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Government News
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June 29, 2009
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1. Details of health reform bill provisions affecting health plans, and the potential costs of the bills, continue to emerge from the House, Senate and White House. Here's an overview of several key developments from the week of June 22:
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Senate committees: On June 25, Senate Finance Committee Chairman Max Baucus (D-Mont.) said his committee's reform proposal would cost less than $1 trillion over 10 years. The bill, which the finance committee had sought to release June 18, was delayed after a Congressional Budget Office estimate placed the pricetag at a higher-than-expected $1.6 trillion over the next decade. In a note to investors, Wachovia Capital Markets analyst Matt Perry said the revised cost estimate could be seen as favorable for health plans because it might indicate that the bill will be "less ambitious and therefore could leave more of the current health insurance marketplace intact." The goal of the bill is to cover 97% of Americans for $1 trillion or less. As of AIS's press time, details of the bill had not been released and a mark-up had not been scheduled. The Health, Education, Labor and Pensions (HELP) Committee, which released its proposal this month, will continue to mark up its bill after Congress returns from the July 4 recess.
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House committees: On June 19, the Committees on Ways and Means, Energy and Commerce, and Education and Labor released their combined health reform proposal. Among other things, the proposal calls for an individual mandate as well as a "pay or play provision" for employers, an expanded Medicaid program and premium subsidies for families that have annual incomes of up to 400% of the federal poverty level. Public health insurance options would be available through an insurance exchange modeled after the Massachusetts Connector. Coverage would have three tiers: Basic, Enhanced and Premium. The bill also calls for the creation of a public insurance option. The cost of such a law, if it successfully provided health coverage to 97% of those now uninsured, would be $3.47 trillion over 10 years, according to HSI Network, LLC., a Minnesota-based consulting firm.
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The White House: President Obama on June 24 made his case for health reform in a nationally televised town-hall meeting. Some critics dubbed it an "infomercial" for its lack of specifics. The reformed health system the president envisions includes an insurance exchange through which people who don't have employer-based coverage can compare insurance policies and select coverage. Among the options available, he added, should be a public plan "where we set up an insurer that isn't profit-driven, that can keep administrative costs low, and that can serve as competition to the private insurers." He stressed that such an entity would compete on a "level playing field" with for-profit insurers and contended that private insurers would still be able to make a profit because an individual mandate would mean health plans would have more enrollees. "I think that the insurance companies will still thrive," Obama said.
What would
a public health insurance option mean for health insurers, and how
should plans respond? Find out from AHIP's Scott Keefer and Diane
Archer of the Health Care for All Project. Register for AIS's June
30 audioconference by calling (800) 521-4323 or clicking
here.
2. The U.S. Supreme Court said on June 22 that it will hear a case that could dictate how whistleblowers file lawsuits, according to the court's docket. The question before the court is "whether an audit and investigation performed by a state or its political subdivision constitutes an 'administrative…report…audit, or investigation' within the meaning of the public disclosure jurisdictional bar of the False Claims Act." The U.S. Court of Appeals for the 4th Circuit decided in June 2008 that the public disclosure bar applies only to federal administrative audits, reports, hearings or investigations. It does not apply to those conducted by a state or local government, the appeals court said. The case is Graham County Soil and Water Conservation District, et al. v. U.S., ex rel. Karen T. Wilson. Visit www.supremecourtus.gov.
3. Illinois Gov. Pat Quinn (D) on June 18 signed legislation that will make health insurance more affordable for laid-off workers of businesses with fewer than 20 employees. In addition to Illinois, 37 other states have passed COBRA-like extension coverage laws for employer groups of fewer than 20 employees. Under the federal American Recovery and Reinvestment Act of 2009, those who formerly worked at companies of 20 employees or more became eligible for a subsidy that reduces the cost of COBRA continuation health care coverage by 65%. The bill signed by Quinn provides a 65% health insurance payment subsidy to those who worked for companies with fewer than 20 employees. It also gives employees of small businesses who lost their jobs after Sept. 1, 2008, a second chance to enter the program. The law provides up to an additional three months of coverage for many former employees.
4. Under the Medicare Fraud Strike Force's expanded operation in Detroit, 53 people have been indicted for schemes to submit more than $50 million in false Medicare claims, the Department of Justice (DOJ) said June 24. The defendants are charged with offenses including conspiracy to defraud Medicare, criminal false claims and violations of the anti-kickback statute. The schemes primarily involve infusion therapy and physical/occupational therapy providers, DOJ says. The defendants - including physicians, medical assistants, patients, company owners and executives - allegedly submitted claims to Medicare for treatments that were not medically necessary or were never provided.
5.
Blue Cross Blue Shield of Michigan (BCBSM) settled a class-action
lawsuit and will pay $1 million to approximately 100 families whose
children were either denied coverage for autism treatment under
the insurer's policies or paid for their care out of pocket after
May 1, 2003. The settlement is still subject to approval by
U.S. District Court Judge Stephen Murphy III in Detroit. The insurer
had earlier filed a motion seeking dismissal of virtually the entire
case on legal grounds, but Murphy permitted the case to go forward
and scheduled the matter for further proceedings, including a settlement
conference before Magistrate Michael Hluchaniuk, according to attorney
Gerard Mantese, who filed the lawsuit. In the suit, the plaintiff
alleged that BCBSM's pattern and practice of characterizing Applied
Behavioral Analysis (ABA) as "experimental," and thus
as excluded under its insurance policies, was arbitrary, capricious,
illegal and contradicted by many years of scientific validation.
Last month, the insurer said that beginning July 1, the plan will
offer its customer groups the ability to purchase coverage for treatment
programs for children diagnosed with autism. The new BCBSM benefit
option involves coverage for children aged two to five years who
use ABA.
6.
Rhode Island Gov. Don Carcieri (R) and Lt. Gov. Elizabeth
Roberts (D) have won their battle with the state's House Finance
Committee over a budget proposal that would have eliminated the
state's Office of the Health Insurance Commissioner. On June
17, the finance committee voted to save the state $700,000 a year
by discharging Health Insurance Commissioner Christopher Koller
and his three-member staff. Finance Committee Chairman Steven Costantino
(D) told The Providence Journal June 18 that the commissioner's
duties could be handled by other state agencies. Although all parts
of state government were expected to cut staff, Koller and his staff
were the only positions that the committee's proposed budget specifically
eliminated. After hours of debate on June 24, the state's House
of Representatives voted 69-to-5 to approve a $7.76 billion 2010
state budget with the insurance commissioner's office intact. Visit
www.rilin.state.ri.us/House.
7.
Blue Cross & Blue Shield of Rhode Island (BCBSRI) on June
25 said it had notified the Office of the Health Insurance Commissioner
(OHIC) that it will not withdraw its recent rate filing. The
insurer contends it stands to lose approximately $125 million if
OHIC does not approve the rate requests for its small and large
employer group markets. The insurer says that prior to the rate
increase request, it took "numerous steps" to reduce operating
expenses, including the elimination of 79 positions and "eliminating
non-essential programs and services." High medical costs are
the primary driver of the rate increase request, according to the
firm.
8. Robert Bourseau, the former
co-owner and board chairman of City of Angels Medical Center
in Los Angeles, pleaded guilty June 16 to paying illegal kickbacks
for patient referrals, according to the U.S. Attorney's Office
for the Central District of California. Boursea admitted
to paying the kickbacks in a scheme to defraud Medicare and
Medi-Cal by paying recruiters to find homeless people who would
be admitted to City of Angels as inpatients to receive unnecessary
health services, the feds say. Bourseau faces a maximum of 10
years in prison when he is sentenced and has agreed to pay more
than $4.1 million in restitution to Medicare and Medi-Cal.
Reprinted from the June 29, 2009, issue of REPORT
ON MEDICARE COMPLIANCE
9. Louisiana State University Health Sciences Center (LSU) received overpayments totaling nearly $58,000 in 2004 and 2005 for the chemotherapy drug oxaliplatin, the HHS Office of Inspector General (OIG) says in an audit report (A-06-08-00086) posted June 19. LSU submitted 18 claims for oxaliplatin treatments during 2004 and 2005. On two claims, the hospital billed for 10 times the number of units of oxaliplatin that were actually administered due to a computer error. OIG recommends that LSU (1) ensure that the overpayments were accurately refunded to the fiscal intermediary and (2) establish procedures to ensure that the units of drugs billed correspond to the units of drugs administered. LSU agreed with the findings and said it has taken corrective action to ensure that future claims are correct.
10. Eight Miami residents have been indicted in a "remarkable" and "sophisticated" scheme that attempted to defraud Medicare of about $100 million and spanned five states, the U.S. Attorney's Office for the Southern District of Florida said June 22.
According to the indictment, two different conspiracies were taking place. First, the feds allege that Michel De Jesus Huarte and unnamed conspirators controlled and operated six infusion therapy clinics in Miami-Dade County. De Jesus Huarte allegedly recruited "nominee owners" for each clinic and paid them to sign corporate records, bank records and other business-related documents, the feds say.
The clinics submitted about $50.2 million in false Medicare claims for expensive medical treatments for cancer, HIV, AIDS, chronic pain and varicose veins, the feds say. Medicare paid about $19.2 million out of those claims.
The feds say the second conspiracy involved De Jesus Huarte and the remaining seven defendants submitting about $19.8 million in false claims to private insurance companies that offer Medicare Advantage plans. This alleged scheme involved eight infusion therapy clinics in Florida, Georgia, Louisiana, North Carolina and South Carolina.
It also involved two check-cashing stores that allegedly would accept the insurance companies' checks, deposit them into corporate bank accounts and wait for them to clear.
The seven co-defendants helped recruit "nominee owners" for the clinics or operated the check-cashing stores, the feds explain. The government says the bogus owners were paid handsomely for their services and there was "the understanding that the 'straw' owners would flee to Cuba to avoid law enforcement detection or capture."
Additionally, the defendants allegedly purchased the names and other personal identifying information of Medicare beneficiaries without their knowledge or permission in order to submit the false claims. They also "misappropriated" the names and identification numbers of physicians to submit the claims, according to the indictment.
"With the new Medicare fraud cases being indicted in the Southern District of Florida every week, it is easy to become numb to otherwise egregious fraudulent conduct and staggering loss amounts," Acting U.S. Attorney Jeffrey Sloman said in a prepared statement. "This case is remarkable, not only in terms of the amounts stolen from Medicare, but also in terms of its sophistication and geographic breadth."
Six of the defendants are charged with conspiracy to commit Medicare fraud and/or conspiracy to commit money laundering. De Jesus Huarte and one other person are charged with Medicare fraud, conspiracy to commit Medicare fraud, money laundering, conspiracy to commit money laundering and aggravated identity theft. The defendants face a maximum statutory sentence of 10 years in prison on each of the fraud counts and conspiracy counts, plus two years for identity theft.
An
attorney for De Jesus Huarte could not be reached for
comment.
Reprinted from the June 29, 2009, issue of REPORT
ON MEDICARE COMPLIANCE
11.
NIH is now reviewing the 49,000 comments it received
in response to its draft guidelines for human stem cell
research. NIH spokesman Don Ralbovsky told AIS that
NIH intends to post the comments but has not yet decided
where they will be available. The draft guidelines were
issued April 17; comments were accepted until May 23.
NIH plans to issue final guidelines by July 7. A variety
of groups, including the U.S. Council of Catholic Bishops,
had made their comments known before the comment period
ended
Reprinted from the June 2009 issue of REPORT ON RESEARCH COMPLIANCE
Additional
government news appears in
AIS's
HEALTH BUSINESS DAILY
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| Hot Products |
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New • The AIS Guide to Medicare Compliance Risks & Strategies • Health Plan Facts, Trends and Data 2009-2010 • Complying With the Mental Health Parity and Addiction Equity Act • The AIS Guide to Blue Cross & Blue Shield Plans* Best
Sellers • Guide to Managing Never Events and HACs • The Aging of America: Implications for the Business of Health Care *Not affiliated with BlueCross BlueShield Association or its member companies See full
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