CMS Proposes Increased Incentives for Information on Misuse

The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would increase incentives for people to report information that leads to a recovery of funds from individuals and entities that have or are engaged in Medicare fraud and abuse. The proposed rule would also improve CMS’ ability to detect new fraud schemes, and help ensure that fraudulent entities and individuals do not enroll in or stay enrolled in Medicare.

“President Obama has made the elimination of fraud, waste and abuse, particularly in health care, a top priority for the administration,” said Secretary Sebelius.  “Today’s announcement is a signal to Medicare beneficiaries and caregivers, who are on the frontlines of this fight, that they are critical partners in helping protect taxpayer dollars.” Over the last three years, the administration has recovered over $14.9 billion in fraud, some of which resulted from fraud reporting by individuals – a proven tool in helping the government detect fraud, waste and abuse in the Medicare program.

Comments should reference file code CMS-6045-P and are due by June 28, 2013.

CMS issued a fact sheet summarizing its proposed changes for the Medicare Incentive Reward Program as well as new provider enrollment provisions outlined in the proposed rule.

 CMS propsed to increase the potential reward amount for information that leads to a recovery of Medicare funds from 10 percent to 15 percent of the final amount collected. The current program caps the reward at $1,000, meaning CMS pays a reward on the first $10,000 it collects as a result of a tip.

CMS is also proposing to increase the portion of the recovery on which CMS will pay a reward up to the first $66 million recovered – this means an individual could receive a reward of $9.9 million if CMS recovers $66 million or more.

In 1998, CMS began paying rewards to individuals who reported tips that led to the recovery of funds, as part of the Health Insurance Portability and Accountability Act (HIPAA) of 1996, codified at 42 U.S.C. 1395b-5. Since 1997, more than 3.5 million beneficiaries have learned how to recognize and fight fraud and abuse, and more than 7,000 referrals have been made to the CMS and the Office of the Inspector General for investigation.

To date, CMS has recovered approximately $3.5 million as a result of this program and paid just $16,000 for 18 rewards. The proposed changes are similar to the IRS whistleblower program that has resulted in recoveries of over $2 billion since 2003.

“Public involvement in our anti-fraud efforts is critical because alert and vigilant providers, beneficiaries, family members, and caregivers are able to detect and prevent fraud as it occurs,” the proposed rule states. “Information from beneficiaries and other parties helps us to quickly identify fraudulent practices, stop payment to suspect providers and suppliers for inappropriate services or items, and prevent further abuses in the program. However, many people do not report suspected fraud because they are not monitoring claims submitted to Medicare for their care, or noticed a suspicious claim but were not motivated to report. Every fraudulent claim submitted contains a beneficiary’s Medicare number. Therefore, we believe that each complaint we receive may represent hundreds of other individuals that did not spot a fraudulent activity or did not report their suspicions to us.”

To promote the importance of reporting fraud, CMS conducts national campaigns to train Medicare beneficiaries and caregivers to detect and prevent health care fraud. On March 7, 2012, CMS released new explanations of benefits (Medicare Summary Notices (MSNs)) that are easier to read and provide instructions on how to spot fraud available online, and starting in 2013, the new MSNs will be mailed out quarterly to beneficiaries.

At § 420.405(e)(3), CMS proposes to limit eligibility for a reward to the first individual who provides CMS with specific information on a provider or supplier that is engaging in, or has engaged in, acts or omissions that constitute grounds for the imposition of a sanction under section 1128, section 1128A or section 1128B of the Act or that has otherwise engaged in sanctionable fraud and abuse that leads to a review or investigation by CMS or law enforcement or other actions that result in the imposition of a sanction. Once CMS receives information on a specific provider or supplier for a specific time period of the alleged sanctionable conduct, CMS will consider the provider or supplier to be subject to a review or investigation by CMS, its contractors, or its law enforcement partners.

In new paragraph (f)(3), CMS proposed to add a requirement that upon notification of eligibility, or when otherwise required by CMS, an individual must complete an attestation stating that

• he or she is not participating and has not participated in the sanctionable conduct,
  
• he or she is not otherwise ineligible to receive a reward,
  
• that the information he or she has furnished is accurate and truthful to the best of their knowledge, and that
  
• he or she acknowledges that knowingly failing to provide truthful information could subject him or her to potential civil and criminal liability.
  

Section 203(b) of HIPAA directs CMS to discourage the provision of, and to not consider, information that is frivolous or irrelevant to the imposition of a sanction. An attestation may discourage individuals from furnishing baseless reports of sanctionable conduct. CMS is soliciting comments on whether it should adopt the proposed approach of requiring the completion of an attestation, the timing of the attestation, and on the content of any attestation.

CMS proposed clarifying that an individual is not eligible for an IRP reward if he or she has filed a qui tam lawsuit under the federal or any state False Claims Act. CMS is also proposing not to give a reward for the same or substantially similar information that is the basis of a payment of a share of the amounts collected under the False Claims Act or any state False Claims Act, or if the same or substantially similar information is the subject of a pending False Claim Act case.

In new paragraph (c)(2)(v), CMS proposed to clarify that an individual is not eligible for a reward under the IRP if he or she is eligible for a reward for furnishing the same or substantially similar information to the federal government under any other federal reward program or payment under federal law.

CMS Provider Enrollment

“Provider enrollment is the gateway to Medicare.” CMS routinely evaluates its provider enrollment policies, and has implemented new safeguards as a result of the Affordable Care Act. In the February 2011 final screening rule (72 FR 5862), CMS identified additional changes in enrollment policy that would increase the integrity of the Medicare program. Now, CMS is proposing include the following provisions:

• Add the ability to deny the enrollment of providers, suppliers and owners affiliated with an entity that has unpaid Medicare debt. This proposal would prevent individuals and entities from being able to incur substantial debt to Medicare, leave the Medicare program and then re-enroll as a new business to avoid repayment of the outstanding
  
• Medicare debt. CMS is proposing that it would only enroll individuals or entities if they repay the debt or enter into a repayment plan, if they are otherwise eligible for the program.
  
• Deny enrollment or revoke the billing privileges of a provider or supplier if a managing employee has been convicted of certain felony offenses within the preceding 10 years. This provision ensures that CMS can block or remove bad actors from the Medicare program to protect beneficiaries and safeguard the Medicare Trust Fund.
  
• Permit CMS to revoke billing privileges of providers and suppliers that have a pattern or practice of billing for services that do not meet Medicare requirements. This proposal is intended to address providers and suppliers that regularly submit inaccurate claims in such a way that it poses a risk to the Medicare program.
  
• Make the effective date of billing privileges consistent across certain provider and supplier types. Most practitioners and practitioner groups may only submit bills as of the filing date of their enrollment application. CMS is proposing to eliminate ambulance suppliers’ current ability to bill for up to a year prior to enrollment in the Medicare program. CMS is also proposing to require that ambulance providers and other provider and supplier types submit any claims within 60 days of revocation of billing privileges, consistent with the requirements for practitioners and practitioner groups.
  

CMS said that current regulations do not adequately articulate the distinction between enrolling in Medicare: (1) To obtain Medicare billing privileges; and (2) solely to order or certify items or services for Medicare beneficiaries. Thus, CMS proposes to clarify the definition of enroll/enrollment to include the later situation.

CMS is proposing to modify the list of felonies to deny a provider or supplier’s Medicare billing privileges such that any felony conviction—including guilty pleas and adjudicated pretrial diversions—that CMS has determined to be detrimental to the best interests of the Medicare program and its beneficiaries would constitute a basis for denial or revocation. This would give CMS the discretion to deny or revoke enrollment based on any felony conviction that it believes to be detrimental to the best interests of Medicare and its beneficiaries. CMS said it is expanding this list because it is “unwise” to restrict its authorities to only certain felonies, particularly since the types of felony offenses often vary from state to state.

“Any felony conviction, regardless of the type, raises real questions as to whether the provider or supplier can be relied upon to be a trustworthy partner in the Medicare program, and it is important to do everything possible to prevent unnecessary risks to Medicare beneficiaries and the Medicare Trust Fund,” CMS explained. Thus, CMS would remove the enumerated list of felonies and instead provide that enrollment may be denied or revoked based upon any such felony conviction.

CMS also would expand its authority to include felony convictions against a provider or supplier’s “managing employee,” as that term is defined in § 424.502. CMS said it has “found numerous instances in which a particular managing employee of a provider or supplier has as much, if not more, control of and involvement with the entity as does the owner.” Thus, CMS said “that managing employees should be held to the same standard as owners in this regard. Clearly, having a managing employee with a felony conviction raises questions about whether the provider or supplier can be a responsible participant in the Medicare program.”

Section 424.535(a)(8) states that a provider or supplier’s Medicare billing privileges may be revoked if the provider or supplier submits a claim or claims for services that could not have been furnished to a specific individual on the date of service. These instances include, but are not limited to, situations where the beneficiary is deceased, the directing physician or beneficiary is not in the state or country when services were furnished, or when the equipment necessary for testing is not present where the testing is said to have occurred.

Consequently, CMS proposed to expand this revocation reason by adding a new paragraph that would permit revocation if we determine that the provider or supplier has a pattern or practice of billing for services that do not meet Medicare requirements such as, but not limited to, the requirement that the service be reasonable and necessary. This revocation reason would differ from that in paragraph (a)(8)(i) in two ways. First, while the former deals with individual claims, paragraph (a)(8)(ii) addresses overall billing patterns. Second, paragraph (a)(8)(i) addresses situations involving claims for services that could not have been furnished. Paragraph (a)(8)(ii) would deal with cases where the services were furnished but the claims do not meet Medicare requirements.

While CMS is soliciting comment on what should qualify as a “pattern or practice” under the proposed change, CMS envisions that a common—though by no means the only—scenario in which proposed § 424.535(a)(8)(ii) could apply would be “one where a provider or supplier is placed on prepayment review and a significant number of its claims are denied for failing to meet medical necessity requirements over time.”

Indeed, any situation in which an unusually or abnormally high volume of claims are denied over time because they do not meet Medicare requirements could potentially trigger § 424.535(a)(8)(ii), though much would depend, of course, on the particular facts of the situation. In each case, CMS would take into account several factors, including, but not limited to the following:

• The percentage of submitted claims that were denied.
  
• The total number of claims that were denied.
  
• The reason(s) for the claim denials.
  
• Whether the provider or supplier has any history of “final adverse actions” (as that term is defined under § 424.502).
  
• The length of time over which the pattern has continued.
  
• How long the provider or supplier has been enrolled in Medicare.
  

With respect to these factors, CMS solicits comment on the following:

• Whether additional factors should be considered and, if so, what those factors should be.
  
• Which, if any, of these factors should not be considered.
  
• Which, if any, of these factors should be given greater or lesser weight than others.
  
• Whether a minimum or maximum threshold for consideration should be established for the “percentage of claims denied” and “total number of claims denied” factors.
  

CMS also solicits comment on whether there should be a set knowledge standard associated with our proposed provision—specifically, whether revocation is warranted only if the provider or supplier submitted the claims in question with “reckless disregard” as to their accuracy or the provider “knew or should have known” that the claims did not meet Medicare requirements. CMS clarified that the proposed addition “is not meant to be used to revoke providers and suppliers for isolated and sporadic claim denials or for innocent errors in billing.” The focus is instead on situations where a provider or supplier regularly fails to submit accurate claims in such a way as to—when considering the factors previously mentioned—pose a risk to the Medicare Trust Fund.