Control of fraud and abuse in Medicare and Medicaid.

This Comment explores issues concerning the control of fraud and abuse in health programs financed with public funds, specifically the Medicare and Medicaid programs. It summarizes the nature, scope, and possible causes of what some regard as a fraud and abuse "crisis," and points out the difficulties and obstacles facing those who attempt to develop legislative and executive action aimed at controlling fraud and abuse. Recent federal initiatives in fraud and abuse control are examined, and a brief summary of key provisions of H.R. 3 (the Medicare-Medicaid Anti-fraud and Abuse Amendments, which may prove to be a landmark piece of legislation in this area) is provided. The author emphasizes that more effective control of fraud and abuse is necessary if further expansion of government financing of health programs, including national health insurance, is to occur in the near future. At the same time, caution must be taken not to neglect the appropriate use of other mechanisms necessary for reducing the costs of medical care and improving its quality. In addition, it is likely that efforts to stem fraud and abuse will raise important medicolegal and public policy issues that will require careful interdisciplinary consideration.     

The brave new world of Medicare and Medicaid fraud and abuse enforcement: whistle-blowers, pre-filing agreements, and voluntary disclosure

Providers participating in the recent wave of mergers, acquisitions, and affiliations may have unwittingly expanded their false claims exposure because many false claim-type situations are difficult, if not impossible, to identify in pre-closing due diligence. In addition, the possibility of retrospective characterization of ordinary billing mistakes as "false claims" increasingly introduces significant uncertainty to the average provider's financial future. To date, the single most effective approach to this problem is an independent compliance review to identify and resolve any existing exposure, including voluntary disclosure if appropriate, and an ongoing compliance program to communicate to all employees not only the content of applicable rules but also the genuine commitment of management to ensure continuing compliance above other concerns.     

Medicare and state health care programs: fraud and abuse; amendments to OIG exclusion and CMP authorities resulting from the Medicare and Medicaid Patient and Program Protection Act--Office of Inspector General (OIG), HHS. Final rule

This document amends a technical error that appeared in the final rule, which amends the OIG exclusion and CMP authorities, published on January 29, 1992 designed to implement section 2 of the Medicare and Medicaid Patient and Program Protection Act, along with other conforming amendments. The final rule is designed to protect program beneficiaries from unfit health care practitioners, and otherwise improve the anti-fraud provisions of the Department's Medicare and State health care programs.     

Public/private information sharing in healthcare fraud investigations

Private insurers have good reason, both in their private interest and in the public interest, for pursuing and rooting out fraud in the healthcare system; moreover, they often have sophisticated data systems, substantial investigative information, and management expertise that can be useful to prosecutors. It makes sense, as a public policy matter, to undertake steps to encourage insurers to be aggressive in pursuing legitimate fraud cases, and to provide a framework for effective cooperation and information sharing with law enforcement. At the same time, prosecutors are responsible for enforcing equal justice under the law; thus, any such relationship must be handled in an appropriate manner, with safeguards to protect privacy and the reputation of investigative subjects. While the courts have not yet explored many of the relevant legal and factual issues in this area, the author surveys existing guidance under governing laws and policies applicable to state and federal prosecutors, and suggests techniques to prevent inappropriate communication or use of such information.     

Medicare and Medicaid programs; advance directives--HCFA. Final rule

This final rule responds to public comments on the March 6, 1992 interim final rule with comment period that amended the Medicare and Medicaid regulations governing provider agreements and contracts to establish requirements for States, hospitals, nursing facilities, skilled nursing facilities, providers of home health care or personal care services, hospice programs and managed care plans concerning advance directives. An advance directive is a written instruction, such as a living will or durable power of attorney for health care, recognized under State law, relating to the provision of health care when an individual's condition makes him or her unable to express his or her wishes. The intent of the advance directives provisions is to enhance an adult individual's control over medical treatment decisions. This rule confirms the interim final rule with several minor changes based on our review and consideration of public comments.     

Medicare and Medicaid programs; revaluation of assets--HCFA. Final rule

This final rule revises the Medicare and Medicaid regulations that are affected by section 2314 of the Deficit Reduction Act of 1984 and sections 9110 and 9509 of the Consolidation Omnibus Budget Reconciliation Act of 1985. Those provisions amended sections 1861(v)(1) and 1902(a)(13) of the Social Security Act. This rule describes new limitations on the valuation of assets acquired as the result of changes in ownership occurring on or after July 18, 1984. These changes affect hospitals and skilled nursing facilities under the Medicare program and hospitals, nursing facilities, and intermediate care facilities for the mentally retarded under the Medicaid program.     

PPS waivers: implications for Medicare, Medicaid, and commercial insurers

This paper compares the Medicare prospective payment system (PPS) to four all-payer rate-setting systems that operated under HCFA waiver authority. The study examines the experience of Medicare, Medicaid, and commercial insurers under the two approaches. Data from several American Hospital Association surveys and from Medicaid 2082 report forms are analyzed. The paper concludes that the all-payer waiver programs have been as successful as PPS in controlling the rate of growth in Medicare costs. In addition, Medicaid programs are more successful in controlling their outlays in all-payer rate-setting environments than when they "go alone." Finally, there is no evidence to suggest that hospitals can increase charges in response to greater financial need under either PPS or the state waivers. Nevertheless, it appears that commercial insurers are better able to compete with Blue Cross plans in all-payer rate-setting states than elsewhere.     

Medicare and Medicaid programs: hospice conditions of participation. Final rule

This final rule revises the existing conditions of participation that hospices must meet to participate in the Medicare and Medicaid programs. The final conditions address the comments that we received on the proposed rule published on May 27, 2005. This final rule focuses on the care delivered to patients and their families by hospices and the outcome of that care. The final requirements continue to reflect the unique interdisciplinary view of patient care and allow hospices flexibility in meeting quality standards. These changes are an integral part of the Administration's efforts to achieve broad based improvements in the quality of health care and our efforts to improve the quality of care furnished through the Medicare and Medicaid programs.     

Medicare and Medicaid; resident assessment in long term care facilities--HCFA. Final rule

This final rule establishes a resident assessment instrument for use by long term care facilities participating in the Medicare and Medicaid programs when conducting a periodic assessment of a resident's functional capacity. The resident assessment instrument (RAI) consists of a minimum data set (MDS) of elements, common definitions, and coding categories needed to perform a comprehensive assessment of a long term care facility resident. A State may choose to use the Federally established resident assessment instrument or an alternate instrument that is designed by the State and approved by us. These regulations establish guidelines for use of the data set and designation of the assessment instrument. The provisions contained in these regulations implement statutory requirements. The resident assessment instrument is intended to produce a comprehensive, accurate, standardized, reproducible assessment of each long term care facility resident's functional capacity.     

Medicare and Medicaid; charges to residents' funds in nursing homes--HCFA. Final rule

This final rule protects the personal funds (including personal needs allowances) of residents in skilled nursing facilities (SNFs) and nursing facilities (NFs) whose care is paid for by Medicare and Medicaid. It sets forth the items and services that are included in program payment and those for which a facility may charge residents. The regulations are required by section 21(b) of the Medicare-Medicaid Anti-Fraud and Abuse Amendments of 1977 and sections 4201 and 4211 of the Omnibus Budget Reconciliation Act of 1987.     

Special report on reimbursement. Final Medicare fraud and abuse safe harbors are published

There has been great concern in the health care industry that business arrangements that do not comply with the Safe Harbors will automatically be deemed illegal. HHS has confirmed that this is not so; the commentary to the Regulations expressly states that "The failure of a particular business arrangement to comply with these provisions does not determine whether or not the arrangement violates the statute because...this regulation does not make conduct illegal. Any conduct that could be construed to be illegal after the promulgation of this rule would have been illegal at any time since the current law was enacted in 1977....This regulation is intended to provide a formula for avoiding risk in the future." 56 Fed. Reg. at 35955. In the final analysis, the majority of transactions will fall outside the Safe Harbors and thus will continue to be judged by the standards established by the Medicare antifraud statute enacted 14 years ago. Under these standards, as HHS states, "the degree of the risk [in any particular transaction] depends on an evaluation of the many factors which are part of the decision-making process regarding case selection for investigation and prosecution." Id. at 35954. Providers that are mindful of these criteria should therefore still be able to accomplish, with relative safety, transactions that do not qualify for Safe Harbor protection.