Health provider compliance officers may soon have another cause for busy days and sleepless nights. CMS recently issued a proposed rule that, if finalized, would revise its little-used Medicare Incentive Reward Program (IRP). Under the current IRP, an individual may recover up to $1,000 for providing information that leads to the recovery of Medicare funds from individuals and entities that have engaged in fraudulent Medicare activities. The proposed rule both significantly increases the potential reward and simplifies the process that an informant must follow. It also expands CMS’s ability to deny Medicare enrollment to providers who have unpaid Medicare debts.
Since the current IRP was put into effect in July 1998, CMS has collected less than $3.5 million, and only 18 rewards totaling less than $16,000 have been paid. In contrast, a reward program under the Internal Revenue Code has caused the IRS to collect almost $1.6 billion (from 2007 to 2012) for which it paid rewards to informants totaling approximately $193 million.
Understandably, CMS believes that remodeling its IRP after the IRS program will encourage many more individuals to report Medicare fraud and increase returns to the Medicare fund.
Under the proposed IRP an informant could receive up to $10 million for reporting specific information that leads to the recoupment of an overpayment made by Medicare to a supplier or provider. The reward for information received on or after the effective date of the rule would be “15 percent of the final amounts collected applied to the first $66,000,000 for the sanctionable conduct.”
In order to qualify for a reward, an individual need not go the effort of commencing a qui tam action, as required under the False Claims Act. Rather, the informant need only provide specific information to OIG, CMS, or a CMS contractor relating to an individual or entity that has engaged in or is engaging in sanctionable fraud and abuse against the Medicare program and specifying the particular time period.
There are some limitations on the reward system. For example, CMS will not give a reward if the same or substantially similar information was the basis for payment of a reward under any other federal reward program. An informant who participated in the sanctionable conduct is ineligible. Before the informant may collect the reward, he or she must complete an attestation acknowledging that he or she has not participated in the conduct, is not otherwise ineligible to receive the reward, has furnished truthful information, and further acknowledging that failure to provide truthful information can subject the informant to potential criminal and civil liability.
The proposed rule also imposes broader Medicare enrollment requirements for providers who have existing unpaid Medicare debt. Under the current rule, an owner, physician, or nonphysician practitioner may be denied Medicare enrollment under a new name or entity if he or she has a Medicare debt. However, if the practitioner was an owner of another entity that had a Medicare debt, the practitioner could not be denied Medicare enrollment because the entity had a Medicare debt. Under the proposed rule, if the provider seeking enrollment was the owner of another provider or supplier that had a Medicare debt that existed when the latter’s enrollment was voluntarily or involuntarily terminated or revoked, Medicare enrollment may be denied if certain criteria are met.
Comments on CMS’s proposed rule must be received by June 28, 2013.