identify: CMS acknowledged the numerous comments submitted on what it means to “identify” an overpayment and said, “We agree and have revised the language … to clarify that part of identification is quantifying the amount, which requires a reasonably diligent investigation.” According to CMS, “[t]he Final Rule clarifies that a person has identified an overpayment when the person has or should have, through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment.” CMS warned Medicare providers and suppliers not to use the “ostrich defense”; reasonable diligence includes both proactive compliance activities conducted in good faith by qualified individuals, and good faith investigation of credible information conducted in a timely manner by qualified individuals. Quantification of the amount of the overpayment may be determined using statistical sampling and extrapolation methodologies.

How to Report and Return Overpayments: The Final Rule states that providers and suppliers must use an applicable claims adjustment, credit balance, self-reported refund, or another appropriate process to satisfy the obligation to report and return overpayments.

The Final 60-Day Rule is available at: https://federalregister.gov/a/2016-02789. By way of comparison, the February 16, 2012 Proposed Rule is available at:  https://www.gpo.gov/fdsys/pkg/FR-2012-02-16/pdf/2012-3642.pdf

To learn more about reporting or making repayments under the Final Rule, please contact Ryan Blaney, Dana Petrillo or any member of Cozen O’Connor’s Health Law team.

Ryan Blaney

Ryan Blaney

Ryan Blaney joined Cozen O'Connor as a member of the firm's Health Law group. Ryan practices in the firm's Washington, D.C., office. He focuses his practice on representing clients in the health care and life sciences industries in a wide range of matters, including health care fraud and abuse, civil and criminal government investigations, qui tam and whistle-blower disputes under the False Claims Act and other federal and state laws and regulations, HIPAA privacy and data security, compliance and transactional services, and antitrust matters.

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Largest Criminal Health Care Fraud Takedown – 243 Charged and $712 Million in False Billings

Posted by Ryan Blaney on June 18, 2015
DOJ, FBI, Fraud and Abuse, HHS, Hospital, Medicare / No Comments

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On June 18, 2015, HHS Secretary Sylvia M. Burwell and DOJ Attorney General Loretta E. Lynch announced nationwide arrests in Medicare fraud schemes amounting to approximately $712 million in false billings.  Attorney General Lynch described the strike as “the largest criminal health care fraud takedown in the history of the Department of Justice, and it adds to an already remarkable record of enforcement.”

According to the Department of Justice Press Release the takedown was led by the Medicare Fraud Strike Force and resulted in 243 individuals, including 46 doctors, nurses and licensed medical professionals, being charged with Medicare fraud.  This Strike Force targeted false billings for the following services:

  • Home Health
  • Psychotherapy
  • Physical and Occupational Therapy
  • DME
  • Pharmacy Fraud

The nationwide sweep included Florida, Texas, California, Louisiana, New York and Michigan.  Miami was a particular focus with 73 defendants charged and $263 million of false billings for home health, mental health and pharmacy services.

This nationwide sweep involved significant coordination between multiple government enforcement agencies and illustrates the government’s joint efforts to target health care fraud.  Included in the press conference were FBI Director James B. Comey, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Inspector General Daniel R. Levinson of the HHS Office of Inspector General (HHS-OIG) and Deputy Administrator and Director of CMS Center for Program Integrity Dr. Shantanu Agrawal.

Assistant Attorney General Caldwell spoke and emphasized the Criminal Division’s increased focus on Medicare fraud stating,  “Every day, the Criminal Division is more strategic in our approach to prosecuting Medicare Fraud.  We obtain and analyze billing data in real-time.  We target hot spots – areas of the country and the types of health care services where the billing data shows the potential for a high volume of fraud – and we are speeding up our investigations.  By doing this, we are increasingly able to stop schemes at the developmental stage, and to prevent them from spreading to other parts of the country.”

For further information contact Ryan P. Blaney or any member of Cozen O’Connor’s health care team.

Ryan Blaney

Ryan Blaney

Ryan Blaney joined Cozen O'Connor as a member of the firm's Health Law group. Ryan practices in the firm's Washington, D.C., office. He focuses his practice on representing clients in the health care and life sciences industries in a wide range of matters, including health care fraud and abuse, civil and criminal government investigations, qui tam and whistle-blower disputes under the False Claims Act and other federal and state laws and regulations, HIPAA privacy and data security, compliance and transactional services, and antitrust matters.

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Is $210 Million Enough? How About $54.2 Million?

Posted by Ryan Blaney on June 25, 2014
Affordable Care Act, Fraud and Abuse, HHS, Medicaid, Medicare, OIG, Uncategorized / No Comments

Year #2 Report on Medicare Fraud Prevention System

On June 25, 2014, the Centers for Medicare & Medicaid Services (CMS) and the Department of Health and Human Services Office of Inspector General (OIG) issued and certified, as required by the Small Business Jobs Act of 2010 (SBJA) their second implementation year report  for the Fraud Prevention System (FPS) along with a press release.  By way of background, CMS is under pressure from Congress and the United States Government Accountability Office (GAO) to enhance their health care fraud, abuse and waste prevention and detection success through the use of predictive analytics technologies while at the same time monitoring the expenditures and costs by government contractors and auditors such as ZPICs to prevent fraud.  Last October, GAO published a Report concerning CMS’s Medicare Program Integrity titled, “Contractors Reported Generating Savings but CMS Could Improve Its Oversight.” 

CMS and OIG’s Report to Congress on the FPS responds to many, but not all, of GAO’s criticisms.  Here are a few of the noteworthy findings and observations in the Report:

  • CMS reports that they “identified or prevented” $210.7 million in Medicare payments attributed to FPS.  This is a return on investment of $5 to $1 for the second implementation year and an increase ROI from Year 1.
  • OIG disagrees with CMS’s use of “identified savings” to calculate the success of the FPS and instead recommends using “adjusted savings” as a measure of savings and return on investment related to the Department’s use of FPS.
  • Under OIG’s adjusted savings analysis, OIG only certified $54.2 million of the $210.7 million as attributed to the Department’s use of FPS. 
  • OIG found that the “Department’s use of its predictive analytics technologies resulted in a return on investment of $1.34 (not $5) for every dollar spent on the FPS.
  • Based on criticism received by OIG and GAO, CMS reported that they changed the methodology to require ZPICs (Zone Program Integrity Contractors) to submit provider-specific outcome data to be able to conduct more quality control reviews prior to reporting savings.
  • OIG disagreed with CMS and stated, “[A]lthough the Department has made significant progress in addressing the challenges of measuring actual and projected savings, its procedures were not always sufficient to ensure that its contractors provided and maintained reliable data to always support FPS savings.”  Interestingly, OIG initially included a much stronger statement but revised the final statement based on CMS’s objections.  The original statement was “[T]he Department could not ensure that its contractors always provided and maintained reliable data to support FPS savings.”   
  • CMS expects that future activities of the FPS will substantially increase savings by expanding the use of predictive analytics and modeling beyond identifying FRAUD and into areas of WASTE and ABUSE.   This will require more refined predictive models and modifications from insights from field investigators, policy experts, clinicians, and data analysts.  In Year 3, CMS will convene workgroups with federal agency, states, and private partners to develop and expand FPS’s capabilities.
  • In Year 3, CMS also will explore the cost-effectiveness and feasibility of expanding predictive analytics technology to Medicaid and the Children’s Health Insurance Program (CHIP).  CMS anticipates working with State Medicaid Agencies to train and explore opportunities for expanding predictive analytics. 

Practice Tip: CMS’s FPS is more fully integrated into the Medicare FPS payment system and allows CMS to monitor and deny individual claims in the prepayment stage.  ZPICs and other government contractors will continue to be the government’s “boots on the ground” but they will be armed with better information and real time data to investigate.  Providers need to take any and all inquiries by ZPICs seriously.  Anticipate more coordinated investigations by the FBI, ZPICs, States AGs, State Medicaid Fraud Agencies, and Federal agencies and faster freezing or rejections of provider claims.  Anticipate the expansion of FPS’s predictive analytics to the areas of waste and abuse. 

 

Please check back with the Health Law Informer Blog and Cozen O’Connor for additional analysis of CMS’s Second Implementation Year Report in the coming weeks. 

Ryan Blaney

Ryan Blaney

Ryan Blaney joined Cozen O'Connor as a member of the firm's Health Law group. Ryan practices in the firm's Washington, D.C., office. He focuses his practice on representing clients in the health care and life sciences industries in a wide range of matters, including health care fraud and abuse, civil and criminal government investigations, qui tam and whistle-blower disputes under the False Claims Act and other federal and state laws and regulations, HIPAA privacy and data security, compliance and transactional services, and antitrust matters.

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Screen Early, Screen Often: OIG Updates its Advice on How to Avoid Liability for Employing or Contracting with Individuals Excluded from Participation in Federal Health Care Programs

Posted by William P. Conaboy Jr. on June 03, 2013
Fraud and Abuse, Medicaid, Medicare / No Comments

On May 8, 2013, the Office of Inspector General (“OIG”) of the Department of Health & Human Services issued an updated Special Advisory Bulletin (the “Updated Bulletin”)[1]  on the effect of exclusion from participation in Medicare, Medicaid and other Federal health care programs (collectively “FHPs).  The Updated Bulletin, which replaces and supersedes guidance originally provided by OIG in a 1999 Special Advisory Bulletin (the “1999 Bulletin”), details OIG’s broad interpretation of the scope and effect of its exclusion authority under the Civil Monetary Penalties Law (“CMPL”).[2]  The Updated Bulletin addresses many of the questions OIG has received about exclusions and purports to convey insight gained from resolving self-disclosure cases since publishing the 1999 Bulletin. Continue reading…

William P. Conaboy Jr.

William P. Conaboy Jr.

Bill Conaboy is an associate in the firm’s Healthcare Law Group. Prior to working with the firm Bill earned a Doctor of Pharmacy degree (Pharm D), and is currently a licensed pharmacist and attorney in both Pennsylvania and New Jersey. Bill focuses on regulatory and litigation matters related to many areas of healthcare law.

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Taking Aim in 2013: The Government Points Two Barrels at Preventing and Punishing Healthcare Fraud and Abuse

Posted by William P. Conaboy Jr. on November 16, 2012
Affordable Care Act, Fraud and Abuse, HIPAA, HITECH, Medicaid, Medicare / No Comments

A few weeks ago we posted on this Blog an article highlighting the “gathering storm” surrounding HIPAA enforcement and predicted an ominous future for hospitals and other providers who fail to develop and maintain adequate HIPAA compliance policies.  While there is no doubt the future is bleak for those unwilling to abide by HIPAA’s mandate, the forecast for providers who commit healthcare fraud is equally devastating.  This is because, in 2013, the federal government will attack healthcare fraud from two angles. First, the Office of Inspector General (“OIG”), per the terms of its 2013 Work Plan (“Work Plan”), will review many of the government’s anti-fraud efforts to maximize recovery of Medicare and Medicaid overpayments.  Second, many of the new anti-fraud provisions in the Affordable Care Act (“ACA”) will kick into high gear now that the result of the presidential election has guaranteed the law’s survival. Continue reading…

William P. Conaboy Jr.

William P. Conaboy Jr.

Bill Conaboy is an associate in the firm’s Healthcare Law Group. Prior to working with the firm Bill earned a Doctor of Pharmacy degree (Pharm D), and is currently a licensed pharmacist and attorney in both Pennsylvania and New Jersey. Bill focuses on regulatory and litigation matters related to many areas of healthcare law.

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Shedding Some Light on the ACA’s Sunshine Provisions

Posted by Robert A. Chu on October 01, 2012
Affordable Care Act, Fraud and Abuse / No Comments

On September 12, 2012, the Senate Special Committee on Aging held a roundtable hearing on the Sunshine Provisions in Section 6002 of the Patient Protection and Affordable Care Act (the “Sunshine Provisions”).  Under the Sunshine Provisions, certain drug and device manufacturers must annually report to the government many payments and other transfers of value they make to physicians and teaching hospitals.  Certain drug and device manufacturers and group purchasing organizations (“GPOs”) must also report ownership and investment interests in them held by physicians and their immediate family members.  In this post, we will report on the roundtable hearing, provide an overview of a Proposed Rule regarding the Sunshine Provisions, and discuss their implementation. Continue reading…

Robert A. Chu

Robert A. Chu

Rob Chu is an associate in the firm’s Health Law Group, focusing on the litigation of health law matters. Upon graduation from Villanova School of Law, Rob was awarded the ABA-BNA Award for excellence in the study of health law. Rob earned an MBA from Villanova University and Master of Public Health from Yale University.

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Health Care Providers’ Use of Groupon Stirs Up Controversy

Posted by Judy Mayer on August 01, 2012
Fraud and Abuse / No Comments

Every day Groupon, Living Social, Buy With Me, and a host of other social coupon websites flood  the inboxes of millions of consumers with daily deals.  These websites offer discounts on a variety of products and services, and are extremely popular among restaurants and businesses for their ability to bring in new customers and generate revenue. 

 But what if the deal is for a dental exam, laser vein removal, or Botox® treatments?  The general public probably doesn’t care about the ramifications of using social coupons for health care services, because, let’s face it, everyone likes a great deal.  Health care providers, however, definitely should. 

 Why?  Because, depending on the nature of the daily deal, a health care provider who offers a discount through these types of social coupon websites could be violating federal and/or state laws. Continue reading…

Judy Mayer

Judy Mayer

Judy Mayer is an associate in the firm’s Health Law Group. Judy handles a variety of transactional, regulatory and litigation matters, including advising health care providers. She also holds an MBA from Villanova University.

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