The Fraud Enforcement and Recovery Act of 2009 (FERA)

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How the Healthcare Qui Tam affects health care organizations

In 2009, President Obama signed the Fraud Enforcement and Recovery Act of 2009 (FERA) into law (Dowell, 2009). FERA now covers a wide range of areas that focus on false claims, and now the government has improved investigative authority to pursue such false claims. Thus, it also affects people who “intentionally keep Medicaid or Medicare overpayment and make fraudulent claims for compensation, payment, or approval” (Dowell, 2009).

These efforts have introduced significant changes, which will have adverse effects in “all health care organizations that receive federal funds directly or indirectly” (Dowell, 2009).

False claims have long history in the US. Thus, the federal government has embarked on the Act as a way of reducing cases of fraud in the health care sector. Any individual who provides false claims to the federal government is liable for prosecution under the False Claims Act. Moreover, any persons who submit such false claims knowingly for payment are also liable for prosecution.

The False Claims Act has introduced private parties, commonly known as “qui tam or relators” to facilitate prevention of frauds on behalf of the federal government (Gumbert, 2003). Such people share a given percentage of proceeds recovered from the settlement or fines. Offenders can incur penalties ranging between “$5,000 and $10,000 for each false claim filed and three times the severity of damages the government sustains because of the act” (Dowell, 2009).

In addition, the health care institution may face a possible and forceful exclusion from the Medicare and Medicaid programs. This is under the False Claims Act, which remains the main tool for DOJ to prosecute suspects (Ruhnka, Gac and Boerstler, 2000).

Qui tam lawsuits provide an effective method in which members of the public or whistleblowers can provide information against false claims and testify against perpetrators of such fraudulent activities in the health care sector. Most of these fraudulent activities have direct consequences on the government, Medicare, and Medicaid programs. For instance, every year, the federal government loses more than $30 billion to false claims.

Initially, health care fraud definition only covered deceptive techniques that organizations or individuals used to defraud the federal government. Today, the definition also includes unreasonable lack of knowledge about the law. Data from the Department of Justice (DOJ) indicate that the government has recovered more than $3 billion from lawsuits related to qui tam since 1986. Most these claims originated from the health care sector (Weinman and Ryan, n.d).

Four examples of Qui Tam cases that exist in a variety of health care organizations

Quorum Health Group, Inc. settled claims against two qui tam lawsuits, which involved “Medicare fraud and the allocation of funds from a hospital to its home health agency” (Quorum Health Group, Inc., n.d). The company had to pay nearly “$77.5 million and $95.5 million together with 7.25 percent interest” (Quorum Health Group, Inc., n.d) until the last installment. An employee engaged in improper activities at the Flower Hospital, which led to the fraud. The former staff filed the case against Quorum, and the company had to cooperate with the government during the investigation.

TAP Pharmaceuticals settled one of the largest health care fraud fines in the US health care fraud claims. The company decided to settle about $875 million due to false Medicare claims and issues of kickbacks (Phillips & Cohen LLP, 2013). The qui tam lawsuit claimed that the company paid physicians to recommend and dispense its cancer drugs, Lupron. It also claimed that the company pursued physicians to charge for drug samples supplied. The Medicare was responsible for 80 percent of the cost of drugs.

Several family-owned medical equipment and billing companies have defrauded the federal government in Medicare operations. Laura and David Hernandez alongside other members of the family earned prison sentence for making false claims of more than $17 million in the past decade under Medicare scheme.

David Hernandez opened a chain of companies to supply medical equipment by recruiting different people in order to conceal his identity in the scandal. They accused were also a part of conspiracy and money laundering scheme in the sector. In addition, the accused paid kickbacks to “patients for the use of their Medicare numbers” (Goldstein, 2009).

Aventis Pharmaceuticals Inc. also paid $190 million in 2009 for qui tam lawsuit. The company had made false claims to the Medicare and other federal programs in which it sought payment for fraudulent marketing and pricing of drugs (Weinman and Ryan, n.d). The company inflated its prices to both the federal and state governments for its Anzemet drug. The company intentionally used the proceeds to market, promote, and sell the drug. Thus, both the federal and state governments overpaid the company in terms of reimbursement.

Weinman and Ryan reports that “pharmaceutical companies have been the favorite targets for federal health care enforcement actions over the past decade” (Weinman and Ryan, n.d). Most of these lawsuits have originated from private persons, who file claims on behalf of the US government. Most cases start as civil cases, but later turn to criminal pleas in which offenders pay fines and face jail terms. Under the law, whistleblowers have received millions as percentages of proceeds from the fines. Publicity and rewards have motivated private individuals to file such lawsuits on behalf of the government for compensation. Consequently, qui tam cases have increased in the health care fraud significantly.

A procedure for admission into a health care facility that upholds the law about the required number of Medicare and Medicaid referrals

The most important step is to develop thorough screening procedures for all providers and suppliers who have enrolled in Medicare and Medicaid programs. This would ensure that the government excludes health care providers who pose risks to the sector from a list of eligible providers. Thus, patients will not interact with such facilities.

The system must identify areas of vulnerability in health care facilities. These include “coding and billing, documentation, reasonable and necessary services, improper inducements, kickbacks, and self-referrals” (Indest, 2012). Any procedure for admission must review these areas for compliance.

There should be standards and procedures for health care facilities to follow before admission. These procedures must comply with the best practices in the health care sector and Medicaid and Medicare requirements. Some facilities lack standards and procedures for admission while there are risk areas in hospitals.

Thus, hospitals should identify such risk areas during admission, particularly with a third-party billing company. Such health care facilities need to incorporate guidelines and compliance procedures for any third party, which provides billing service or referral services to their facilities. In fact, health care facilities should insist on their own procedures and standards during admission.

Health care facilities should have compliance officers to ensure that providers adhere to appropriate standards and procedures during referral to their facilities. Such officers must oversee effective implementation of hospital compliance programs during admission. They must also pursue any complains and formulate an appropriate response mechanism to providers against any claims. However, some facilities may not have compliance officers due to costs. Such facilities should rely on standards and procedures during referral and admission in order to avert cases of fraud.

The hospital facility must act on suspected cases of fraud or any violation of the standards and procedures. The hospital must review all referral and admission cases in order to ascertain whether they comply with the Medicare and Medicaid requirements. If the hospital detects any anomaly, then it must take corrective measures. For instance, the health care facility could refund overpayment, report the incident to the Medicare and Medicaid departments, or contact law enforcement officers for further investigation if necessary.

A procedure for an open communication system should facilitate exchange of data between the health care facility and providers. The OIG had previously encouraged health care facilities to implement effective communication systems in order to facilitate communication and reduce fraud. Health care facilities should embrace an open door policy in order to facilitate communication and data exchange. This shall encourage adoption of standards and procedures during referral and admission.

Health care facilities should also enforce discipline and ensure that hospitals adhere to such standards during referral and admission. In this regard, health care facilities should have effective systems to handle individuals who knowingly or unknowingly violate established standards and procedures. Thus, failure to report or account for violation should have effective remedies.

There should be effective training and education programs on the best standards and procedures for ensuring effective practices during referral and admission. Every health care facility should develop training and education program to cater for its need in areas of fraud detection and prevention. Training and education programs are critical for individuals who interact with providers and handle coding and billing roles. These individuals need to comply with the regulations and best practices in the sector in order to control fraud.

A corporate integrity program that will mitigate incidents of fraud and assess how the recommendation will impact issues of reproduction and birth

The rising cases of fraud involving health care facilities require effective integrity programs, which can prevent fraud in Medicaid and Medicare. Such integrity programs would ensure that the organization adheres to regulatory and legal requirements. In addition, they also provide operational advantages to the institution.

An efficient compliance program would ensure that all structures and resources within the organization work together in order to eliminate risks, fraud, enhance customer care, service provision, and reduce the cost of running business. The major key areas to observe for compliance may include the following areas.

First, an effective program should focus on educating and training health care workers on the importance of their roles in enhancing compliance with established standards and procedures. There are many laws and regulations, which require employees to maintain the highest standards of integrity. In fact, in the health care sector, the focus should be on bribes, kickbacks, and self-referral among individual employees.

Although anti-bribery laws exist, not many health care facilities promote them in their practices. Some employees may not be aware of such laws and breach them due to ignorance. However, the law does not recognize ignorance. Therefore, training and educating employees on such laws may be the best approach to alleviating fraud and integrity challenges in the sector. Such training and education programs should focus on specific areas, which relate to certain roles in the health care sector.

Second, it is necessary for hospitals to develop and promote their communication systems. The communication system should be open and allow people to communicate freely. Apart from facilitating the procedure in comprehending the communication system, these modes should enable employees to understand the hospitals’ conformity efforts.

There are also reasons behind such regulations and their place and role in fraud prevention. Hospitals can focus on matters, which relate to fraud and integrity among employees. In fact, through promoting ethics and integrity, health care facilities can develop a culture of compliance.

Third, there is a need to develop and maintain consistent standards and policies. The importance of such standards and procedures can promote consistence practices within the hospital. It is necessary for the hospital to ensure that only a single version of standards and procedures exist.

The organization must create awareness about any changes in the internal organizational policies and procedures. Such updates are necessary for the staff members, who must reflect current knowledge of events in the sector. In addition, hospitals must also update their code of conducts and ethical practices in order to ensure that employees maintain the expected standards in the organization.

Fourth, an effective program for ensuring integrity in the organization must promote continuous monitoring and testing. Health care providers should have a program that can control identified sources of potential risks. This is critical in promoting integrity within the organization.

However, it is important for health care providers to recognize that integrity programs require “continuous monitoring and testing in order to ensure their efficiency and accuracy in preventing fraudulent or unethical practices, negligence, and non-compliance to policies and regulations” (Indest, 2012). The organization must respond to ineffective control systems by providing improved control systems, which can provide effective controls in the system. Internal control systems should be clear and transparent for recognizing loopholes.

Fifth, the program must manage all violations and incidents. The organization should have an effective response mechanism to counter fraud attempts. In cases of a violation or incident, employees and their departments must know their roles in the process, strategies for responding, procedures for reporting, consequences, and implications of such cases to the organization and individuals involved. Therefore, health care providers must have robust systems of mitigating fraud cases or violations of internal control systems.

Medicaid and Medicare serve a large number of people in the US. Therefore, effective control systems to control abuse, misuse, and fraud would result in increased benefits to major beneficiaries. For instance, Medicaid has influenced payment for pregnancy and related care in the US. As a result, this has affected birth and reproduction in the country.

Reforms in the system and stringent rules would result in the provision of Medicaid services to many people. For instance, enrollment among pregnant women would increase in the Medicaid program. Boonstra reports that births under the Medicaid program have increased significantly since the launch of the expansion efforts in 1985.

Effective programs in place would ensure improved provisions of Medicaid to disadvantaged women, who will be able to gain access to prenatal care. The impact has reached both whites and other races in the US. The major aim of Medicaid is to “reduce delayed initiation of prenatal care among poor and near-poor pregnant women” (Boonstra, 2008). The program has achieved this objective.

The US Medicaid eligibility expansion program has achieved a great success in terms of covering for pregnancy related care. However, Medicaid impact has not significantly affected the area of maternal and newborn health (Boonstra, 2008). Overall, it is important to recognize that maternal mortality has declined significantly.

However, there are still variations in terms of race. This is due to disparities in the provision of health care services in the US. In addition, it is difficult to ascertain the effect of Medicaid on birth outcomes because cases of low birth weights still exist based on socioeconomic characteristics of women. Although Medicaid has reached most people in the US, the variations among races need further study in order to determine factors that are responsible for disparities between minority races and whites.

A plan to protect patient information that complies with all necessary laws

In the past few years, frauds have targeted information of patient and doctor, which they use for perpetuating fraud and making false claims. Thus, the best approach in protecting patients’ information within the law starts with the patients themselves. First, protection of patients’ cards is the best approach.

Patients should never disclose their information to strangers. Most frauds may claim that they need the number because of the survey they are conducting for the government. In addition, patients should not allow any other person to use their cards. There should be a direct line for reporting any missing or stolen cards and data.

Patients should not accept free medical services. People who provide such services may gather Medicare data and use them for fraud.

Patients must examine their statements against any unknown services, which never took place, unknown medical providers, supplies, and unknown medical equipment. Patients must report such cases immediately.

Senior people must protect themselves from frauds during enrollments. Finally, beneficiaries of the programs must view their credit reports. This is important to identify cases of unsettled medical bills, which may result from fraudulent activities. Patients should keep records of their interactions with physicians. They must make reports of all suspected cases of abuse, fraud, and identity theft.

On the other hand, physicians must also act within the law to protect patients’ information from theft and fraudulent activities. Physicians must have a proper documentation system, which must protect patients’ data against theft and unauthorized access. All data related to personal, diagnosis, and treatment of patient must remain secure. Well-documented medical records are useful for making any claims or justifying payment. All medical facilities should have internal control systems that can protect data and ensure accuracy in records.

Document protection with regard to medical records should adhere to specific guidelines provided or overall standards and procedures. Physicians must be familiar with these procedures and practices.

Health care providers should have control management to ensure that there are preventive systems to protect patients’ data. Staff must follow preventive controls during their work and the result must be evident in the operations. Risk management should help health care facilities to deal with the breach on patients’ information.

References

Boonstra, H. D. (2008). The Impact of Government Programs on Reproductive Health Disparities: Three Case Studies. Guttmacher Policy Review, 11(3), 1.

Dowell, M. (2009). Health Care Organizations Targeted with the Fraud Enforcement Recovery Act . Web.

Goldstein, J. (2009). Family-Run Medical Equipment And Billing Companies Enterprise Lead To Prison Time. Web.

Gumbert, J. (2003). Qui Tam Actions Under the False Claims Act. Medical Journal- Houston, 1-2.

Indest, G. (2012). Medicare and Medicaid Fraud and Compliance Plans. Web.

Phillips & Cohen LLP. (2013). TAP Pharmaceuticals paid $875 million. Web.

Quorum Health Group, Inc. (n.d). Quorum Health Group, Inc., Announces Tentative Agreements in Two Qui Tam Cases. Web.

Ruhnka, C., Gac, J., and Boerstler, H. (2000). Qui tam claims: threat to voluntary compliance programs in health care organizations. Journal of Health Politics, Policy and Law, 25(2), 283-308.

Weinman, K., and Ryan, J. (n.d). Qui Tam Actions Against Pharmaceutical Companies. Web.

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