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Even with the recent victory by George Washington University (GWU) in its long-running false claims case, hospitals should not rest easy, cautions Keith Lavigne, senior vice president of ACE USA Professional Risk, an insurance and reinsurance company based in Philadelphia, PA. False claims and antitrust cases are on the rise, he says.
The False Claims Act is the government's primary tool for combating waste, fraud, and abuse by healthcare providers participating in federal healthcare programs and by other government contractors, Lavigne notes. Billions of dollars have been collected under the False Claims Act via a multitude of actions brought directly and indirectly by the Office of Inspector General, Department of Justice, whistleblowers, and billing auditors.
According to the Department of Justice, in the last three decades, recoveries have increased from a couple of hundred million dollars per year to almost $6 billion for 2013, with the proportion of recoveries from medical service providers increasing from less than 10% to more than 60%. To support the Office of Inspector General and the Department of Justice in their pursuit to crack down on fraud and abuse, other recent anti-fraud enforcement initiatives include the creation of special Health Care Fraud Prevention and Enforcement Action and Medicare Fraud Strike Force teams.
Perhaps the most aggressive of all the new initiatives was Congress' authorization for the Department of Health and Human Services, through its Centers for Medicare and Medicaid Services division, to implement programs run by third-party contractors whose primary purpose was to identify, correct and collect improper overpayments, Lavigne says. "With compensation for some of these auditors directly tied to recoveries, hospitals can expect to continue seeing an increase in medical record requests from these third-party auditors," he says.
Healthcare providers also face increased risk that their activities will run afoul of the federal antitrust laws, he cautions. Over the past four years, federal and state enforcement agencies, along with the private bar, have significantly ramped up their efforts to police anticompetitive conduct. While price-fixing, agreements to allocate markets, and monopolization remain staples of antitrust litigation, we have entered a new age of antitrust liability for healthcare providers. Investigations, challenges, and lawsuits have targeted numerous types of conduct. Anything that unreasonably restrains competition can pose antitrust risk in most industries, including healthcare, he explains.
"The growing edge for antitrust appears to relate to mergers and acquisitions. Consolidation — born of early healthcare reform and spurred by the Affordable Care Act — is being checked by a swelling tide of enforcement actions and private lawsuits," Lavigne says. "Hospital acquisitions of physician practices, mergers among physician practices, and providers consolidating with other types of providers all carry antitrust risk if they lead to the exercise of market power in the form of higher prices or reduced quality of care or access."
Healthcare market participants should not expect an abatement of vigorous antitrust enforcement, Lavigne says. The market forces that are driving the tidal wave of consolidation and the struggle for shifting and shrinking reimbursement dollars will be present for the foreseeable future.
"Because healthcare providers face more scrutiny than ever before, it is important that risk managers, in-house counsel, and compliance teams work together to develop a proactive enterprise risk management strategy to mitigate these exposures," he says.