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Patricia O'Connell
Senior Communications Manager

Health Care Practice Co-Chair Weighs in on Anti-Fraud Challenges for 2011

BNA's Health Care Fraud Report
January 12, 2011

Wiley Rein’s Kirk Nahra discussed the myriad fraud-fighting issues facing the health care industry in 2011 in a recent BNA article.  Among the challenges that industry experts have identified are permissive exclusions, new anti-fraud contractors and more stringent enrollment standards for federal health care programs.  Health care attorneys predict that the government will continue to prosecute violations of the Stark law—a physician self-referral law.  New tools will also be available to providers to help offset their risk.  “Providers also will have limited information on how the self-disclosures will work, which may reduce the effectiveness of the program.” Mr. Nahra—co-chair of the firm’s Health Care Practice—said.  “The government has been seeking to develop an effective voluntary disclosure program for more than a decade now.  It hasn’t worked so far, and there is no particular reason to think it will work again now.  Until the government can provide specific details and specific benefits, this kind of a program is unlikely to work,” he noted.

Anti-fraud contractors such as the Medicaid RACs and ZPICs will add to an increase in regulatory oversight for the industry in 2011, with ZPIC in particular being at the center of conflict of interest issues.  Mr. Nahra said that “the government has tried a variety of contractor-oriented approaches to help with the fight against fraud, with none of them working very well.  It is hard to see that this latest effort will fare any better.”  He added that “the ‘conflict of interest’ problem is an inherent one—if you have reasonable knowledge and experience in the area, you will have some basis for that knowledge and experience that likely will involve a kind of conflict.  In addition, the government hasn’t yet developed an appropriate framework for these contractors that factors in all of the elements that are needed for effective fraud detection.”

Mr. Nahra said that compliance programs, such as a mandatory compliance program requirement included in the Patient Protection and Affordable Care Act, will likely not be a high priority for the Centers for Medicare & Medicaid Services (CMS).  “CMS is unlikely to penalize organizations simply for failing to have an effective compliance program in place.  Rather, penalties will be increased if CMS discovers a program integrity violation and then discovers that the organization does not have an effective compliance program,” he explained.  “The government should provide lots of advice and information about these programs, but should not be too aggressive, especially in early years, about taking action against reasonable good faith efforts to develop appropriate compliance programs,” Mr. Nahra concluded.