0
About Search
March-April 2011, Vol. 51, No. 2 >
Reviews
Pharmacy waste, fraud, and abuse in health care reform
Laura A. Carpenter, BPharm, JD, LLM; Zachary Edgar; Christopher Dang
J Am Pharm Assoc. 2011;51:e3-e16. doi:10.1331/JAPhA.2011.10168
Article
References
text A A A

Abstract

Objective  To describe the new Medicare and Medicaid waste, fraud, and abuse provisions of the Affordable Care Act (H.R. 3590) and Health Care and Education Affordability Reconciliation Act of 2010 (H.R. 4872), the preexisting law modified by H.R. 3590 and H.R. 4872, and applicable existing and proposed regulations.

Summary  Waste, fraud, and abuse are substantial threats to the efficiency of the health care system. To combat these activities, the Department of Health and Human Services and Centers for Medicare & Medicaid Services promulgate and enforce guidelines governing the proper assessment and billing for Medicare and Medicaid services. These guidelines have a number of provisions that can catch even well-intentioned providers off guard, resulting in substantial fines. H.R. 3590 and H.R. 4872 augment preexisting waste, fraud, and abuse laws and regulations. This article reviews the new waste, fraud, and abuse laws and regulations to apprise pharmacists of the substantial changes affecting their practice.

Conclusion  H.R. 3590 and H.R. 4872 modify screening requirements for providers; modify liability and penalties for the antikickback statute, federal False Claims Act, remuneration, and Stark Law; and create or extend auditing and management programs. Properly navigating these changes will be important in keeping pharmacies in compliance.

Sign In
APhA Members 
Welcome to JAPha.org! Please log in below using your APhA username and password. If you need to update your account information, please go to Pharmacists.org and login using your current credentials.
Username
Password


Forgot your password?
Not a Subscriber
New to JAPhA? Become an APhA member to receive a full subscription to both the print and online editions.

OR

Register for a FREE limited account to benefit from personalization features such as alerts.

References

1 +
 Department of Health and Human Services, Department of Justice.  Health Care Fraud and Abuse Control Program: annual report for FY 2001. Accessed at http://oig.hhs.gov/publications/docs/hcfac/HCFAC%20Annual%20Report%20FY%202001.htm, July 1,  2010.
 
2 +
 Department of Health and Human Services, Department of Justice.  Health Care Fraud and Abuse Control Program: annual report for FY 2002. Accessed at http://oig.hhs.gov/publications/docs/hcfac/HCFAC%20Annual%20Report%20FY%202002.htm, July 1,  2010.
 
3 +
 Department of Health and Human Services, Department of Justice.  Health Care Fraud and Abuse Control Program: annual report for FY 2006 at 8–9. Accessed at http://oig.hhs.gov/publications/docs/hcfac/hcfacreport2006.pdf, July 1,  2010.
 
4 +
 Department of Health and Human Services, Department of Justice.  Health Care Fraud and Abuse Control Program: annual report for FY 2008 at 15. Accessed at http://oig.hhs.gov/publications/docs/hcfac/hcfacreport2008.pdf, July 1,  2010.
 
5 +
 Department of Health and Human Services, Department of Justice.  Health Care Fraud and Abuse Control Program: annual report for FY 2009 at 15. Accessed at http://oig.hhs.gov/publications/docs/hcfac/hcfacreport2009.pdf, July 1,  2010.
 
6 +
 Department of Health and Human Services.  Health care reform: opportunities to address waste, fraud, and abuse. Accessed at www.hhs.gov/asl/testify/2009/06/t200906.25a.html, July 1,  2010.
 
7 +
 Department of Health and Human Services. Improper Medicare FFS Payments Report.  In: HHS's fiscal year 2009 agency financial report, November 2009, at 57. Accessed at www.hhs.gov/afr/2009sectii-financial.pdf, June 29,  2010.
 
8 +
Kauffman T. Justice, HHS join forces to tackle health care fraud. Accessed at www.federaltimes.com/article/20100617/AGENCY03/6170301, June 30,  2010.
 
9 +
H.R. 3590 (2010).
 
10 +
H.R. 4872 (2010).
 
11 +
 AARP Public Policy Institute.  Attacking waste, fraud, and abuse in health reform. Accessed at http://assets.aarp.org/rgcenter/ppi/health-care/fs186-fraud.pdf, June 29,  2010.
 
12 +
 42 U.S.C. § 1395i(k)(8)(A) ( 2010).
 
13 +
 Department of Health and Human Services.  Health care reform: opportunities to address waste, fraud and abuse. Accessed at www.oig.hhs.gov/testimony/docs/2009/06252009_testimony_health_reform.pdf, July 1,  2010.
 
14 +
 Id.
 
15 +
 42 U.S.C. § 1395ddd(h) (2010). Grizzle AM. ZPICs: Medicare and Medicaid billing practices under the microscope. Accessed at www.bassberry.com/files/upload/GrizzleHealthCareFraudReport_022410.pdf, July 1,  2010.
 
16 +
 42 U.S.C § 1395cc(j)(1)(A) (2010).
 
17 +
 Id. at § 1395cc(j)(2)(B).
 
18 +
 Id. at § 1395cc(j)(5)(A).
 
19 +
 Id. at §1395cc(j)(2)(D).
 
20 +
 31 U.S.C. § 3729 (2010).
 
21 +
Lahman LD. Bad mules: a primer on the Federal False Claims Act. Accessed at www.okbar.org/obj/articles_05/040905lahman.htm, June 30,  2010.
 
22 +
 31 USCS § 3729(a)(1)(A).
 
23 +
 Centers for Medicare & Medicaid Services.  Prescription drug benefit manual: chapter 9: Part D program to control fraud, waste and abuse, at 58. Accessed at www.cms.gov/PrescriptionDrugCovContra/Downloads/PDBManual_Chapter9_FWA.pdf, June 30,  2010.
 
24 +
 42 U.S.C. § 1320a-7a(a) ( 2010).
 
25 +
 Id. at § 1320a-7a(a),(8),(9),(12).
 
26 +
 H.R. 3590 § 6402(a).
 
27 +
 42 U.S.C. § 1320a-7b ( 2010).
 
28 +
 H.R. 3590 § 6402(f).
 
29 +
 42 U.S.C § 1320a-7b(b)(1)–(2).
 
30 +
 Id.
 
31 +
 Balanced Budget Act of 1997, Pub. L. no. 105-33, title V, § 4301, 11 Stat. 251 (1997).
 
32 +
Sheehan JG, Goldner JA. Beyond the anti-kickback statute: new entities, new theories in healthcare fraud prosecutions. Accessed at http://publish.healthlawyers.org/Publications/Journal/Documents/Vol%2040%20Issue%202/Beyond%20The%20Anti-Kickback%20Statute-%20New%20Entities,%20New%20Theories%20In%20Healthcare%20Fraud%20Prosecution.pdf, July 20,  2010.
 
33 +
 Id.
 
34 +
 United States v. Greber, 760 F.2d 68 (3d. Cir. 1985).
 
35 +
 United States v. Perlstein, 632 F.2d 611 (1980).
 
36 +
 Department of Health and Human Services, Department of Justice.  Health Care Fraud and Abuse Control Program: annual report for FY 2002. Accessed at http://oig.hhs.gov/publications/docs/hcfac/HCFAC%20Annual%20Report%20FY%202002.htm, July 1,  2010.
 
37 +
 Balanced Budget Act of 1997, Pub. L. no. 105-33, 111 Stat. 251 (1997).
 
38 +
Sheehan JG, Goldner JA. Beyond the anti-kickback statute: new entities, new theories in healthcare fraud prosecutions. Accessed at http://publish.healthlawyers.org/Publications/Journal/Documents/Vol%2040%20Issue%202/Beyond%20The%20Anti-Kickback%20Statute-%20New%20Entities,%20New%20Theories%20In%20Healthcare%20Fraud%20Prosecution.pdf, July 20,  2010.
 
39 +
 42 C.F.R. § 1001.952 ( 2010).
 
40 +
 Id. at § 1001.952(d).
 
41 +
 Id.
 
42 +
 Centers for Medicare & Medicaid Services.  Medicare fraud & abuse, at 2. Accessed at www.cms.gov/MLNProducts/downloads/Fraud_and_Abuse.pdf, June 29,  2010.
 
43 +
 42 U.S.C. § 1320a-7a(a)(12).
 
44 +
 42 U.S.C. § 1320a-7b(g).
 
45 +
Baim EM, Bulliet TN, Dunst IP, et al.  Transparency requirements, healthcare fraud and abuse law changes, and program integrity provisions enacted as part of health reform legislation. Accessed at www.healthlawyers.org/News/Health%20Lawyers%20Weekly/Pages/2010/April%202010/April%2002%202010/TransparencyRequirements,HealthcareFraudAdAbuseLawChanges,AndProgramIntegrityProvisionsEnactedAsPartOfHealthReformLegislati.aspx, June 29,  2010.
 
46 +
 42 U.S.C. § 1320a-7b(h).
 
47 +
Hanlester Network v. Shalala,  51 F.3d 1390 at 1400 (9th. Cir. 1995).
 
48 +
 42 U.S.C. § 1320a-7b(h).
 
49 +
McDermott K, Pawlitz K, Scestopol TB, et al.  Healthcare reform legislation: healthcare fraud and abuse and program integrity provisions. Accessed at www.healthlawyers.org/Members/PracticeGroups/FA/EmailAlerts/Pages/HCRLegFAProvisions.aspx, June 29,  2010.
 
50 +
 42 U.S.C. § 1320a-7b(g).
 
51 +
 42 U.S.C. § 1320a-7a(i)(6)(A)–(I).
 
52 +
 Id. at § 1320a-7a(a)(5).
 
53 +
National Association of Chain Drug Stores.  NACDS coupons, rewards programs, and beneficiary inducements, at 1.  Alexandria, VA:  National Association of Chain Drug Stores;  2010.
 
54 +
 42 U.S.C. § 1320a-7a(a)(12).
 
55 +
 Id. at § 1320a-7a(i)(6).
 
56 +
 Id. at § 1320a-7a(i)(6)(A).
 
57 +
 67 Fed. Reg. at 55855.
 
58 +
National Association of Chain Drug Stores.  NACDS coupons, rewards programs, and beneficiary inducements, at 2.  Alexandria, VA:  National Association of Chain Drug Stores; 2010.
 
59 +
 Id.
 
60 +
 42 U.S.C. § 1320a-7a(i)(6)(F).
 
61 +
 Id. at § 1320a-7a(i)(6)(G).
 
62 +
 Id. at § 1320a-7a(i)(6)(H).
 
63 +
 Id. at § 1320a-7a(i)(6)(I).
 
64 +
 Id. at § 1320a-7a(i)(6)(F).
 
65 +
 Id. at § 1320a-7a(i)(6)(G).
 
66 +
National Association of Chain Drug Stores.  NACDS coupons, rewards programs, and beneficiary inducements, at 3.  Alexandria, VA:  National Association of Chain Drug Stores;  2010.
 
67 +
 42 U.S.C. § 1395nn ( 2010).
 
68 +
 Id. at § 1395nn(a)(1).
 
69 +
 Id. at § 1395nn(a)(2)(A), (c)(1), and (d).
 
70 +
 Id. at § 1395nn(a)(2)(B) and (h)(1).
 
71 +
 Id. at § 1395nn(h)(1)(C).
 
72 +
MGMA.  Stark Compliance Plus: history of the Stark Law. Accessed at www.starkcompliance.com/index.aspx?id=268, July 15,  2010.
 
73 +
 Id.
 
74 +
 Id.
 
75 +
 42 U.S.C. § 1395nn(h)(6).
 
76 +
 Id.
 
77 +
 Id. at §1395nn(g)(3),(4).
 
78 +
 Id.
 
79 +
Kass JE, Rice C.  Health law handbook: the Stark Law: when does retention of funds due to a stark violation lead to liability under the False Claims Act? Eagan, MN:  West;  2010.
 
80 +
 63 Fed. Reg. 58399 ( 1998).
 
81 +
 Department of Health and Human Services.  An open letter to health care providers: April 24, 2006. Accessed at http://oig.hhs.gov/fraud/docs/openletters/Open%20Letter%20to%20Providers%202006.pdf, July 16,  2010.
 
82 +
 Department of Health and Human Services.  An open letter to health care providers: March 24, 2009. Accessed at http://oig.hhs.gov/fraud/docs/openletters/OpenLetter3-24-09.pdf, July 16,  2010.
 
83 +
 Id.
 
84 +
 H.R. 3590 § 6409.
 
85 +
 Id. at § 6409(a)(1).
 
86 +
 Id. at § 6402(b).
 
87 +
 Centers for Medicare & Medicaid Services.  The Medicare Recovery Audit Contractor (RAC) program: an evaluation of the 3-year demonstration, at 9. Accessed at www.cms.gov/RAC/Downloads/RACEvaluationReport.pdf, July 14,  2010.
 
88 +
 Id. at 1.
 
89 +
 Id. at 9.
 
90 +
 Government Accountability Office.  Medicare recovery audit contracting, at 1. Accessed at www.gao.gov/new.items/d10143.pdf, July 14,  2010.
 
91 +
 Medicare Modernization Act of 2003,  Pub. L. no. 108-173 ( 2003).
 
92 +
 Centers for Medicare & Medicaid Services.  The Medicare Recovery Audit Contractor (RAC) program: an evaluation of the 3-year demonstration, at 7. Accessed at www.cms.gov/RAC/Downloads/RACEvaluationReport.pdf, July 14,  2010.
 
93 +
 Id. at 11.
 
94 +
 Id.
 
95 +
 Id.
 
96 +
 Tax Relief and Health Care Act of 2006 (TRHCA),  Pub. L. no. 109-432, 120 Stat. 2922 ( 2006).
 
97 +
 Medicare Recovery Audit Contractor (RAC) Program: An Evaluation of the 3-Year Demonstration (June 2008), p. 7. Accessed at www.cms.gov/RAC/Downloads/RACEvaluationReport.pdf, July 14,  2010.
 
98 +
 Id. at 11.
 
99 +
 Centers for Medicare & Medicaid Services.  The Medicare Recovery Audit Contractor (RAC) program: an evaluation of the 3-year demonstration, at 1. Accessed at www.cms.gov/RAC/Downloads/DemoAppealsUpdate61410.pdf, July 14,  2010.
 
100 +
 Id. at 2.
 
101 +
 Id. at 20.
 
102 +
 Id.
 
103 +
 Federal Business Opportunities.  Recovery Audit Contractor (RAC). Accessed at www.fbo.gov/index?s=opportunity&mode=form&id=5c8c7d4b00249ba579d4d77d64bd0aea&tab=core&_cview=1&cck=1&au=&ck=, July 14,  2010.
 
104 +
 Government Accountability Office.  Medicare recovery audit contracting, at 10. Accessed at www.gao.gov/new.items/d10143.pdf, July 14,  2010.
 
105 +
Centers for Medicare & Medicaid Services.  Statement of work for the Recovery Audit Contractor Program, J-1 RAC SOW: amendment 1, at 18. Accessed at www.cms.gov/RAC/downloads/Final%20RAC%20SOW.pdf, July 15,  2010.
 
106 +
 Government Accountability Office.  Medicare recovery audit contracting, at 10. Accessed at www.gao.gov/new.items/d10143.pdf, July 14,  2010.
 
107 +
Centers for Medicare & Medicaid Services.  Statement of work for the Recovery Audit Contractor Program, J-1 RAC SOW: amendment 1, at 18. Accessed at www.cms.gov/RAC/downloads/Final%20RAC%20SOW.pdf, July 15,  2010.
 
108 +
 Id.
 
109 +
 Id. at 9.
 
110 +
 Id.
 
111 +
 Government Accountability Office.  Medicare recovery audit contracting, at 40. Accessed at www.gao.gov/new.items/d10143.pdf, July 14,  2010.
 
112 +
 Centers for Medicare & Medicaid Services.  RAC medical record request limits, at 1. Accessed at www.cms.gov/RAC/Downloads/RAC%20Medical%20Record%20Request%20Limits.pdf, July 15,  2010.
 
113 +
 42 U.S.C. § 1396a(a)(42) ( 2010).
 
114 +
 42 U.S.C. § 1395ddd(h)(3) ( 2010).
 
115 +
 Id. at § 1395ddd(h)(9).
 
116 +
Grizzle AM.  ZPICs: Medicare and Medicaid billing practices under the microscope. Accessed at www.bassberry.com/files/upload/GrizzleHealthCareFraudReport_022410.pdf, July 1,  2010.
 
117 +
 Id.
 
118 +
Bass, Berry, Sims PLC. Health law update: ZPICs: the new kids on the Medicare audit block, at 2. Accessed at www.bassberry.com/files/Publication/d6df2eb5-6047-415c-af78-0298c8ff65f3/Presentation/PublicationAttachment/67be0c3f-0432-4634-aaae-03153c6eed18/HealthLawUpdate25022010.pdf, July 15,  2010.
 
119 +
 Centers for Medicare & Medicaid Services.  CMS integrity manual chapter 4: benefit integrity, page 11. Accessed at www.cms.gov/manuals/downloads/pim83c04.pdf, July 15,  2010.
 
120 +
 Id.
 
121 +
 Id. at 10.
 
122 +
Bass, Berry, Sims PLC.  Health law update: ZPICs: the new kids on the Medicare audit block, p. 3. Accessed at www.bassberry.com/files/Publication/d6df2eb5-6047-415c-af78-0298c8ff65f3/Presentation/PublicationAttachment/67be0c3f-0432-4634-aaae-03153c6eed18/HealthLawUpdate25022010.pdf, July 15,  2010.
 
123 +
 Id. at 5.
 
124 +
Medicare Prescription Drug,  Improvement, and Modernization Act of 2003,  Pub. L. no. 108-173 ( 2003).
 
125 +
42 U.S.C. § 1395w-104(c) (2010);  Centers for Medicare & Medicaid Services. Medicare Part D medication therapy management (MTM) programs: 2010 fact sheet 1. Accessed at: www.cms.hhs.gov/PrescriptionDrugCovContra/Downloads/MTMFactSheet.pdf, July 21,  2010.
 
126 +
 42 U.S.C. § 1395w-104(c)(2)(A)(i).
 
127 +
 Id. at § 1395w-104(c)(2)(B).
 
128 +
 42 C.F.R. 423.153(c)(2) ( 2010).
 
129 +
 Id. at 423.153(d)(3).
 
130 +
 Id. at 423.153(d)(2)(i).
 
131 +
Centers for Medicare & Medicaid Services.  Medicare Part D medication therapy management (MTM) programs: 2010 fact sheet 2. Accessed at: www.cms.hhs.gov/PrescriptionDrugCovContra/Downloads/MTMFactSheet.pdf, July 21,  2010.
 
132 +
 42 C.F.R. 423.153(d)(2)(ii).
 
133 +
 42 C.F.R. § 423.153(d)(2)(iii).
 
134 +
 Id.; 42 C.F.R. § 423.104(d)(3)(iv).
 
135 +
 HR 3590 § 3503(a) and (c).
 
136 +
 Id.
 
137 +
 Id. § 3503(d).
 
138 +
 42 U.S.C. § 1395w-104(c)(2)(C).
 
139 +
 Id. at § 1395w-104(c)(3).
 
140 +
 Id.
 
141 +
 Id.
 
NOTE:
Citing articles are presented as examples only. In non-demo SCM6 implementation, integration with CrossRef’s “Cited By” API will populate this tab (http://www.crossref.org/citedby.html).
Compression-Only CPR: Pushing the Science Forward
Cone
AAM 2010;304:1493-1495.
All you need to read in the other general jounals
BMJ 2010;341:c5893-c1494.
Please read the other comments before you post yours. Comments are moderated and will appear on the site at the discertion of the editorial staff.
* = Required Field
(if multiple authors, separate names by comma)
Example: John Doe



Comments

Submit a Comment

Related Content

Customize your page view by dragging & repositioning the boxes below.

JAPhA Articles
[+] View More
Topic Collections
Health Care Financing
PubMed Articles
The ACA's new weapons against health care fraud.
The New England journal of medicine: Issue date- 2010 Jul 22
Smart health care reform.
CMAJ : Canadian Medical Association journal = journal de l'Association medicale canadienne: Issue date- 2010 Apr 20
View all results at View More
Advertisement
 
  • Print
  • PDF Download
  • Email
  • Share
  • Get Citation
  • Submit Comment
  • Article Alerts
    Please Wait... Processing your request... Please Wait.
    You must sign in to sign-up for alerts.

    Please confirm that your email address is correct, so you can successfully receive this alert.

  • Letters To Editor
  • Reprints
Copyright © American Pharmacists Association
All rights reserved.
Powered by: Silverchair Information / Systems
© 2011 Silverchair. All Rights Reserved.   ---