Health care groups seek to thwart bounty hunter bill
Health care groups seek to thwart bounty hunter bill
A coalition of health care groups is pushing Rep. Dan Burton (R-IN) to exempt Medicare, Medicaid, and other federal health programs from legislation they claim would allow private contractors to use "coercive tactics" to collect alleged overpayments to health care.
Burton had hoped to push his bill to the full House Government Reform Committee before this session of Congress ends. But most observers now believe he has simply run out of time.
In its current form, Burton's bill, the Government Waste Corrections Act of 1999, would allow private recovery firms to keep up to 25% of the overpayments they identify in recovery audits, according to a committee staffer. Another 25% would be devoted to "financial management reforms," while at least 50% would be refunded to the U.S. Treasury.
A House Government Reform Committee subcommittee recently approved the measure in its current form, and as chairman of the full committee, Burton can determine when his bill will be taken up by the full committee. Meanwhile, a coalition of more than 40 health care groups headed by the American Medical Association and the American Hospital Association, both based in Chicago, and the Washington, DC-based Federation of American Health Systems has stepped up its campaign against the bill.
The coalition wrote Burton on Sept. 22 that they are "extremely concerned" his bill would duplicate existing Health Care Financing Administration (HCFA) programs, increase regulatory red tape, and possibly encourage "coercive collection tactics."
The coalition points out that HCFA already has a number of program integrity efforts under way to uncover Medicare waste or billing errors, including comprehensive medical reviews, prepayment random reviews, and the Payment Error Prevention Program. Moreover, the ink is not even dry on the task orders established under the agency's Medicare Integrity Program (MIP).
MIP allows HCFA to contract with third parties to conduct program integrity activities, but the coalition argues that adding yet another layer, such as recovery audits, could cause "duplication, confusion, and severe disruption of physicians' practices and hospital operations."
The coalition claims that Burton's bill could create "abusive situations" for hospitals and physicians by giving recovery auditors "inappropriate incentives" that apply "unfair or unreasonable standards" that are not based on complex health care law and regulations. Most issues surrounding federal health program overpayments turn on adequate documentation, appropriate classification and medical necessity that would be difficult to audit through methods established for other industries, the coalition maintains. Using a system that relies on monetary incentives or bounties to uncover billing errors would shackle hospitals and physicians with lengthy and expensive appeals.
At least one prominent advocate behind the basic concept in Burton's bill agrees. "If I was in the providers’ shoes, I would have concern with that as well," says Doug Wilwerding, CEO of Omnium, a leading private recovery firm based in Omaha, NE. He says the bill is "ambiguous" about the audit procedures that would be employed. He adds that revisions to the bill since he testified before Burton's committee in July (see "House bill would unleash fraud bounty hunters," Compliance Hotline, July 12, 1999), are only modest improvements. "There are a lot of hills yet to be climbed here."
However, Wilwerding also says that employed properly, the system his company uses takes into account the sheer volume of paper required to file a claim, as well as the fact that payment rules vary from carrier to carrier. "I don't know how the hospital can possibly know when they are doing it right or even know whether they are being reimbursed correctly," he argues. Instead, he says his company works with payers and providers to make sure claims are paid correctly both on the overpayment and underpayment sides.
He also notes that his company's methodology never puts auditors on site at a provider setting. "All of the information we need to look at because of the types of overpayments we are trying to identify is in the claim-paid database of the payer, so there is not going to be an army of auditors descending on provider settings."
Meanwhile, HCFA continues to argue that private recovery audits are the wrong tool, and could easily lead to inappropriate denials, increased appeals, and denial of proper payment.
The General Accounting Office (GAO) is now examining the issue, but is not expected to complete that study until next spring. Aides to the committee are split over whether Burton's committee will try to move the bill this year, wait until next year or wait for the GAO's report. But the smart money appears to rule out any conclusive action this year.
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