OIG's Strategy for Combating Fraud and Abuse

On June 15, 2010, Lewis Morris, the Chief Counsel to the Office of the Inspector General (OIG), testified to the House Committee on Ways and Means regarding the OIG's strategy to combat fraud and abuse in the health care system in light of the new Patient Protection and Affordable Care Act (PPACA). Morris provided several examples of how PPACA will enhance the OIG's health care oversight and enforcement activities.

Morris began his testimony with how PPACA will assist in the effective use of data and ensure the integrity of information for purposes of conducting oversight and law enforcement activities. For example, section 6402 of PPACA exempts the OIG from the prohibitions against matching data across programs in the Computer Matching and Privacy Protection Act and authorizes the OIG to enter into data sharing agreements with the Social Security Administration. In addition, PPACA expands CMS's integrated data repository to include claims and payment data from Medicaid, the Veterans Administration, Department of Defense, Social Security Administration and Indian Health Service and fosters data-matching agreements among the federal agencies.

These agreements, as noted by Morris, will make it easier for the OIG to detect fraud, waste and abuse. PPACA also allows the OIG to obtain information from additional entities, such as providers, contractors, subcontractors, grant recipients and suppliers, directly or indirectly involved in the provision of medical items or services payable by the federal programs. In particular, Morris noted that OIG audits of Part D payments can now follow the documentation supporting claims all the way back to the prescribing physicians. Finally, PPACA provides new civil monetary penalties for making false statements on provider enrollment applications, knowingly failing to repay an overpayment and failing to grant timely access to the OIG for investigations, audits or evaluations. With access to more high quality data, Morris believes that the OIG will better pursue fraud and abuse in the coming years.

Morris next testified about how PPACA provides the Secretary of the Department of Health and Human Services (HHS) with new authorities and requirements that help pursue fraud and abuse. Section 6401 of PPACA requires the Secretary to establish procedures for screening providers and suppliers participating in Medicare, Medicaid and the Children's Health Insurance Program (CHIP). At a minimum, providers and suppliers will be subject to licensure checks. In addition, the Secretary may impose additional screening measures based on the level of risk of fraud and abuse, including fingerprinting, criminal background checks, multi-state database inquires and random unannounced site visits. Under Section 6002 of PPACA, all U.S. manufacturers of drug, device, biologics and medical supplies covered under Medicare, Medicaid or CHIP will need to report information related to payments and other transfers of value to physicians and teaching hospitals. This information will be made available by the OIG on a public website. Section 6101 of PPACA requires nursing facilities to report ownership and control relationships. Additionally, PPACA strengthens the government's ability to respond rapidly to health care fraud. Morris noted that PPACA expressly authorizes the Secretary, in consultation with the OIG, to suspend payments to providers based on credible evidence of fraud.

Finally, Morris testified that PPACA provides critical new funding that will enable the OIG to expand and strengthen current enforcement and oversight efforts. HHS and the Department of Justice are receiving $10 million per year over the next 10 years and an additional $250 million spread across the next five years from the Health Care and Education Reconciliation Act of 2010. Morris stated that such money will be used to expand the OIG's Medicare and Medicaid investigations, audits, evaluations, enforcement and compliance activities.

Morris' testimony illustrates the government's renewed interest and expanded resources and authority in fighting health care fraud and abuse. Health care providers should be aware of and prepare for the OIG's increased efforts to root out fraud, waste and abuse in the health care system. One of the best defenses providers can utilize is the implementation of an effective compliance program. Because of these renewed and expanded government initiatives, providers may want to have their compliance program tested to determine the effectiveness of their program and to discover areas for enhanced attention. For Morris' full testimony, see http://www.oig.hhs.gov/testimony/docs/2010/morris_testimony61410.pdf.