CMS’ Proposal to Increase Rewards for Fraud/Abuse Tips

posted in: Blog | 0


If you don’t have a compliance plan in place for Medicare Fraud and Abuse compliance, you sure need one now.  On Monday, April 29, 2013, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule in the Federal Register that would increase rewards paid to those whose tips about suspected fraud lead to the successful recovery of funds, in other words, “whistleblowers.”[1]  Whistleblowers have always been a concern to healthcare providers and are usually people who work for a practice or hospital, who tell the government about their employer’s fraud or improper billing.

According to Department of Health and Human Services (HHS) Secretary Kathleen Sebelius, “President Obama has made the elimination of fraud, waste and abuse, particularly in health care, a top priority for the administration.”  In fact, between 2007 and 2012, the IRS collected almost $1.6 billion and paid approximately $193 million in rewards.[2]  Therefore, HHS plans to further incentivize the reporting of sanctionable conduct by expanding the potential whistleblower reward under the new rule.

Under the current reward incentive program, whistleblowers may receive 10% of the overpayments recovered, but only up to $1,000.  Under the new proposed rule, a whistleblower that provides specific information leading to the recovery of funds may be eligible to receive a reward of 15% of the amount recovered, up to $9.9 million.  This enormous jump in reward potential provides a significant monetary incentive for disgruntled employees to report suspicious practices.

In addition to the increase in potential whistleblower rewards, HHS plans to expand Senior Medicare Patrol (SMP) programs to teach beneficiaries how to recognize and report fraud, waste, and abuse.  Since 1997, more than 7,000 referrals from this program have been made to CMS and the Office of Inspector General (OIG) for investigation.  With the assistance of a new funding source, $7.3 million will be distributed among the 54 SMP projects currently in place.  This will allow the SMP programs to reach even more beneficiaries and educate them on how to identify and report fraud.

Lastly, the proposed rule would strengthen certain provider enrollment provisions, allowing HHS to deny enrollment of providers who were associated with an entity that has unpaid Medicare debt.  Furthermore, the proposed rule would permit HHS to deny enrollment or revoke Medicare billing privileges if the provider, supplier, owner, or even the managing employee was convicted of any felony within the past 10 years.[3]

So what steps can you take to ensure that your practice is compliant while at the same time reducing exposure in light of the new reward incentives for whistleblowers?  The best starting point would be to review your current compliance plan.  Does your practice currently have a compliance plan in place? How does your practice implement and update the plan?  A compliance plan is a document that describes a company’s activities and initiatives to promote legally compliance business operations.  In the healthcare field, it should describe in simple language the laws governing the medical practice, should be reviewed and signed by all employees, and should set out a process for internal monitoring and auditing.

Being able to discuss your practice’s familiarity with the compliance plan can demonstrate to investigators that you have taken steps to discourage and prevent unlawful activity.  A sound compliance plan, coupled with a program that demonstrates how plan initiatives are carried out throughout the practice can go a long way during an investigation.  At the Bittinger Law Firm, we will gladly review your compliance plan and program to ensure that they adequately reflect the measures your practice has taken to adhere to the regulatory standards. Please feel free to contact us with your questions and concerns.

[1] 78 FR 82 at 25013

[2] 78 FR 82 at 25016

[3] 78 FR 82 at 25021