HHS regulations allow suspension of Medicare, Medicaid, and CHIP Payments following credible fraud allegations
On September 20, 2010, the United States Department of Health and Human Services (“HHS”) proposed new rules to help prevent waste, fraud, and abuse in the Medicare, Medicaid, and Children’s Health Insurance Programs (CHIP). Based on the fraud prevention tools supplied by the Affordable Care Act, the Centers for Medicare & Medicaid Services (“CMS”) will be able to save the Medicare Trust Fund money by avoiding fraudulent claims. Currently, CMS operates under a “pay and chase” approach in which fraud is retroactively identified after the distribution of claim payments. According to HHS Secretary Kathleen Sebelius, “Using these new fraud prevention measures, CMS will be able to move from a ‘pay and chase’ approach to one that makes it harder to commit fraud in the first place.”
Among the newly proposed fraud prevention rules are regulations that permit the Secretary of HHS to suspend payments to Medicare and Medicaid providers and suppliers pending the outcome of an investigation of credible fraud allegations. The regulations require that HHS and the Office of the Inspector General (“OIG”) evaluate the credibility of these fraud allegations. The proposed regulations define a “credible allegation of fraud” to include (without limitation) the following:
- fraud hotline complaints,
- claims data mining,
- patterns identified through provider audits,
- civil false claims cases, and
- law enforcement investigations.
To be deemed “credible,” the allegation must have an “indicia of reliability,” which is determined by HHS on a case-by-case basis, taking into account all relevant factors and circumstances.
Existing regulations authorize the suspension of payments under certain scenarios for a maximum of 180 days. The proposed rules modify these regulations to give CMS discretion when imposing or terminating a suspension, and eliminate the 180-day time limit for suspensions. The new rules also authorize HHS to impose a temporary moratorium on Medicare, Medicaid, and CHIP enrollment to facilitate the prevention of fraud, waste, and abuse without hindering beneficiaries’ access to care.
The proposed regulations are designed to be an effective tool in the prevention of fraud in the Medicare, Medicaid, and CHIP programs by facilitating payment only to legitimate providers and suppliers. The suspension of a legitimate provider or supplier unjustly accused of fraud, however, may have dire financial consequences.