House Democrats' Health Reform Bill Proposes Significant Fraud and Abuse Reform

The Facts
The first draft of the House Democrats’ health care reform legislation published June 19, 2009, portends the government’s continued focus on Medicare program integrity, fraud and abuse reform, and transparency in industry-physician relationships. The bill includes several provisions that propose to enhance existing program penalties for fraud and abuse. Further, the bill explicitly provides that existing authority relating to program integrity and the authority to prevent and prosecute fraud, waste and abuse will apply equally to the public health insurance option. Other provisions of the bill propose to strengthen significantly compliance requirements for Medicare program participation.

Proposals for increasing existing penalties include enhanced penalties for:

• False statements on provider or supplier enrollment applications
• Submission of false Medicare, Medicaid or CHIP claims
• Delay of Inspector General investigations
• Exclusion of individuals from program participation
• Obstruction of program audits

Proposals aimed at enhancing program and provider protections include:

• Requiring providers and suppliers to adopt compliance programs that contain certain “core elements” established by the Secretary
• Requiring physicians to provide documentation on referrals to programs at high risk of waste and abuse, such as durable medical equipment or home health services
• Requiring repayments of known Medicare and Medicaid overpayments within a specified time period and making the failure to repay a false claim
• Increasing access to databases and information necessary to identify fraud, waste and abuse
• Proposing a more robust version of the Physician Payments Sunshine Act (S.301)

What’s at Stake
The provisions in the proposed bill underscore the federal government’s objective to fund some of the cost of health care reform through increased program penalties, reducing fraud, waste and abuse and enhancing payment protections. Physicians, providers and suppliers may see increased enforcement activities bolstered by greater scrutiny of program activities.

Steps to Consider

• Review and assess current compliance programs and procedures to ensure accuracy of claims data
• Consider whether existing policies and procedures for responding to government investigations should be modified or updated in light of the potential for increased government enforcement activity
• Evaluate the additional investment of time and resources to meet the proposed physician payment transparency requirements

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