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May 28, 2014 Healthcare Fraud

Department of Health and Human Services Proposes Enhancements to Its Enforcement Powers

As we discussed recently, the federal government has implemented several important measures to combat the rampant healthcare fraud plaguing American taxpayers. One such program, known as the H.E.A.T. Task Force, is administered jointly by the U.S. Attorney General’s Office and the Department of Health and Human Services (HHS). As an administrative agency, HHS derives its powers to investigate and punish healthcare fraud through various statutes as enacted by Congress. For instance, HHS obtained its power to impose civil monetary penalties (CMP) for healthcare misconduct from the Patient Protection and Affordable Care Act of 2010.

HHS is also permitted, under the Social Security Act, to exclude repeat offenders from participation in Medicare and Medicaid programs – thereby preventing the offender from treating patients enrolled in those programs. This punishment can quickly cause an otherwise lucrative medical facility to lose vast numbers of patients and possibly end up out of business.

Proposed Changes to HHS Enforcement Capability

Earlier this month, officials at HHS proposed two changes to its powers under the ACA and SSA, for purposes of enhancing its punishment abilities. The first effectively allows for HHS to assess its own penalties in False Claims Act cases above and beyond those penalties imposed by the FCA itself. The proposed changes allow HHS to inflict CMP’s against any provider who commits the following acts:

  • Makes a false statement as part of an otherwise fraudulent claim;
  • Makes a false statement on an enrollment application with a federal healthcare program;
  • Fails to report and return overpayments within 60 days;
  • Fails to provide HHS with access to documents, or;
  • Orders or prescribes services, medications, or any other charges that are excluded from federal healthcare programs.

Several of these changes mimic the provisions of the FCA. Therefore, if the proposed rule changes are accepted, medical providers caught engaging in fraud against the government could face monetary penalties by HHS, as well as civil damages allowable under the FCA’s provisions – which allow the government to seek triple damages.

Proposed Changes to Exclusionary Authority

The exclusionary authority provided to HHS through the SSA is designed to protect patients from “untrustworthy healthcare providers.” Mandatory exclusions last for at least a five-year period, while permissive exclusions can be for a much shorter amount of time, depending upon the severity of the misconduct.

The proposed rule changes would allow the HHS to exercise its authority granted by the ACA to exclude individuals or organizations for any of the following violations:

  • Conviction of any offense involving interference with an audit. This proposed rule is pivotal in that this conviction has historically been used as part of plea bargains, as it could not trigger an exclusion;
  • Making false or fraudulent statements or omissions in an application to participate in a federal healthcare program;
  • Failing to provide payment information for services which could be reimbursed under Medicare or a state healthcare program;

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