OIG Issues Spring 2016 Semi-Annual Report

Recently the Health and Human Services (“HHS”) Office of Inspector General (“OIG”) issued its Spring 2016 Semi-Annual Report (“Report”) to Congress for the six-month period ending March 31, 2016. The OIG is mandated to report on a semiannual basis to Congress on the administration of HHS’ programs. The Report summarizes OIG’s activities, including key accomplishments, and significant enforcement and investigations.

Below are some highlights from the Report:

  • OIG reported expected recoveries of more than $2.77 billion consisting of $554.7 million in audit receivables and approximately $2.22 billion from investigative receivables (includes $336.6 million in non HHS investigative receivables from HHS’ work in areas like the State’s shares of Medicaid restitution)
  • 428 criminal actions against individuals or entities that engaged in crimes against HHS programs and 383 civil actions, such as false claims and unjust-enrichment lawsuits filed in federal district court, civil monetary penalties (“CMP”) settlements, and administrative recoveries related to provider self-disclosure matters
  • CMPs recoveries have increased five-fold over the past three years and will exceed prior recoveries in FY 2016
  • OIG excluded 1,662 individuals and entities from participating in federal health care programs
  • Health Care Fraud Strike Force team, a key component of Health Care Fraud Prevention and Enforcement Action Team (“HEAT”), brought charges against 87 individuals/entities, 100 criminal actions and collected $116.8 million in investigative receivables

Examples of OIG’s enforcement actions, Medicare Strike Force activities, settlement agreements and audits reports issued during the October 1, 2015 – March 31, 2016 period are also included in the report.

In one example the government contended that the healthcare system entered into an improper contractual arrangement with a group of specialist physicians. Under the arrangement, the physicians were required to refer patients for outpatient procedures to the system in exchange for compensation that exceeded fair market value and took into account the volume or value of the referrals. As a result, the healthcare system agreed to pay more than $72 million and enter into a 5-year Corporate Integrity Agreement to address its liability under the False Claims Act.

The Report also highlighted EMTALA violations of two different hospitals that resulted in the maximum penalty payment of $50,000. In one instance, the hospital decided to transfer two gunshot victims even though OIG determined that the hospital had the capacity and capability to treat both patients. In the second example, the Mississippi hospital refused to accept the transfer of the patient due to its new policy that it would not accept patients from Louisiana.

Hospital systems should take heed of HHS’ ongoing effort to investigate fraud, waste and abuse, particularly HHS’ increase in assessing CMPs. Moreover, hospitals, at a minimum, should review its physician arrangements to ensure there is no appearance of self-referral or Stark law violation. Lastly hospitals should ensure that its EMTALA policies and procedures are current, cover the responsibilities of on-call physicians and accepting out of state patients, and are reviewed thoroughly with appropriate personnel.

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