OIG-HHS Chief Counsel Lew Morris provides sweeping testimony to Congress

by Ben Vernia | June 19th, 2010

On June 15, Chief Counsel to the Inspector General Lewis Morris testified before the House Subcommittees on Health and Oversight of the U.S. House Ways and Means Committee on Reducing Fraud, Waste and Abuse in Medicare. In his prepared remarks, Morris covered a lot of ground, including past and current anti-healthcare fraud efforts and accomplishments and foreseeable problems under healthcare reform.

Among the conclusions he drew from past investigations:

  • Healthcare fraud is increasingly sophisticated, violent, and spreads “virally” both throughout a community and from one locality to another;
  • Aligning Medicare/Medicaid payments with market costs (particularly for durable medical equipment purchase and rental) could save substantial amounts of money;

Morris outlined a five-point strategy for combating healthcare fraud:

  • Enrollment: Scrutinize individuals and entities that want to participate as providers and suppliers prior to their enrollment or reenrollment in the health care programs.
  • Payment: Establish payment methodologies that are reasonable and responsive to changes in the marketplace and medical practice.
  • Compliance: Assist health care providers and suppliers in adopting practices that promote compliance with program requirements.
  • Oversight: Vigilantly monitor the programs for evidence of fraud, waste, and abuse.
  • Response: Respond swiftly to detected fraud, impose sufficient punishment to deter others, and promptly remedy program vulnerabilities.

Morris emphasized the new authorities in the Affordable Care Act to combat healthcare fraud, including new funding:

From its inception in 1997 through 2009, HCFAC Program activities have returned more than $15.6 billion to the Federal Government through audit and investigative recoveries, with a return on investment of more than $4 for every $1 invested in OIG, DOJ, and FBI investigations, enforcement, and audits. HCFAC-funded activities have a further sentinel effect, which is not captured in this return-on-investment calculation. HCFAC-funded activities are a sound investment, and HHS and DOJ are receiving vital new HCFAC funding – $10 million per year for 10 years in FYs 2011–2020 in ACA, and an additional $250 million spread across FY 2011–2016 in the Health Care and Education Reconciliation Act of 2010. With our share of this critical new funding, OIG will expand our Medicare and Medicaid investigations, audits, evaluations, enforcement, and compliance activities to support our health care program integrity efforts.

Newer models of healthcare reimbursement will, he stressed, create new challenges:

remain important fraud-fighting tools. However, some new arrangements may require new approaches to combating fraud, waste, and abuse. Moreover, depending on their design and operation, some new arrangements may pose different risks that will need to be addressed. These risks could include, for example, stinting on care, discrimination against sicker patients, misreporting quality and performance data, and gaming of payment windows to “double bill” for otherwise bundled services. Further, industry stakeholders have raised concerns that existing fraud and abuse laws designed to restrain the influence of money on medical decisionmaking may complicate or impede certain reforms because the fraud and abuse laws generally restrict economic ties between parties in a position to generate Federal health care program business for each other.

He then described the government’s efforts in the past few years to streamline and centralize data used to identify, investigate, and prosecute healthcare fraud, noting that this, and the Healthcare Fraud Enforcement Action Team (HEAT) strike forces, have resulted in over 500 healthcare fraud arrests and 300 convictions. As one example of the potential “sentinel effect” of such enforcement actions, Morris stated that durable medical equipment claims in South Florida decreased by 63 percent to just over $1 billion from nearly $2.76 billion after the first year of the strike force there.

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