HHS IG unveils new CIA claims review procedures

OIG gets high marks for loosening the reigns on corporate integrity agreements

In an open letter to health care providers, Health and Human Services (HHS) Inspector General (IG) Janet Rehnquist offered specific criteria providers can use to avoid corporate integrity agreements (CIA), the new bane of federal health care fraud enforcement.

"This is definitely consistent with the trends that we have been seeing," says Arthur Di Dio, a health care attorney with Arent Fox in Washington, DC. "There are no gimmes’ in these new claims review procedures," he says, "but they go a significant way in making CIA requirements much more reasonable for providers."

Rehnquist says the Office of Inspector General (OIG) recognizes that in certain cases it may be appropriate to release the OIG’s administrative exclusion authorities without a CIA. Her Nov. 20 letter directs OIG staff to consider eight criteria — ranging from whether the provider self-disclosed the alleged misconduct to how long ago the conduct occurred — to guide that determination as well as the substance of those agreements.

The IG also is modifying the provisions of CIAs that address billing reviews and the use of independent review organizations. Specifically, the CIA billing review requirements will mandate the use of a full statistically valid random sample only if the initial claims review, otherwise known as a discovery sample, identifies an unacceptably high error rate. The OIG will use seven specific measures to make this determination.

The OIG’s latest step is a continuation of a trend that started with the former IG’s open letter of March 2000, which signaled for the first time that settlements would not always require CIAs. Only this time the IG lays out specific factors that providers should point out when they negotiate settlements. "They also leave it open that other factors might also be relevant," notes health care attorney Jesse Witten of Jones Day in Washington, DC.

Some factors seem more important than others, adds Witten, such as whether a provider has a sound compliance program and whether the matter came to the government’s attention as a result of a self-disclosure. "Those are two items that go to a provider’s state of mind and also are two things that providers can do something about," he asserts.

"In some cases, one factor might tip the scale in one direction or another," says Witten. For example, if the issue in question occurred long ago or very little money is at stake, those facts should be determinative even if the provider is weak in the other seven areas.

Di Dio says the most significant change is the creation of the financial error-rate threshold of 5%. He says this shows the OIG has listened to provider concerns regarding the financial impact of CIAs and their onerous requirements.

On the other hand, 5% is a fairly small threshold. "That means you get it right 95% of the time, and that is no easy task for any provider," he asserts. "They are definitely trying to maintain an enforcement flavor while making an attempt to reach out to providers."

While Di Dio takes a favorable view of the IG’s overall effort, he also notes that the letter contains some "wishy-washy" language. For example, the OIG indicates that providers may use discovery samples as probe samples but only "in the OIG’s discretion under certain circumstances."

The OIG makes it clear that it reserves the right to not apply these new claims review procedures to existing CIAs, Di Dio says. "I wish they would have been a little bit more clear in informing the health care community, particularly those who are party to existing CIAs, exactly how these claims review procedures can be applied to their existing CIAs and possibly used to modify those CIAs."

Deborah Joslyn, a senior manager with Ernst & Young in Iselyn, NJ, has other concerns. She says that while the industry has witnessed a decline in fraud and abuse, providers should not view the seven elements as perfunctory or assume the OIG is concerned only with billing audits.

"I think that misses the forest for the trees," she warns. "The reason providers get into trouble is typically due to poor controls." To the extent that some of those controls are eliminated, providers will wind up back in trouble, she cautions.