The Affordable Care Act's New Tools to Fight Fraud and Strengthen Medicare
|For the latest information on preventing Medicare fraud, see: New Tools to Fight Fraud, Strengthen Medicare and Protect Taxpayer Dollars.|
The Affordable Care Act improves and expands consumer protections, strengthens Medicare, Medicaid and the Children’s Health Insurance Program (CHIP), and reduces health care costs. One important way it achieves these goals is by improving government-wide efforts to fight fraud, waste and abuse. The new law contains some critical new tools to improve and enhance the Administration’s efforts to prevent and detect fraud, and crack down on individuals who attempt to defraud Medicare, Medicaid, and CHIP as well as private insurance.
New Rules Focus on Preventing Fraud Before It Happens
On January 24, 2011, HHS announced new rules authorized under the Affordable Care Act that will help keep bad actors from defrauding the Medicare, Medicaid and CHIP programs while protecting both patients and legitimate doctors and other providers. These new rules will help HHS do less “paying-and-chasing” fraudulent health care claims and do more proactive fraud prevention by stopping criminals from getting into the system in the first place through new provider screening. The new rules also give HHS new enforcement tool to fight fraud, such as suspending payments in cases of suspected fraud. The new rules will:
- Create a rigorous screening process for providers and suppliers enrolling Medicare, Medicaid and CHIP to keep fraudulent providers out of those programs. Types of providers and suppliers that have been identified in the past as posing a higher risk of fraud, for example durable medical equipment suppliers, will be subject to a more thorough screening process.
- Require a new enrollment process for Medicaid and CHIP providers. States will have to screen providers who order and refer to Medicaid beneficiaries to determine if they have a history of defrauding government. Providers that have been kicked out of Medicare or another State’s Medicaid or CHIP will be barred from all Medicaid and CHIP programs.
- Temporarily stop enrollment of new providers and suppliers. Medicare and State agencies will be on the look out for trends that may indicate health care fraud – including using advanced predictive modeling software, such as that used to detect credit card fraud. The program can temporarily stop enrollment of a category of providers or of providers within a geographic area that has been identified as high risk, as long as that will not impact access to care for patients.
- Temporarily stop payments to providers and suppliers in cases of suspected fraud. Under the new rules, if there has been a credible fraud allegation, payments can be suspended while an action or investigation is underway.
Earlier this year, the Administration announced other rules implementing Affordable Care Act provisions to help fight fraud, including:
- Requiring all fee-for-service Medicare and Medicaid applications and claims to include the National Provider Identifier.
- Requiring physicians and eligible professionals who order or refer certain supplies, items, or services to be Medicare enrolled.
- Requiring physicians and suppliers to maintain and provide access to documentation of written orders for DME, home health or other items and services.
- Requiring providers and suppliers file fee-for-service claims within 12 months of providing the item or service.
Summary: Fraud Prevention Provisions of the Affordable Care Act
Numerous provisions of the Affordable Care Act will help the Obama Administration continue to proactively work to prevent and fight fraud, waste and abuse in health care programs.
Enhanced Screening and Other Enrollment Requirements: The Affordable Care Act requires providers and suppliers who wish to enroll in the Medicare or Medicaid programs or CHIP to undergo a rigorous screening process appropriate to the risk of fraud, waste or abuse such providers and suppliers present to the programs. The new law also allows the Secretary to prohibit new providers from enrolling in the programs to prevent or combat fraud, waste or abuse.
Stopping Payment of Suspect Claims: The new law allows Medicare payments to be withheld from program providers or suppliers if there is a pending investigation or action regarding a credible allegation of fraud. The law also requires States to withhold payments to Medicaid providers where there is pending an investigation of a credible allegation of fraud.
New Resources to Fight Fraud: The Affordable Care Act provides an additional $350 million to ramp up anti-fraud efforts, including placing more “feet on the street” by allowing for the hiring of more law enforcement agents and others to fight fraud in the health care system.
Sharing Data to Fight Fraud: Building on the Obama Administration initiatives to improve coordination across agencies working to stop fraud, the law requires certain claims data from Medicare, Medicaid and CHIP, the Veterans Administration, the Department of Defense, the Social Security Disability Insurance program, and the Indian Health Service to be centralized, thereby making it easier for agency and law enforcement officials to identify criminals and prevent fraud on a system-wide basis. The Obama Administration has already improved access to data for law enforcement, and the Department of Justice (DOJ) and the OIG continue to benefit from improved access to data to help identify criminals and fight fraud.
New Tools to Prevent Fraud: The Affordable Care Act strengthens the government’s authority to require certain high-risk providers and suppliers to undergo a higher level of scrutiny before enrolling in the program based on the risk of fraud, waste or abuse they pose to the program. DMEPOS suppliers and home health agencies providers could be required to post surety bonds as a condition of enrollment to ensure they are legitimate suppliers or providers and financially solvent. In addition, the Affordable Care Act authorizes CMS to require providers and suppliers who order and refer certain items or services for Medicare beneficiaries to enroll in Medicare and maintain documentation on those orders and referrals. In addition, providers and suppliers must establish compliance plans ensuring that they are aware of anti-fraud requirements and good governance practices and have incorporated these into their operations. Other preventive measures focus on certain categories of providers and suppliers that historically have presented concerns including Durable Medical Equipment (DME) suppliers, home health agencies, and Community Mental Health Centers (CMHCs). For example, CMHCs will now be required to serve at least 40 percent non-Medicare beneficiaries in order to ensure that only legitimate CMHCs bill Medicare.
Expanded Overpayment Recovery Efforts: The law expands the Recovery Audit Contractors (RACs) program to Medicaid, Medicare Advantage (Part C) and Medicare drug benefit (Part D) programs. Under these expansions, RACs will help identify and recover over and underpayments to providers across Medicare and Medicaid for the first time. The Affordable Care Act also requires providers, suppliers, Medicare Advantage plans, and Part D plans to report and return Medicare and Medicaid overpayments within 60 days of identification.
Enhanced Penalties to Deter Fraud and Abuse: The Affordable Care Act provides the OIG with the authority to impose stronger civil and monetary penalties on those found to have committed fraud. The Secretary also is provided new authority to prevent problematic providers from participating in Medicare or Medicaid. Under the new law:
- Providers and suppliers who lie on their application to enroll in Medicare or Medicaid may be excluded from the programs.
- Providers who identify an overpayment from Medicare or Medicaid but do not return it within 60 days may be subject to new fines and penalties.
- Providers who are terminated from a state’s Medicaid program will be terminated from Medicaid programs in other states.
Tough New Rules and Sentences for Criminals: The Affordable Care Act increases the Federal sentencing guidelines for health care fraud offenses by 20-50% for crimes that involve more than $1,000,000 in losses. The law makes obstructing a fraud investigation a crime and makes it easier for the government to recapture any funds acquired through fraudulent practices. And the law makes it easier for the DOJ to investigate potential fraud or wrongdoing at facilities like nursing homes.
Greater Oversight of Private Insurance Abuses: The new law also provides enhanced tools and authorities to address abuses of multiple employer welfare arrangements and protect employers and employees from insurance scams. It also gives new powers to the Secretary and Inspector General to investigate and audit the health insurance exchanges. This, plus the new rules to ensure accountability in the insurance industry, will protect consumers and increase the affordability of health care.
Posted: January 24, 2011