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Rep. McDermott Introduces Legislation to Address Waste, Fraud and Abuse in Health Care System September 14, 2009  Demonstrating that health care reform can be a win-win for government and industry, Rep. Jim McDermott today introduced legislation today (HR 3556) to provide the crucial missing piece, a mechanism, for health care providers and suppliers to disclose actual and potential violations of the physician self-referral law (also known as the Stark Law). “This legislation can recover millions of dollars every year from what is now waste, fraud and abuse,” McDermott said, adding, “Every dollar recovered will help pay for health care reform.” For over a decade, the Office of the Inspector General for the U.S. Department of Health and Human Services (“OIG”) has maintained a self-disclosure protocol (“SDP”) that allows health care providers and suppliers to self-disclose actual and potential violations of various health care laws and regulations. The SDP encouraged providers and suppliers to come to the government with potential violations of laws and regulations. A penalty—often in the form of settlements and fines—was still imposed by the government, but the process allowed providers and suppliers to proactively report these violations to governmental authorities. Through the SDP, well over one hundred million dollars has been recovered. However, in March 2009, citing a lack of resources, the OIG announced it would no longer allow providers and suppliers to self-disclose, but would instead focus on the anti-kickback statute, which is criminal in nature. OIG explained its action in a written communication: “To more effectively fulfill our mission and allocate our resources, we are narrowing the SDP’s scope regarding the physician self-referral law. OIG will no longer accept disclosure of a matter that involves only liability under the physician self-referral law in the absence of a colorable anti-kickback statute violation. We will continue to accept providers into the SDP when the disclosed conduct involves colorable violations of the anti-kickback statute, whether or not it also involves colorable violations of the physician self-referral law. Although we are narrowing the scope of the SDP for resources purposes, we urge providers not to draw any inferences about the Government’s approach to enforcement of the physician self-referral law.” Without a way to report actual or potential physician self-referral violations, waste, fraud and abuse go unchecked, and millions of dollars in revenue is needlessly lost. McDermott, a medical doctor and senior Member of the House Ways and Means Committee, recognizes that controlling costs is fundamental to the president’s program of reforming health care in America, and this legislation will help accomplish the president’s goal. “Every year there are thousands of violations that unfairly spend millions of taxpayer dollars and the president is absolutely right in saying health care reform must include a focus on waste, fraud and abuse and my bill does just that,” McDermott said. McDermott’s legislation, HR 3556, vests CMS, the Centers for Medicare and Medicaid Services, with a key leadership role in the process, while still involving OIG when violations might be criminal in nature. According to McDermott, CMS has the expertise and available resources to effectively lead the effort and the credibility in the health care field to encourage providers and suppliers to step forward. Because of the significant cost recovery involved, CBO is scoring McDermott’s legislation and the projected savings is expected to be known in the near future. McDermott is confident that CBO will find dramatic savings as a result of his bill. McDermott pointed out that in the complex health care system that exists in America today, administrative mistakes can be made by providers and suppliers that are unintended. For instance, there may be situations in which a contract between a hospital and a referring physician is at fair-market value, but one party forgot to sign the contract, though both parties abide by the terms of the agreement. McDermott believes there should be a way for these mistakes to be corrected and money recovered, where appropriate. A copy of the legislation is attached.
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