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Kirk Nahra Discusses 2014 Outlook for Health-Care Antifraud Efforts

Bloomberg BNA’s Health Care Fraud Report
January 14, 2014

Kirk J. Nahra, chair of Wiley Rein’s Privacy Practice and co-chair of the Health Care Practice, was quoted extensively by Bloomberg BNA in a January 8 article about the top health-care fraud issues facing providers in 2014.

Mr. Nahra is a member of the advisory board for Bloomberg BNA’s Health Care Fraud Report.  Based on comments from Mr. Nahra and other board members, the publication said enforcement by Medicare and Medicaid program integrity contractors is a key issue to watch this year.

The Centers for Medicare & Medicaid Services (CMS) has hired more program integrity contractors in recent years to review providers’ activities, according to the article.  Mr. Nahra said CMS has been working to “streamline, consolidate, modify, reform, re-evaluate and improve” program integrity contractors for roughly a decade, with little or no results.  “There is a virtual guarantee of ongoing change, and a high likelihood that there will be little overall improvement in the success of these programs,” he said.  “None of the programs has obviously worked at the start, and the government is unwilling to give them sufficient time to develop.”

Mr. Nahra cited potential fraud within health insurance exchanges as another top concern this year, asking:  “How will the government balance [its] anti-fraud goals with the need to get the exchanges working properly and reasonable fairness to participating entities who need some reasonable time to get things under control?”  He added that guidance from the U.S. Department of Health and Human Services (HHS) on whether the exchanges are deemed “federal health care programs” for purposes of the anti-kickback law was “very confusing.”

Federal funding for general health-care antifraud efforts also may suffer as resources are diverted to focus on the health insurance exchanges, Mr. Nahra said.  “That could be an opportunity for fraud perpetrators to act where there isn’t enough attention now,” he said.  “There is an ongoing problem of real criminal fraud—where money can be taken right away and then disappear—when resources are diverted.”

Health-care providers are facing more stringent penalties this year for the retention of Medicare overpayments, according to the article.  While providers may increasingly opt to voluntarily notify the government of potential violations, they have little confidence in the benefits of doing so, Mr. Nahra said.  “There is not enough trust in fair treatment from the government from a self-disclosure,” he said.

Mr. Nahra predicted that the Affordable Care Act will be a source of qui tam litigation this year under the False Claims Act.  Two pending Federal Trade Commission (FTC) cases involving data security—In re LabMD, Inc., and FTC v. Wyndham Worldwide—also are pertinent for health-care fraud attorneys, he said.

“If the FTC’s activities are struck down, look for Congress to step in to give the FTC new authority which may turn them into a broader ‘big picture’ regulator of practices that harm consumers at any level,” Mr. Nahra said.