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DJP Update 9-20-1010 Federal Government’s New Tools for Medicare Fraud

Fraud:  Certainly fraud needs to be eliminated!

The bad folks need to be caught and punished.   But what happens to the doctor incorrectly accused?  Who pays his or her defense costs?  What happens to the doctor’s practice during an accusation under the new expanded contingency fee hunt by contractors in the RAC (Recovery Audit Contractor) audits?  During the “negotiations” in Congress who represented the innocent doctors and what was said?  Have we moved to a “guilty” unless proven innocent?  Are we no longer innocent unless proven guilty?  Remember, the accusations bring the threat of huge penalties and jail time!

No need to wonder why the doctors coming out of medical school today don’t think private practice is viable with billing complexity, broken medical liability system, electronic health records with patient privacy concerns and billing being fed to government computers, the increased overhead and price-fixing by government for services rendered, the massive regulatory burdens, and on and on.  Easier to go and work fixed hours for a large group or a hospital if such a job can be found. Let someone else worry about all of that and just try to practice ethical science-based Medicine as best one can.  Sad that the choices are diminishing each year.

And now a few links and excerpts:

Excerpts:
01/29/10: CMS Expands FY 2010 RAC ADR limits to all Institutional Providers. Click the link below to review the additional documentation limits for fiscal year 2010. The limits announced in December 2009 applied only to requests for DRG validation purposes; the same methodology will now be used for reviews of all institutional claim types. CMS will post the limits for physicians, non-physicians practitioners and DMEPOS suppliers at a later date.

10/10/08: CMS Announces RAC Contingency Fee Percentages. The RACs are paid a contingency fee; that is, the RACs receive payment based on the amount of the improper payments they correct for both overpayments and underpayments. Each RAC’s contingency fee is established during contract negotiations with CMS and, as such, the contingency fee varies for each RAC. Click the link below to view the RAC contingency fees.

https://www.fbo.gov/index?s=opportunity&mode=form&id=5c8c7d4b00249ba579d4d77d64bd0aea&tab=core&_cview=1&cck=1&au=&ck=

Feds gain power over billions in Medicare fraud
By Alison Young, USA TODAY  September 20, 2010
A couple of excerpts:
-Suspending payments to a provider as soon as there’s been a “credible allegation” of fraud that merits further investigation, including tips from consumers.
-•Rating all types of medical providers by their risk for engaging in fraud. Those at highest risk would undergo fingerprinting and criminal background checks.
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And don’t forget the myriad of previous laws & regulations including “Fraud Alerts” of yesteryear.
Watch out for co-pay forgiveness!  See enlarged and bold highlighting below.

http://oig.hhs.gov/fraud/docs/alertsandbulletins/121994.html


EXCERPT:
[Federal Register: December 19, 1994]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Publication of OIG Special Fraud Alerts

AGENCY: Office of Inspector General, HHS.
ACTION: Notice.

Why Is it Illegal for “Charged-Based” Providers, Practitioners and Suppliers to Routinely Waive Medicare Copayment and Deductibles? Routine waiver of deductibles and copayments by charge-based providers, practitioners or suppliers is unlawful because it results in (1) false claims, (2) violations of the anti-kickback statute, and (3) excessive utilization of items and services paid for by Medicare. A “charge-based” provider, practitioner or supplier is one who is paid by Medicare on the basis of the “reasonable charge” for the item or service provided. 42 U.S.C. 1395u(b)(3); 42 CFR 405.501. Medicare typically pays 80 percent of the reasonable charge. 42 U.S.C. 1395l(a)(1). The criteria for determining what charges are reasonable are contained in regulations, and include an examination of (1) the actual charge for the item or service, (2) the customary charge for the item or service, (3) the prevailing charge in the same locality for similar items or services. The Medicare reasonable charge cannot exceed the actual charge for the item or service, and may generally not exceed the customary charge or the highest prevailing charge for the item or service. In some cases, the provider, practitioner or supplier will be paid the lesser of his [or her] actual charge or an amount established by a fee schedule. A provider, practitioner or supplier who routinely waives Medicare copayments or deductibles is misstating its actual charge. For example, if a supplier claims that its charge for a piece of equipment is $100, but routinely waives the copayment, the actual charge is $80. Medicare should be paying 80 percent of $80 (or $64), rather than 80 percent of $100 (or $80). As a result of the supplier’s misrepresentation, the Medicare program is paying $16 more than it should for this item.
(emphasis added) In certain cases, a provider, practitioner or supplier who routinely waives Medicare copayments or deductibles also could be held liable under the Medicare and Medicaid anti-kickback statute. 42 U.S.C. 1320a-7b(b). The statute makes it illegal to offer, pay, solicit or receive anything of value as an inducement to generate business payable by Medicare or Medicaid. When providers, practitioners or suppliers forgive financial obligations for reasons other than genuine financial hardship of the particular patient, they may be unlawfully inducing that patient to purchase items or services from them. At first glance, it may appear that routine waiver of copayments and deductibles helps Medicare beneficiaries. By waiving Medicare copayments and deductibles, the provider of services may claim that the beneficiary incurs no costs. In fact, this is not true. Studies have shown that if patients are required to pay even a small portion of their care, they will be better health care consumers, and select items or services because they are medically needed, rather than simply because they are free. Ultimately, if Medicare pays more for an item or service than it should, or if it pays for unnecessary items or services, there are less Medicare funds available to pay for truly needed services. One important exception to the prohibition against waiving copayments and deductibles is that providers, practitioners or suppliers may forgive the copayment in consideration of a particular patient’s financial hardship. This hardship exception, however, must not be used routinely; it should be used occasionally to address the special financial needs of a particular patient. Except in such special cases, a good faith effort to collect deductibles and copayments must be made. Otherwise, claims submitted to Medicare mat violate the statutes discussed above and other provisions of the law.
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Read more about Fed Gov efforts at:


and read Fed Gov summary of “new tools”

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And read American Bar Association article giving some definitions of the various RAC programs:

The Patient Protection and Affordable Care Act (PPACA)1 calls for significant expansion of the Recovery Audit Contractor (RAC) program by the end of 2010.
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Be good! Be careful! The older doctors remember the days when patients paid the doctor directly. If the patient couldn’t afford the fee, the doctor and the patient worked it out to the patient’s satisfaction. And if the doctor said to forget the fee, no crime was committed.
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A few recent tweets from www.twitter.com/DJPNEWS

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  3. Movie “The Town” a roller-coaster thriller. Casting & acting superb.1:12 PM Sep 19th via Echofon
  4. Dr’s books good! RT @tessgerritsen Some tidbits about the REAL Boston PD detective advising TNT’s ‘Rizzoli & Isles’ http://patch.com/A-6mg12:26 PM Sep 19th via Echofon
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  6. Reread book 1984 & reflect how some try to distort reality RT @RasmussenPoll One nation under revolt…http://tinyurl.com/RR204811:27 AM Sep 17th via Echofon

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Donald J. Palmisano, MD, JD
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