Mitchell Warner, P.A. - Medical Law Alert

Health Law Matters

FEDERAL AGENCIES PROVIDE FALSE CLAIMS ACT GUIDANCE

By Steven K. Sanborn, Mitchell Warner, P.A.

INTRODUCTION
On June 3, 1998, the Department of Justice and the Department of Health and Human Services, office of the Inspector General issued separate guidelines pertaining to their enforcement objectives under the Federal False Claims Act. While both guidelines set standards for enforcement officials to follow prior to initiating enforcement action, only the OIG Guidelines set forth a minimum threshold for deciding whether the agency will pursue a civil penalty or criminal conviction.

Health care advocacy groups, including the American Hospital Association, have been putting pressure on both the enforcement agencies and Congress to curtail enforcement under the False Claims Act for unintentional billing errors. These groups have supported proposed legislation in Congress, including the Health Care Claims Guidance Act, which is presently being considered on Capital Hill. These groups support the newly released guidelines. Not surprisingly, qui tam advocates, such as Taxpayers Against Fraud, criticized the federal agencies for backing down in the face of pressure from the hospital industry.

DOJ GUIDELINES
The DOJ Guidelines are contained in a memo issued by U.S. Deputy Attorney General Eric Holder, Jr. to government prosecutors across the country. These guidelines outline legal and factual predicates for determining whether false claims exist and whether the provider knowingly submitted false claims. The DOJ Guidelines list eight factors which U.S. Attorneys can use to determine whether a provider knowingly submitted false claims:

whether the provider was given notice of the rule or policy upon which a potential case would be based;
the clarity of the rule or policy at issue;
the pervasiveness and magnitude of the false claims;
whether the provider has a compliance plan in place and is adhering to it;
whether the provider identified the wrongful conduct, took steps to remedy it, or reported it to a government agency;
whether the provider sought guidance from the Health Care Financing Administration or its agents regarding the rule in question;
whether the provider has been previously audited regarding similar billing practices; and
any other information that bears on the provider's state of mind in submitting false claims.

However, the Guidelines state that the above-listed factors are not intended to be exhaustive.

The DOJ Guidelines also calls for establishing working groups to oversee the laboratory unbundling initiative and all future national initiatives. These working groups will be comprised of assistant U.S. attorneys and trial attorneys. For each enforcement initiative, a working group will prepare guidance and sample documents, including legal analyses, tolling agreements, and compliance and settlement agreement language. The working groups will also prepare a general investigative plan outlining the steps each U.S. Attorney's office should take.

The Guidelines recommended that prosecutors release "contact$#34; letters when first notifying a provider of potential FCA exposure before specifically demanding payment. The memo also recommended that particular attention be paid to entities and providers that choose to resolve claims without legal representation, and to the impact that enforcement action may have on rural communities. The Guidelines will be subject to review in six months.

OIG GUIDELINES
The OIG issued new guidelines for its enforcement officials to use when developing and participating in health care enforcement. These Guidelines were included in a letter from Inspector General June Gibbs Brown to Representative Ron Klink. Brown explained that her office was seeking to minimize variation in investigative protocols and settlement principles among the judicial districts.

The OIG Guidelines suggest minimum error thresholds that could help determine whether OIG would refer a case to a Medicare intermediary for overpayment recoupment, or to the DOJ for consideration of civil or criminal charges. The thresholds will be a monetary sum and/or a percentage error rate that will be established based upon applicable statutes, regulations, and program guidelines, as well as applicable provider data such as Medicare/Medicaid revenues, prior audits, notice given to the provider community, number of erroneous claims, and overpayment liability.

OIG is responsible for establishing the terms of the corporate integrity agreement executed following a settlement by a provider with the government. Brown stated: "The OIG Guidelines recognize that it may be appropriate to establish a graduation of compliance measures in order to take into account factors such as the size of the provider and its history of compliance with program requirements." While not every guideline will be applicable to every enforcement initiative, any deviation from the protocol must be approved by the Deputy Inspector General for Investigations.

The release of the Guidelines had an immediate impact on Capital Hill. Representative William Delahunt, a co-sponsor of proposed legislation entitled the Health Care Claims Guidance Act, announced that he was backing away his support of the bill following the release of the Guidelines. Delahunt's aide stated that the move was a good faith effort toward the federal agencies action in issuing the guidelines. Attorney General Janet Reno has already advised the President to veto any legislation that would weaken the government's use of the FCA.

CONCLUSION
Physicians need to examine the guidelines closely to determine whether they are at risk of violating the False Claims Act. Although the guidelines do not limit or restrict enforcement agencies ability to act, they do provide some level of protection for health care providers who are making conscious efforts to comply with the laws. These guidelines provide little, if any, protection for providers who intentionally overbill or act fraudulently, or who act in reckless disregard to whether they are in compliance with the billing rules. A physician continues to face huge fines and treble damages should he or she neglect to ensure that Medicare and Medicaid billing is done in accordance with the rules.

	Top		Home		Areas		Attorneys
			Articles		Links		Contact Us		Disclaimer

Health Law Matters is a publication of the Mitchell, Eyster & Warner Health Law Group. Its purpose is to provide general information about significant legal developments, and should not be construed as legal advice on specific factual scenarios.