Reducing Healthcare Fraud and Abuse: Making Sense of PPACA's Provisions and CMS' Final Recommended Guidelines

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The Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the "PPACA"), contains numerous provisions related to healthcare fraud and abuse and program integrity.The PPACA went into effect January 1, 2011. The CMS Final Guidelines and Rules take effect March 25, 2011. The fraud and abuse provisions will have a significant impact on the compliance programs of healthcare providers/organizations.

PPACA provisions expand provider screening and monitoring requirements
Sec. 6501. Termination of provider participation under Medicaid if terminated under Medicare or other State plan. Requires states to terminate individuals or entities from their Medicaid programs if the individuals or entities were terminated from Medicare or another state’s Medicaid program.

Sec 6502. State Medicaid agencies must exclude any individual or entity that owns, controls or manages an entity that has failed to repay delinquent overpayments; is suspended, excluded or terminated from participation in any Medicaid program; or is affiliated with an individual or entity that has been suspended, excluded or terminated from Medicaid.

CMS applicable rules and guidelines
"To ensure that only qualified providers and suppliers remain in the Medicare fee-for-service program, we require that Medicare contractors review State licensing board data on a monthly basis to determine if providers and suppliers remain in compliance with State licensure requirements". (p. 20)

According to the CMS Final Guidelines/Rules on ACA, it is already required that "Medicare contractors ensure that every provider or supplier meets any applicable Federal regulations or State requirements, including applicable licensure requirements for the provider or supplier type prior to making an enrollment determination.  In addition, we also require that Medicare contractors conduct monthly reviews of State licensing board actions to determine if an individual practitioner, such as a physician or non-physician practitioner continues to meet State licensing requirements."  (p.p. 29-30).

"We issued guidance on June 12, 2008, to State Medicaid Directors recommending that they check their enrolled providers for exclusions on a monthly basis.

We followed up that guidance on January 16, 2009, with guidance to State Medicaid Directors recommending that they require their enrolled providers to check the providers' employees and contractors for exclusions on a monthly basis. Those letters are available at: http://www.cms.gov/smdl/downloads/SMD061208.pdf and http://www.cms.gov/SMDL/downloads/SMD011609.pdf. Many States made our recommendations their policy. Section 455.436 does not mandate that States require their providers to check the LEIE and EPLS on a monthly basis to determine whether the providers' employees and contractors have been excluded. We do, however, recommend that States consider making this a requirement for all providers and contractors, including managed care contractors in their Medicaid programs and CHIP” (p. 158).

"States should report terminations on a monthly basis in order to assist other States and the Medicare program in protecting themselves from providers who pose an increased risk to government health care programs" (p. 352).

Effect on license monitoring, sanctions and exclusions screening

Licenses — CMS requires that contractors conduct monthly reviews of state licensing board actions to determine if an individual practitioner continues to meet state licensing requirements.

•    Sanctions — CMS requires that contractors conduct monthly reviews of state licensing board actions to determine if an individual practitioner continues to meet state licensing requirements.

Exclusions —PPACA expands the definition of "exclusions" to include additional crimes and civil actions such as failure to pay student loans and convictions involving controlled substances. As of Jan. 1, 2011, employers must conduct a search of ALL state Medicaid actions to determine if a licensee has been "excluded or terminated" from any other state Medicaid program. As of March 25, 2011, the PPACA recommends with guidance monthly screening for exclusions at the state and federal level for those participating in Medicaid programs and CHIP.

PPACA expands CMS' Civil Monetary Penalties

The PPACA expands the availability of CMPs by CMS to be used against providers under (Sections 6402 and 6408). The following activities were identified for the assessment of additional CMPs:

•    Knowingly retaining an overpayment and not reporting and returning such overpayment.

•    Failing to grant timely access to the OIG for audits, investigations, or other statutory function (penalty up to $15,000 per day).

•    Knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim for payment under a federal health care program (penalty up to $50,000 for each claim).

•    Knowingly making a false statement or misrepresentation on any federal health care program application, bid or contract (penalty up to $50,000 for each claim).

•    Ordering or prescribing a service during a period in which the person was excluded from a federal health care program (penalty up to $50,000 for each order or prescription)


Suspension of payments pending
Section 6402(h) of the PPACA provides that Medicare and Medicaid payments to a provider may be suspended pending investigation of a "credible allegation" of fraud against the provider, unless HHS determines that there is good cause not to suspend such payments. The provision further directs the Secretary of HHS to consult with the OIG in determining whether there is a credible allegation of fraud against the provider.




Mr. Rosen, a licensed Attorney, with over 20 years in risk mitigation experience, co-founded ProviderTrust, LLC in order to provide a compliant and efficient way to track and continuously monitor healthcare employee's licenses and certificates.  Prior to this he co-founded Background America, Inc., which was acquired by Kroll Inc. and then Marsh & McLennan Co: NYSE:MMC. During Mr. Rosen's 15-year tenure, he was promoted to president of the Background Screening Division which employed 1,000 people in 7 countries. He was responsible for developing a strategy and expansion of Background Screening globally. Healthcare screening was the focus of the company’s industry-leading regulatory and compliance solution. In addition, he developed and launched the industry-leading Identity Theft and Restoration services line.

Learn more about ProviderTrust.

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