The Obama Administration recently unveiled its proposed federal budget for fiscal year (FY) 2011. The proposed budget totaling $3.8 trillion allocates a significant amount of resources to the Department of Health and Human Services (HHS) and the Department of Justice (DOJ). Of particular note, is the increased funding for healthcare fraud enforcement. Specifically, the President proposes to increase discretionary spending for fraud programs by 80 percent, from $311 million to $561 million in FY 2011. Further, the budget plan increases the HHS Office of Inspector General’s (OIG’s) funding for fraud and abuse activities by $125 million, from $251 million to $376 million. Additional highlights related to healthcare compliance include:
- The expansion of the Medicare Fraud Strike Force program, a HHS-DOJ operated program designed to combat Medicare fraud, from seven to twenty cities;
- The allotment of $25.5 billion for the Medicaid program, by extending the temporary increase in the Federal Medical Assistance Percentage under the American Recovery and Reinvestment Act to six months;
- A decrease in Medicare funding by $683 million in FY 2011 and $500 billion over the next ten years;
- An allocation of $110 million to strengthen health IT initiatives; and
- The administration of Medicare demonstration projects to evaluate the quality of care and healthcare costs.
In addition to increased funding for healthcare fraud enforcement, the President recently issued a memorandum that directs all federal departments and agencies to expand their use of audits to detect improper reimbursement of federal dollars. According to the memorandum, the Administration will use the Payment Recapture Audit model, which is the model used by Medicare’s Recovery Audit Contractors. Under this model, auditors will be paid on a contingency basis where compensation is linked to identified improper payments.
So what does this mean for healthcare compliance? Overall, it is apparent that the federal government is increasing its anti-fraud efforts and continuing investigations and enforcement of penalties to violators. The government is already equipped with sophisticated analytic techniques such as time‐sequencing analysis, clustering, and association rules to identify improper Medicare payments and potential cases of fraud. With the additional funding under the proposed budget, the government will have the resources to combat fraud, waste, and abuse at full force.
As a result, providers must ensure that the proper safeguards are developed and implemented in order to monitor, detect, and remediate fraud and abuse of federal health care programs. The most effective method to protect your organization in this regulatory and enforcement environment is with risk management. Providers are encouraged to conduct a risk assessment to identify and mitigate areas of weakness. Subsequent to identifying your risk areas, providers should conduct regular audits to monitor their compliance. Audits may be internal or external; however, engaging an external auditor will provide your organization with a neutral perspective that can add value to your audit. Overall, implementing these steps will not only facilitate compliance but also protect your organization from costly legal fees, penalties, and even exclusion from federal health care programs.
To view the documents related to the budget go to: http://www.whitehouse.gov/omb/budget/Overview/.
Posted by: Camella Boateng, Associate at Strategic Management.
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