All levels of health care providers are bracing for what is certain to be an increase in enforcement activity by the HHS Office of Inspector General (OIG) and other federal agencies and boards with fraud prevention, enforcement, and investigative powers. Certainly, all entities which accept the recently-available stimulus monies could subject themselves to government scrutiny. However, the health care industry (which traditionally receives a significant portion of government monies through Medicare, Medicaid, and other programs) is generally more vulnerable to fraud and spending scrutiny than other industry sectors. While the health care industry is no stranger to fraud and abuse compliance and enforcement efforts, it should be particularly vigilant now that the OIG has increased funding, support, and tools to step up its enforcement activities. Time is of the essence for all levels of health care providers and companies to assess their compliance risks and update their compliance programs.
The recently-passed American Recovery and Reinvestment Act of 2009, commonly referred to as the Economic Stimulus Bill (Stimulus Bill), granted significant amounts of money for the OIG to use in oversight activities under the Bill, including $31 million specifically for funding oversight and implementation. This was in addition to other funding previously granted to the OIG over the past several years. For example, the Deficit Reduction Act of 2005 provided the OIG with $25 million from FY 2006 – FY 2010 to undertake fraud and abuse control activities related to the Medicaid program. The Supplemental Appropriations Act of 2008 appropriated the OIG with $25 million for FY 2009 for the purposes of reducing fraud and abuse in the Medicaid program and authorized another $25 million for FY 2010 and each subsequent fiscal year. Clearly, the OIG is well-funded for its oversight and fraud and abuse reduction efforts.
In addition to increased funding, recent legislation gave the OIG enhanced enforcement authority and other tools for combating fraud and abuse. The Inspectors General Reform Act of 2008 (amending the prior Inspector General Act of 1978) was enacted to enhance the independence of the Inspectors General, to create a Council of Inspectors General on Integrity and Efficiency, and for various other purposes. The law specifically (i) increased the pay level for the Inspectors General, (ii) provided separate counsel to support the Inspectors General, (iii) established a council of the Inspectors General on Integrity and Efficiency (which, in part, is to develop policies, standards, and approaches to aid in the establishment of a well-trained and highly-skilled workforce at the offices of the OIG and to identify vulnerability in federal programs with respect to fraud, abuse, and waste), and (iv) amended the Inspectors' subpoena powers to permit the Inspectors General to require by subpoena all information, documents, answers, records, and data of any medium, including electronically stored information as well as tangible things.
The recently-passed Stimulus Bill also authorizes any Inspector General to review issues raised about contracts and grants awarded using Stimulus funds and to examine any records of a contractor or grantee (or any of their subcontractors or subgrantees) that pertain to and involve transactions relating to a contract, subcontract, grant, or subgrant under the Stimulus Bill. It also authorizes the OIG to interview any officer or employee of such contractor, grantee, subgrantee, or agency. Additionally, the Stimulus Bill created the Recovery Accountability and Transparency Board to "coordinate and conduct oversight of covered funds to prevent fraud, waste, and abuse," and this gives the Board subpoena powers and the ability to compel testimony from private persons. These legislative acts signal increased authority to the OIG and others involved in fraud and abuse prevention and correction. This increased authority comes at time when the Obama administration has already signaled it intends to end fraud and abuse in the Medicare program.
Finally, OIG data shows that the government recovers about $17 for every $1 of enforcement budget. Total recoveries in 2009 already exceed all 2008 recoveries. That return on investment almost guarantees that OIG enforcement activity will increase in the near term. In fact, the OIG has updated its website to outline the specific investigative and audit activities the agency will be involved in. These include investigating "…individuals and organizations who knowingly and willfully execute schemes to defraud any HHS program, grant or contract involving [Stimulus Bill] funds" and providing oversight and management of the exclusions program authorized to prohibit individuals and/or entities from participating in programs involving Stimulus Bill funds.
What does this mean for the health care industry? It means it is essential for entities to perform compliance risk assessments and ensure they have implemented well-designed compliance programs. This also means it is time to review and update those compliance plans and programs. All health care entities should review the OIG's 2009 Workplan and understand the areas of interest to the OIG. The Workplan notes that (i) prescription drug plan sponsors are to institute comprehensive compliance plans to detect, prevent, and correct Part D fraud and abuse, (ii) the OIG intends to continue to focus investigation of the quality of care provided in nursing facilities and other care settings, and (iii) the OIG intends to pursue general billing and kickback issues. In the last year, the OIG issued new compliance guidance for nursing facilities, and both AdvaMed and PhRMA have released revisions to their respective Codes on Interactions with Health Care Professionals. Compliance plans based on or incorporating provisions of prior releases of the guidance or Codes should be updated immediately.
What can you do now? By clicking here, providers can access a compliance checklist for assessing its current compliance risks. By assigning a value to each category noted in the checklist, providers can score their current compliance risk level. While the numbers are arbitrary and of relative value only, they serve to help a provider quantitatively assess its relative risk.
If you have any questions regarding this e-Alert, please contact Joanna Napp at 512.236.2292 or jnapp@jw.com.
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