December 2010 Archives

December 23, 2010

OIG Reports a $25.9 billion Expected Recovery of Savings in FY 2010

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) reported $25.9 billion of expected recoveries and savings in fiscal year (FY) 2010.  The large amount is a combination of audit receivables, investigative receivables and other legislative and cost-saving actions that OIG recommended. 

In addition, the OIG's semiannual report documented that it initiated 647 criminal actions and 378 civil actions against individuals or entities that engaged in crimes against departmental programs.  These actions included lawsuits under the False Claims Act (FCA), the Civil Monetary Penalties Law (CMPL) settlement and other administrative recoveries related to self-disclosure. 

Finally, the report indicated the Health Care Fraud Prevention and Enforcement Action Team's (HEAT) success in fighting fraud.  That program alone recovered $71.3 million in investigative receivables.  

If you would like more information regarding compliance, please visit or contact a Wachler & Associates attorney at 248-544-0888.  

December 20, 2010

Medicare Physician Rate Cut Delayed for One Year

Last week President Obama signed legislation that will delay Medicare payment cuts for one more year.  The reduction in pay, 25 percent, had been scheduled to begin on January 1, 2011.  The American Medical Association strongly advocated for the delay that is longer than the previous five delays over the past year.  Over the upcoming year, Congress will work to develop a long-term solution to the Medicare physician payment problem. 

For more information on Medicare payments or the physician fee cut, please visit or contact a Wachler & Associates attorney at 248-544-0888. 

December 16, 2010

Federal District Court Holds That the Individual Mandate in PPACA is Unconstitutional

The U.S. District Court for the Eastern District of Virginia ruled that Section 1501 of the Patient Protection and Affordable Care Act (PPACA) is unconstitutional.  Shortly after PPACA was passed in March 2010, Virginia passed a state statute that conflicted with the individual mandate found in Section 1501 of PPACA which requires that by 2014 every United States citizen, with a few exceptions, must maintain a minimum level of health insurance coverage subject to penalty.  Following the passage of its state law, Virginia filed its lawsuit alleging that the individual mandate of PPACA violated the Commerce, Necessary and Proper and General Welfare Clauses of the United States Constitution.  The U.S. Department of Health and Human Services contended that the provision was Constitutional because individuals' decisions to not purchase health care insurance combine to have a collectively serious effect on interstate commerce.  Thus, the Commerce Clause and the Necessary and Proper Clause support the provision. 

In his opinion, Judge Henry E. Hudson of the U.S. District Court for the Eastern District of Virginia disagreed with the U.S. Department of Health and Human Services' analysis.  The court held that the individual mandate in PPACA violates the Commerce Clause because the provision "compels" an individual to engage in commerce.  Further, since the provision violates the Commerce Clause, the Necessary and Proper Clause does not protect the provision because that clause requires that legislation be in furtherance of Congress' constitutionally enumerated powers.  

For more information on health care reform and its impact on health care providers, please visit or contact a Wachler & Associates attorney at 248-544-0888.  

December 13, 2010

The Red Flag Program Clarification Act of 2010 Passes in the House and Senate

Last week, the House and Senate passed the "Red Flag Program Clarification Act of 2010."  The Act limits the definition of "creditor" to a person who obtains or uses consumer reports in connection with a credit transaction, furnishes information to consumer reporting agencies in connection with credit transactions, or advances funds based on the recipients' obligation to repay.  The bill excludes from the definition persons, such as health care providers, who "advance funds" by providing services before receiving payment.  Relevant government agencies, however, are permitted to designate creditors that will be subject to the Rule.  The Agencies will designate based upon the determination that the person manages accounts that are subject to a reasonably foreseeable risk of identity theft.  These designations must be made through agency rule making. 

The enforcement of the Red Flags rule has been delayed several times, with the most recent delay expiring on January 2011.  The FTC previously determined that health care providers met the definition of "creditor."  While the Clarification Act's revised definition would not include most health care providers, the FTC could still designate health care providers as "creditors" through the rule making process based on the risk of medical identity theft concerns previously voiced by the FTC. 

For more information on the Red Flags rule, please visit or contact a Wachler & Associates attorney at 248-544-0888. 

December 3, 2010

The Justice Department Announces $3 Billion Recovery from Pursuing False Claims Against the Federal Government

The United States Justice Department reported that in 2009 it collected $3 billion from pursuing health care fraud and other false claims against the federal government.  More than 80% of the recoveries were from healthcare fraud, including qui tam actions under the False Claims Act.  Bloomberg News reported that Tony West, Assistant Attorney General in charge of the Justice Department's civil division, stated that the Justice Department would hold those who violate the federal False Claims Act accountable, whether they are a corporation or individual.  The $3 billion recovery in 2009, the second largest in history, is evidence of the aggressive nature with which the DOJ is pursuing False Claims Act violations. 

False Claims Act violations can give rise from submission of claims for services not rendered, submission of claims for services that were not medically necessary or were improperly coded and billed.  Further, as a result of the health care reform legislation, False Claims liability can attach to the retention of a known overpayment that is not refunded within 60 days of identification.  For more on the False Claims Act, or for assistance with health care regulatory or billing matters, please visit or contact a Wachler & Associates attorney at 248-544-0888.