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The federal government is enhancing its efforts to pursue those health care providers whom it believes have consistently filed claims inappropriately for payment by Medicare, Medicaid, and other federal health care programs. Over the past several months, the Office of Inspector General (OIG) and Center for Medicare and Medicaid Services (CMS) have issued reports emphasizing that those providers who receive high levels of payments and those who do not comply with educational efforts should be targeted for review and sanctioned for overpayments.

The OIG issued a report in December 2013, which reviewed the Medicare payments made to clinicians who received the largest cumulative payments from Medicare in 2009. The OIG evaluated how many of these providers were audited or investigated and the outcomes of such investigations. Based upon the high level of overpayments uncovered by the Medicare Administrative Contractors (MACs) and Zone Program Integrity Contractors, the OIG recommended that CMS focus efforts on identifying a certain cumulative payment threshold and closely monitoring and auditing providers at or above that threshold.

CMS also issued a Change Request to the Medicare Program Benefit Integrity Manual, with an effective date of Jan. 15, 2014, detailing how MACs should address what were labeled as “recalcitrant providers and suppliers,” those who do not change inappropriate or illegal behavior associated with filing claims with the federal health care programs despite education and training. The report noted that the OIG will cooperate with CMS in moving forward with any cases uncovered and emphasized that Medicare contractors should pursue any applicable sanctions, including civil monetary penalties and exclusion from the Medicare program, to address recalcitrant providers. The Medicare Program Benefit Integrity Manual will now include criteria for the MACs to consider before referring a provider issue to the Fraud and Abuse Sanctions and Suspensions (FASS) team within CMS’ Center for Program Integrity (CPI). There is an emphasis under those criteria for documentation of the education attempts provided by CMS to the provider.

In another effort to reduce fraud and promote transparency, the Obama administration issued a policy that will be effective March 18, 2014 whereby individuals can request Medicare payment information for providers under the Freedom of Information Act. Each request will be reviewed on a case-by-case basis and a determination made whether the need for public access is outweighed by the providers’ privacy rights. Depending upon how the information is provided to requestors, it could result in further confusion and misleading conclusions rather than clarification and transparency. This policy follows the May 2013 lifting of a federal district judge’s injunction from 1979 that prohibited Medicare officials from disclosing payment information about individual physicians.

Given these recent enforcement initiatives by CMS and the OIG, providers should be even more careful to properly document the medical necessity of services provided. Even though the services may be legitimate, without such documentation the claims may be viewed as fraudulent.

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For more information, please contact:

Richard S. Cooper

Jane Pine Wood

Bridget Cougevan Howard

McDonald Hopkins has a large and diverse healthcare practice, which is national in scope. The firm represents a wide variety of healthcare providers, facilities, vendors, technology companies and associations. Our diverse experience enables us to give our clients a unique perspective on the issues that may confront them in the rapidly evolving healthcare environment.