OASIS Alert

New anti-fraud regs increase CMS's reach to combat fraud and abuse.

All it will take to ruin your agency is a disgruntled employee or competitor to make a call to a proposed fraud hotline, if a new payment suspension proposal passes.

In the past, HHAs and beneficiaries who have tried to report Medicare fraud have complained that their information has fallen on deaf ears. But now the feds might be going too far in the other direction.

The Centers for Medicare & Medicaid Services has proposed a number of anti-fraud regulations based on the health care reform law, including new authority to impose payment suspensions on suspicious Medicare providers.

To trigger the suspension, CMS would have to have a "credible allegation of fraud," according to the proposed rule published in the Sept. 23 Federal Register. Credible allegations of fraud can come from fraud hotlines, claims data, audits, qui tam cases, law enforcement investigations, and other sources, CMS says in the rule. And the allegations must have "inidicia of reliability."

CMS will have to consult with the HHS Office of Inspector General and, if necessary, the Department of Justice to determine what's credible on a case-by-case basis, the rule proposes.

Payment suspensions can also trigger if a provider fails to submit an "acceptable" cost report to its intermediary, the rule says.

"Suspension of payments will cause a significant adverse impact on cash flow for providers, especially given the broad definition proposed for a 'credible allegation of fraud,'" warns attorney Julie Mitchell with Mitchell Day Health Law Firm in Ridgeland, Miss. "What we are looking at ... is significant in terms of financial cash flow to providers, regardless of whether the allegations are well founded or not."

The standards for triggering a payment suspension "are relatively amorphous," worries attorney Robert Markette Jr. with Gilliland & Markette in Indianapolis.

"It is not clear what will be considered to be 'indicia of reliability,' but it seems this is a fairly low standard for a preemptive suspension of payments."

Watch out: "The regs make it appear that it will be relatively easy for the government to rely upon even an anonymous hotline tip" to impose a suspension, Markette says. "Given that the standard of proof to start the suspension is relatively low, this means a provider could be put out of business even though they have not done anything wrong."

"When did a call to the fraud hotline become a credible allegation of fraud?" asks Washington, D.C.-based health care attorney Elizabeth Hogue. The lack of specifics on what constitutes an "acceptable" cost report is also worrying, Hogue says.

"With this expanded power, all providers should be wary of CMS's ability to suspend all payments for an extended term without advance notice," warns the National Association for Home Care & Hospice. NAHC hopes CMS will use the payment suspension power "very cautiously. Once it is triggered, the resulting harm is usually permanent and an innocent provider would have no real recourse."

That's because there are very few due process protections involved with the suspension, says attorney Joel Hamme  with Powers Pyles Sutter & Verville in Washington, D.C. All home care providers "should be concerned about the ability of the government to suspend payments due to suspicion of fraud," Hamme tells Eli.