Bipartisan bill would gut False Claims Act
Bipartisan bill would gut False Claims Act
On March 19, bipartisan legislation was introduced in Congress to spike the federal False Claims Act, the biggest gun in federal investigators' fraud enforcement arsenal.
The bill, called the "Health Care Claims Guidance Act," was introduced by Reps. Bill McCollum (R-FL) and Bill Delahunt (D-MA) to prevent investigators from the Department of Justice and the HHS Office of the Inspector General from applying the False Claims Act in cases where billing mistakes occurred but there was no actual fraud.
The legislation would amend the False Claims Act by:
· Imposing a "de minimus" standard.
By imposing this standard, providers who receive overpayments from Medicare of less than a certain percentage could be fined by no more than the full amount of the claim plus interest.
· Establishing two safe harbors for hospitals.
The first safe harbor would protect hospitals that unintentionally submitted false claims based on advice received from their fiscal intermediaries and Medicare carriers. Under the safe harbor, these hospitals would be subject to fines limited to actual damages and interest, not triple damages plus $5,000 to $10,000 per case.
That's important because many hospitals in the past have acted on incorrect advice from their intermediaries, says Mary Greeley, JD, Washington, DC, counsel of the American Hospital Association (AHA), which has lobbied hard in support of the bill. "In a lot of cases, hospitals have received instructions from intermediaries saying, 'Do it this way,'" Greeley says. "Then the Department of Justice says, 'No, that's not the way you're supposed to do it.' If you relied on [fiscal intermediaries] then the False Claims Act shouldn't come into play."
The second safe harbor protects hospitals that have adopted an effective compliance program. If found in violation of the False Claims Act, such hospitals would also be subject only to actual damages plus interest.
· Raising the False Claims Act's controversial burden of proof requirement from "a preponderance of the evidence" to a standard of "clear and convincing evidence."
"Under the Justice Department's tactics, hospitals and health systems are presumed guilty until proven innocent," said Dick Davidson,president of the AHA in a prepared statement. "But mistakes are not fraud, and canoccur when you're trying to comply with a payment system covered by 1,756 pages of law,1,257 pages of regulations interpreting the law and thousands of additional pages of instructions."
The problem, Greeley says, is that the steep fines and triple damages federal investigators are able to collect using the False Claims Act, coupled withthe threat of exclusion from the Medicare program, force most hospitals to settle with thegovernment simply "because you know that the standard is merely preponderance of the evidence."
Greeley says the AHA would like to see a return to the days whenhospitals were able to amicably resolve issues of over- and underpayment with HCFA'sintermediaries. "That's the way we're used to doing business," she says."At the end of the year, if there are overpayments, you repay the money, and if it's been over a period of time, you repay with interest."
The False Claims Act, she contends, should only be invoked in case where the government is able to obtain clear evidence of a major violation of the law.
Subscribe Now for Access
You have reached your article limit for the month. We hope you found our articles both enjoyable and insightful. For information on new subscriptions, product trials, alternative billing arrangements or group and site discounts please call 800-688-2421. We look forward to having you as a long-term member of the Relias Media community.