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Institute for Workplace Studies-----------------Professor Samuel B. Bacharach

School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies

Cornell University

16 East 34th Street, 4th floor--------------------Stuart Basefsky

New York, NY 10016 -------------------------------Director, IWS News Bureau

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Congressional Research Service (CRS)

 

Health Care Fraud and Abuse Laws Affecting Medicare and Medicaid: An Overview

Jennifer A. Staman, Legislative Attorney

September 8, 2014

http://fas.org/sgp/crs/misc/RS22743.pdf?

[full-text, 14 pages]

 

Summary

A number of federal statutes aim to combat fraud and abuse in federally funded health care

programs such as Medicare and Medicaid. Using these statutes, the federal government has been

able to recover billions of dollars lost due to fraudulent activities. This report provides an

overview of some of the more commonly used federal statutes used to fight health care fraud and

abuse and discusses some of the changes made to these statutes by the Patient Protection and

Affordable Care Act (ACA).

 

Title XI of the Social Security Act contains Medicare and Medicaid program-related anti-fraud

provisions, which impose civil penalties, criminal penalties, as well as exclusions from federal

health care programs on persons who engage in certain types of misconduct. ACA amends these

administrative sanctions and authorizes the imposition of several new civil monetary penalties

and exclusions.

 

Under the federal anti-kickback statute, it is a felony for a person to knowingly and willfully

offer, pay, solicit, or receive anything of value (i.e., “remuneration”) in return for a referral or to

induce generation of business reimbursable under a federal health care program.The statute

prohibits both the offer or payment of remuneration for patient referrals, as well as the offer or

payment of anything of value in return for purchasing, leasing, ordering, or arranging for, or

recommending the purchase, lease, or ordering of any item or service that is reimbursable by a

federal health care program. ACA revises the evidentiary standard under the anti-kickback statute

and eliminates the requirement of actual knowledge of, or specific intent to commit a violation of

the statute. This amendment may make it easier for the government to prove its case.

 

The Stark law and its implementing regulations prohibit physician self-referrals for certain health

services that may be paid for by Medicare or Medicaid. Under the Stark law, if (1) a physician (or

an immediate family member of a physician) has a “financial relationship” with an entity, the

physician may not make a referral to the entity for the furnishing of these health services for

which payment may be made under Medicare or Medicaid, and (2) the entity may not bill the

federal health care program or any individual or entity for services furnished pursuant to a

prohibited referral. ACA, among other things, limits certain exceptions to the Stark law.

 

The federal False Claims Act (FCA) imposes civil liability on persons who knowingly submit a

false or fraudulent claim or engage in various types of misconduct involving federal government

money or property. Health care program false claims often arise in billing, including billing for

services not rendered, billing for unnecessary medical services, double billing for the same

service or equipment, or billing for services at a higher rate than provided (“upcoding”). Civil

actions may be brought in federal district court under the FCA by the Attorney General or by a

person known as a relator (i.e., a “whistleblower”), for the person and for the U.S. government, in

what is termed a qui tam action. ACA appears to make it easier for certain relators to bring qui

tam actions, thus potentially allowing some FCA actions to proceed that would have been

dismissed under prior law.

 

Contents

Basic Civil and Criminal Penalties and Exclusions ......................................................................... 1

Overview ................................................................................................................................... 1

Civil Monetary Penalties and Exclusions Under ACA .............................................................. 3

The Anti-Kickback Statute............................................................................................................... 4

Overview ................................................................................................................................... 4

Revising the Intent Requirement ............................................................................................... 4

Stark Law: Physician Self-Referrals ................................................................................................ 5

Overview ................................................................................................................................... 5

ACA Amendments to Stark Law Exceptions ............................................................................ 6

Whole Hospital Exception .................................................................................................. 6

In-Office Ancillary Services ................................................................................................ 8

False Claims Act .............................................................................................................................. 8

Overview ................................................................................................................................... 8

ACA Amendments to the Public Disclosure Bar ....................................................................... 9

 

Contacts

Author Contact Information........................................................................................................... 11

 

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