Medicare Compliance & Reimbursement

Watch out: An Affordable Care Act provision allows the government to withhold Medicare or Medicaid reimbursement "where there's a credible allegation of fraud," says attorney Paula Sanders, with Post & Schell in Harrisburg, Pa. The measure was implemented on March 25.

"The provision allows the government to suspend a provider's payments before the provider receives any form of hearing or due process," says attorney Robert  Mrkette Jr., with Gilliland & Markette in Indianapolis, Ind. "This essentially punishes the provider for nothing more than a credible allegation of fraud." The final rule implementing the provision "generally established an outside limit of 18 months for the government to conclude its investigation of the allegation," relays attorney Donna Senft with Ober/Kaler in Baltimore, Md.

The language used related to "credible allegations" is one with "an indicia of reliability," notes Senft. And that has generated significant concern among providers who wonder if the term will be interpreted "to parallel the concept of a scintilla of evidence applied in administrative law cases," she adds.

How the government construes a "credible allegation" is very important, agrees Markette. "There is a rebuttal process [where] within 15 days, the provider can submit a statement saying why it should not have a payment suspension."

Option? "Instead of shutting down payments, which effectively puts a provider out of business, it would be better for the government to put the provider on prepayment review where they audit every claim," Markette observes. The Affordable Care Act "provided for more prepayment reviews for certain providers." But he doesn't know whether "that will be a broader response or not."

"When trying to avoid anonymous complaints, providers should keep in mind the No. 1 source of tips may be their own staff," warns Markette. "That's why you want to have an effective compliance plan and culture in the organization. Staff should be able to access an internal reporting system. You want staff to know they can report."

Tip: "Don't promise you will maintain their anonymity," however, warns Markette. "That's a bad promise to make, as management may have to reveal at some point who made the complaint."

2 smart moves: Conducting exit interviews to document whether departing staff members have compliance concerns can be helpful, suggests Sanders. The interviews "are time consuming and a lot of times you don't get information. But at least you can say you asked and the employee didn't bring an issue to your attention." She also recommends conducting an annual attestation where you ask every employee "to fill out a form indicating if they have seen or heard anything or have any concerns about potential problems or wrongdoing."

Complaints could also come from competitors, who become disgruntled for any number of reasons, says Markette. "Maybe your business is doing better or you have a better referral source. And they see your census growing faster than theirs and presume you have to be doing something wrong." So they report their suspicions to the government.

But "if you are known in the community as being very clearly concerned about compliance, a competitor may come to understand that you are just successful," says Markette.

Sharing best practices informally and through professional meetings, as well as trying to maintain collegial, friendly relationships with other providers, can also help. That approach may not protect you against an anonymous tip or other "credible allegation," says Markette, but he notes that it could help your case when making a rebuttal. "It may also help the industry, as it becomes clearer that providers are taking compliance more seriously," he adds.

"There is always going to be the green-eyed monster, however," Markette cautions. He points to an Arkansas case where a provider filed a lawsuit under the False Claims Act alleging that a provider was involved in a kickback scheme with a nursing home. But "most providers aren't going to go down the road of trying to get their competitor's payment suspended without having some evidence."

Watch out for this: While staff and competitors could complain, Markette thinks credible allegations of fraud will probably come from auditors, such as ZPICs. That's where having an effective compliance program can detect and correct mistakes before they become a repeated pattern that "morphs into fraud," he says.