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How will the new regulations be used? The proof is in the using Anyone who may be inclined to criticize the anti-fraud activities of the government runs into a problem right away; namely, the existence of health care fraud is undeniable, it is inexcusable, and vigorous efforts to eliminate it are appropriate. The provisions of HIPAA themselves can easily be viewed as simply giving prosecutors the weapons they need to go after the criminals that are robbing all of us. The proof of the pudding will be in how these regulations are finally used. Will they be used to seek out and destroy those providers who are truly guilty of fraud in the classic sense (that is, the intentional and willful effort to procure funds illegally)? Or will they be used as a Regulatory Speed Trap, to hound and intimidate the typical, honest practitioner who is confused about the regulations but who dearly wants to avoid even the appearance of impropriety? To me, a physician whose self-interests incline me to paranoia on this issue, the answer seems clear. I have already made the argument that our society has a deep, underlying need to find as much fraud as possible in the mistaken belief that doing so will allow us to avoid rationing. Whether you buy that argument or not, however, a sober examination of how various provisions of HIPAA are actually being applied ought to reveal their true purpose. |
Lack of clarity, and lack of desire for clarity
The best way to get rid of fraud is to promote clear and logical rules. If the objective of an anti-fraud campaign were truly to eliminate fraud from the system, then the first job of the enforcers would be to make sure that the rules and regulations are simple enough that honest, well-intended people would know how to behave.
Admittedly, this is easier said than done. It is the nature of regulations to become constantly more complex over time. “Thou shalt not kill,” for instance, is a pretty straightforward regulation, but civilization cannot leave it alone. Within a few thousands of years we find ourselves factoring in issues such as warfare, capital punishment, abortion, frozen embryos, withdrawal of life-support, physician-assisted suicide, the insanity plea, the definition of “brain-dead,” and cloning. Pretty soon deciding (in a regulatory sense) whether it’s okay to kill, or whether one is even killing, becomes next to impossible.
So it is certainly unfair to blame the Clintonians for failing to provide us with a simple code that immediately simplifies all health care regulations. Insisting on the impossible is never very useful. Health care is inherently a muddy field of endeavor, and the regulations that have evolved to govern health care are necessarily even murkier than, say, banking regulations.
On the other hand, especially when they’re talking about punishing violators with massive financial penalties or hard jail time, it is fair to expect the Clintonians to clarify specific areas of regulatory confusion. They should act as if they are interested in helping the essentially honest to stay on the straight and narrow, not in entrapping them.
In this light, it is instructive to note that when Congress was deliberating on HIPAA, the only fraud-related provision that produced significant debate was the stipulation that the government should provide “guidance” to providers regarding the legality of certain proposed activities. Under this provision, providers could seek advice prospectively from the OIG on, for instance, what is prohibited remuneration, or whether a proposed partnership structure meets safe harbor provisions under the anti-kickback law. Providers would be saying, in other words, “We don’t want to break the law, we want to be solid citizens. Here’s what we propose to do. If we do this, will we be in compliance with the law?”
The Clinton administration, the DOJ, and the OIG vociferously opposed this seemingly reasonable proposal. Their objections were based on the fear that issuing opinions before the fact would impinge on their ability to prosecute cases. This argument seems to complain (revealingly) that clarifying the regulations would lead to more compliance and therefore less fraud to uncover. In the end, the advisory opinion requirement became part of HIPAA only after Congress agreed to a compromise – the provision will automatically “sunset” after four years. And even then, President Clinton himself called for rapid repeal of these provisions just a few days after signing the bill into law.
Obviously, the Clintonians do not consider the clarification of health care regulations to be a worthwhile endeavor. Instead they see the requirement to do so as being burdensome and counterproductive to their true goal.
In any case, providers counting on these advisory opinions to keep them out of trouble are likely to be disappointed. Submitting a question for an advisory opinion to the OIG is time consuming and expensive, and when the reply is finally obtained, it can be less than helpful.To see how the OIG handled its first advisory opinion, click here.
Establishment of an anti-fraud bureaucracy
Nothing captures the true spirit of the HIPAA anti-fraud provisions more than the creation of a coordinated anti-fraud bureaucracy which gets to keep the penalties, fines and other recovered monies it collects, in order to fund ever greater enforcement activities.
In considering the implications of such an arrangement, one needs first to consider the nature of any bureaucracy. A bureaucracy is an organism that utterly depends on growth to sustain life. Every individual within a bureaucracy, whatever else she may be doing, strives every day to increase the number of people reporting to her. She must do this; it is how her worth is measured, and therefore it is her lifeblood. This growth is accomplished by expanding work roles, or better yet, by subdividing work roles into ever more specialized components, each of which requires its own staff. Bureaucracies accumulate layers as naturally as trees; you can age them by taking core samples.
The anti-fraud program creates a new federal bureaucracy with a unique new twist. Since it keeps what it collects, its rate of growth (i.e., its life-force) will be determined not by how much funding it can wheedle out of Congress, but by how much fraud it can uncover. This arrangement virtually guarantees that its fundamental motivation will not be to root out fraud, but to identify as much fraud as possible. Stamping out fraud, in fact, would be to commit bureaucratic suicide.
Descriptions of how success will be measured within this new bureaucracy reflect this fundamental reality. While lip service is given to wiping out health care fraud, the real enthusiasm within the anti-fraud units comes from their projections of the expected rate of return from their anti-fraud efforts, which is expected to be between $10 and $23 for every dollar spent. One suspects they will do whatever is necessary to achieve and maintain these projections.
If further incentive were needed, the anti-fraud bureaucracy can expect to enjoy significant public support for a long time. Especially in light of the notion that the more fraud we uncover, the less rationing we’ll have to do, it will be exceedingly difficult to incur the wrath of the people by uncovering too much health care fraud.
To go along with these powerful motivating influences, the anti-fraud bureaucracy has been granted sweeping investigative and enforcement powers. It has been given broad subpoena powers. It can acquire virtually any and all financial and medical records in existence, and can immunize those supplying the records (to assuage their fear of breaching physicians’ or patients’ confidentiality). It has the ability to freeze the assets of individuals suspected of health care fraud. Providers suspected of fraud can now be threatened with tough new federal sentencing guidelines for “white-collar” crimes. Federal prosecutors will routinely add to their list of charges such white-collar crimes as mail fraud and money laundering, both of which carry extraordinary sentences and have extremely broad applicability. Both of these charges could apply, for instance, if a provider mails to an HMO a bill containing a misstatement, then deposits the resultant check in a bank.
The anti-fraud bureaucracy will not really want to send very many doctors to jail, since jailing perpetrators will not directly benefit their anti-fraud account and thus will not contribute to their continued growth. They’ll want to send just enough to jail to make their point, then they’ll be happy to negotiate settlements with most of the other doctors who come under their scrutiny. (Most doctors who find themselves under the spotlight will be strongly incented to settle since, given the confused state of the regulations, it is almost inconceivable that the feds would come up entirely empty-handed after a reasonably thorough audit of any physician’s records.) The settlements themselves are likely to be astronomical in magnitude, given the extraordinarily high fines and penalties stipulated for health care abuse.
Meanwhile, the False Claims Act will assure that the anti-fraud bureaucracy has many leads to pursue for a long time to come. A year after HIPAA was passed, the American Hospital Association (AHA) was compelled to send a letter to the Secretary of HHS and the OIG asking for a cease-fire on whistleblower actions, pleading that almost 5000 hospitals were already under siege by federal law enforcement and investigative personnel. The climate of accusation and allegation, the AHA said, was out of control. They asked for a six-month moratorium on further actions under the False Claims Act, and to use the time to initiate a joint effort with the government to institute voluntary compliance programs, and to establish clear criteria for distinguishing simple error from genuine fraud.The OIG did not see fit to grant the Association’s request.
When federal investigators went after the defense industry in the 1980s, they conducted a sufficient number of prosecutions to get the industry’s attention, then squired the industry through the development of an adequate compliance program, then finally moved on to something else (many of these investigators moved on to health care, as a matter of fact). Given the unique structure of the new anti-fraud efforts in health care, however, it is difficult to imagine any scenario in which this powerful new federal bureaucracy would be willing to declare success and move on.
The exact shape the anti-fraud bureaucracy will eventually take has yet to be determined. But the will, the weapons, and the public support are in place to allow the formation of a bureaucracy so powerful as to make the IRS look as benign as the local visitor’s bureau – at least, to doctors.
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Surviving the Health Care System is adapted with permission from YourDoctorintheFamily.com
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