AHA: Hospital mistakes aren't fraud

There's a difference between an honest mistake and fraud. That's the message the American Hospital Association (AHA) had for the Senate Finance Committee yesterday.

Responding to the senate's request for recommendations on how to better fight Medicare and Medicaid fraud, the trade organization that represents more than 5,000 hospitals said payment rules are "highly complex"--and getting even more complicated--and mistakes are bound to happen.

"America's hospitals take seriously their obligation to properly bill for the services they provide to Medicare and Medicaid beneficiaries," AHA Executive Vice President Rick Pollack said in a letter from AHA to the committee. "Every day, hospital staff strive to comply in good faith with a complex and continually changing legal and regulatory environment affecting payment."

In addition to regulatory complexity, AHA noted because of the sheer volume of claims hospitals submit, errors happen on both sides--hospitals and the government.

"Predictably, mistakes are made by hospital staff, the Centers for Medicare & Medicaid Services and program contractors alike."

The government has been vocal on its hard-line stance against fraud, waste and abuse. The departments in fiscal year 2011 recovered $2.4 billion in civil healthcare fraud cases under the False Claims Act, including hospitals and other providers committing Medicare fraud, self-referrals and kickbacks. And the Office of Inspector General expects $1.2 billion in recoveries, including $748 million from investigations and $483 million from audits, in the first half of fiscal 2012.

"[M]istakes are not fraud," Pollack said, "and the powerful weapon of the False Claims Act should not be wielded in a misguided attempt to correct or prevent mistakes."

False Claims sanctions can exceed more than a million dollars for hospitals and threatens their eligibility for Medicare and Medicaid participation and, therefore, reimbursement.

In addition to financial costs, hospitals accused of fraud also face costs to their reputation.

"A label of fraud is really not accurate and can discredit the institution in the community," Northern Metropolitan Hospital Association President and CEO Kevin Dahill told the Journal News in April. "Hospitals participate in these audits and agree to the findings. If they make mistakes, they correct them. That's not fraud," he said.

AHA recommended eliminating duplicative efforts in program integrity oversight, limiting the decisions of governmental auditors and the U.S. Department of Justice that may affect treatment decisions, and improving the process for hospitals to return erroneous overpayments.

For more information:
- read the AHA News Now brief
- see the letter (.pdf)

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