Leading attorney sees focused government anti-fraud effort

By MATTHEW HAY

HHBR Washington Correspondent

WASHINGTON – Home care providers can expect to see a focused government attack on fraud and abuse in the short term, but probably no sweeping investigations, according to one leading attorney.

"It is fair to say the area of compliance is not going away," Stuart Kurlander, a partner with Latham and Watkins, said at the National Association for the Support of Long Term Care’s annual meeting in Washington Jan. 28. He noted President Clinton’s recent request for additional money to hire fraud fighters to put on-site at Health Care Financing Administration (HCFA; Baltimore) contractors and said there is no indication the government is giving up or going home.

"I do think the efforts are going to be selective," Kurlander added. In a number of areas that concern long term care providers, Kurlander said the government has already been "in our face for five or six years," and he predicted the government is not likely to initiate broad new efforts across some areas, such as durable medical equipment.

Many of the problems were driven by overutilization, which have been minimized by reductions in allowables, as well as increased focus on coverage criteria, according to Kurlander. But he added that providers continue to see targeted reviews that are documentation-oriented, aimed at companies with higher reimbursement rates. That includes greater scrutiny of certificates of medical necessity (CMN), as well as an overall effort to contact beneficiaries by phone to see whether they actually required the product provided.

"We have had some victories, and we have had some losses," said Kurlander. For example, he noted a success last year in the area of power wheelchairs when the government issued a new evaluation form on top of the CMN. Industry representatives successfully argued to the Office of Management and Budget (Washington) that it violated the Paperwork Reduction Act, and HCFA was forced to withdraw the form.

Kurlander said he has also seen some efforts targeted at manufacturers. Several recent inquiries raised questions about marketing practices and violations of the anti-kickback statute, as well as potential violations of the False Claims Act. He said that the government stated the investigation was not tied to a whistleblower.

Instead, Kurlander said the government indicated it had examined Web sites and found some interesting language in some of those sites. He predicted providers will see additional focus in the e-commerce area as healthcare moves into that area. "If you are developing programs along those lines, I would be cautious about the way you advertise yourself on those pages," he warned. "The government is looking at them."

Kurlander also noted that in both the Balanced Budget Act of 1997 and the Balanced Budget Reform Act of 1997 the government has cracked down on the reasonable cost system. "They generally have gotten rid of it almost across the board," he said.

But Kurlander said that the government’s best weapon against overutilization and fraud and abuse is not paying providers in a way that reimburses them for their actual costs. "If they reimbursing them on more of a prospective payment basis, there is less maneuvering room for that particular entity and less of a problem on the compliance side," he said.