Home Health & Hospice Week

Under the health care reform law's tough new fraud-fighting provisions, regulators will take your money first and ask questions later.

"The [HHS] Secretary may suspend payments to a provider of services or supplier ... pending an investigation of a credible allegation of fraud against the provider of services or supplier, unless the Secretary determines there is good cause not to suspend such payments," says the Patient Protection and Affordable Care Act (PPACA).

The Department of Health and Human Services will "consult with" the HHS Office of Inspector General to determine whether the allegation of fraud is credible and therefore triggers the suspension, continues the legislation that President Obama signed into law March 23.

Timeline: The law contains no implementation date for this provision, but does direct HHS to publish regulations about the change.

This provision finds the provider guilty without a trial, protests consultant Tom Boyd with Rohnert Park, Calif.-based Boyd & Nicholas. Because providers get "no cash while waiting for clearance," he notes, the provision could close some innocent providers' doors forever.

The payment suspension provision is just one of many fraud-fighting initiatives included in PPACA. The Obama administration expects the law's fraud and abuse measures to raise millions to pay for overall health care reform.

Other PPACA compliance provisions that will most affect home care providers include:

• Compliance programs. As-yet-unspecified Medicare providers must establish a compliance plan "as a condition of enrollment" in Medicare, PPACA says. HHS and the OIG in conjunction will establish "core elements" for the required compliance program.

HHS has discretion on which providers will fall under this requirement and what their deadline will be, according to the law. But home care providers are likely to top the list, experts agree.

Durable medical equipment and home care "are two industry sectors that the HHS may prioritize in establishing mandatory compliance program requirements," predicts law firm Morgan Lewis in  an analysis of the  new provision. That's due to "the relatively low rate of compliance program adoption by ... DME and home health, as compared to other industry sectors, such as hospitals and health systems," the firm notes. The law and the Centers for Medicare & Medicaid Services' focus on enrollment requirements for DME and home health also may be a good indicator.

Small providers are likely to feel the burden of this provision the most, Morgan Lewis expects. That's because "many, if not most, larger health care providers already have some form of compliance program."

The American Association for Homecare plans to share the code of ethics it has been developing, which should help suppliers meet the compliance plan requirement, the trade group says.

• Repayment timeliness. Providers must return any overpayments within 60 days of identifying them, the law spells out. If providers knowingly fail to return overpayments by the deadline, they are subject to False Claims Act-level penalties -- treble damages and fines, notes BKD's Tom Watson on the firm's website.

Watch out: The law sets the deadline for this provision as May 22, Watson warns. "Providers that may be aware of known or potential overpayments should carefully assess their repayment obligations prior to that date to avoid possible FCA provisions," he urges.

CMS hasn't yet defined what the definition is for "identification" of overpayments, Watson adds. Stay tuned to forthcoming CMS regulations for more details.

• False claims liability increases. PPACA makes some dramatic changes that will increase false claims liability. For one, penalties for kickback violations will increase. "A claim that includes items or services resulting from a [kickback] violation ...constitutes a false or fraudulent claim," the law says. "A person need not have actual knowledge of this section or specific intent to commit a violation of this section."

Secondly, as of March 23, the reform legislation "lifted the bar for qui tam relators to use public documents to bring a whistleblower lawsuit under the qui tam provisions in the False Claims Act," reports attorney Neville Bilimoria with Duane Morris in Chicago. Previously, the whistleblower had to be the original source of the information about the provider, he adds. "If surveys can be used as a basis for a qui tam lawsuit " look out," he warns.

The repayment timeliness provision (see previous page) also increases FCA liability.

These changes "reverse the recent judicial trend toward limiting FCA qui tam actions," notes law firm Gibson Dunn on its Web site. They "will likely increase both the number and type of whistleblower suits."

• Documentation. You finally are receiving a helping hand in getting referring physicians to cough up necessary documentation for medical review. But if your documentation or response to medical review is sloppy, it could be you on the chopping block.

HHS "may revoke enrollment, for a period of not more than one year for each act, for a physician or supplier ... if such physician or supplier fails to maintain and ... provide access to documentation relating to written orders or requests for payment for durable medical equipment, certifications for home health services, or referrals for other items or services," the law spells out.

Already in place: The effective date of this provision is retroactive to Jan. 1, 2010, PPACAsays.

• Screening. The law requires screening of providers. HHS will "determine the level of screening ... according to the risk of fraud, waste, and abuse" in the industry, PPACA says. That surely will put home care providers at the top of the screening list, industry observers expect.

Screening will include a licensure check and might also include a criminal background check, fingerprinting, unscheduled and unannounced site visits (including pre-enrollment ones), database checks, and others.

Providers will have to pay for their own screenings, to the tune of $500 for institutions and $200 for individuals, the law says. Those rates will be adjusted upward for inflation going forward. This provision takes effect in September.

• Enrollment safeguards. PPACA calls for other preventive measures such as revalidation of enrollment information (which many home care providers already have undergone); increased initial oversight of new Medicare providers; and disclosure of current or previous affiliations withproviders that have or had certain payment problems. Those problems include uncollected debt,payment suspension under a federal health care program, exclusion from participation, or billing privilege denials or revocations.

HHS can also declare a temporary moratorium on enrollment of new providers if HHS "determines such moratorium is necessary to prevent or combat fraud, waste, or abuse," the law says.

• Surety bonds. HHS must take suppliers' and agencies' volume of billing into account when calculating amounts for surety bonds, PPACA says.

What surety bond requirement? HHAs do not currently have a surety bond requirement enforced, but the legislation refers to bonds for home health agencies too.

• Recoupments. When entities share a tax ID number, CMS can adjust payments for one entity based on another entity's "past due obligations," PPACA says. This is true "regardless of whether the applicable provider of services or supplier is assigned a different billing number or national provider identification number under the program."