There's still hope: Industry makes strong case for changes to program integrity

Given the level of scrutiny already placed on auditors by the Senate Finance Committee, within the next year, we expect to see significant changes in the audit process and the way in which fraud and abuse is fought in this country
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Friday, August 24, 2012

While most of the country is focused on the effect of the U.S. Supreme Court’s decision on the future of health care, one issue remains more pressing to healthcare providers and regulatory enforcement bodies: fraud and abuse. The public seems thrilled every time they see a new report showing millions of dollars in overpayment audits collected from Medicare providers. However, what they do not realize is that a significant portion of the alleged overpayments comes from providers who shut their doors or file for bankruptcy because they cannot afford to continue fighting an audit system that is intent on destroying them. For years, providers have complained about the fundamental unfairness of the audit system and the lack of transparency, to no avail. Finally, it appears as if someone is listening.

On May 2, 2012, the U.S. Senate Finance Committee sent a letter to members of the healthcare community requesting recommendations on “how to better prevent and combat…fraud, waste and abuse in the Medicare and Medicaid programs.” Industry stakeholders were urged to prepare white papers based on their individual experience in one or more of the following four areas:

(1) program integrity reforms to protect beneficiaries and prevent fraud and abuse;

(2) payment integrity reforms to ensure accuracy, efficiency and value; and

(3) fraud and abuse enforcement reforms to ensure tougher penalties against those who commit fraud. White papers were due to the Senate Finance Committee by June 29, 2012.

What makes this request notable is that it is the first time (at least in recent history) the Senate Finance Committee has ever reached out, publicly, to the healthcare community for suggestions. This unprecedented move demonstrates the Senate Finance Committee is committed to addressing impropriety, inaccuracy and lack of objectivity in the way fraud and abuse is fought. Given the state of the DME industry, this could not have come at a better time.

For DME providers, the majority of problems stem from the manner in which audits are conducted. Auditing contractors, including ZPICs and RACs, put providers on 100% prepayment audit for unknown reasons and provide no clarity or guidance on how to be removed. Then, if the providers are lucky enough to be removed from prepayment audit, the auditors use absurd extrapolations to demand millions in post-payments. For many, these post-payments go back to claims submitted in 2004, and maybe even earlier. Even larger providers can only afford to appeal these audits for so long before their financial reserves are depleted.

It is anticipated that the Senate Finance Committee will review the white paper submissions within the next few months and prepare a report outlining the most significant issues raised by all healthcare industry stakeholders.

Interestingly, on June 26, 2012, the Senate Finance Committee sent a letter to Gene Dodaro, the U.S. comptroller general, requesting that the Government Accountability Office (GAO) conduct a study that focuses on coordination efforts between auditors and CMS.

Given the level of scrutiny already placed on auditors by the Senate Finance Committee, within the next year, we expect to see significant changes in the audit process and the way in which fraud and abuse is fought in this country.

Edward Vishnevetsky is a health law and litigation lawyer at Munsch Hardt. Reach him at evishnevetsky@munsch.com or 214-855-7546.