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Program Integrity and Fraud Abuse

Together, the Centers for Medicare and Medicaid Services (CMS), the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS), and the Department of Justice (DOJ), are responsible for the implementation and enforcement of program integrity laws. These laws include the:

  • Physician Self-Referral Law (Stark Law)
  • Medicare anti-kickback Statute (AKS)
  • False Claims Act (FCA)
  • Exclusion Authorities
  • Civil Monetary Penalty Law (CMP)

Hospitals operate under compliance programs that seek to ensure they work within the parameters of these laws.  However, while these laws primarily have been enacted to address wrongdoing, their breadth may impact the honest business practices of providers due to ambiguities in the laws and regulations.

Because hospitals regularly engage in business operations and arrangements that may implicate these program integrity laws, it is critical that hospitals stay informed about the application of these laws. Violations of the laws could result in criminal penalties, civil fines, exclusion from federal health care programs, or loss of a hospital’s Medicare provider agreement.

The FAH advocates on behalf of investor-owned hospitals to ensure bright lines when possible, and to mitigate burdensome or unnecessary technical enforcement interpretations of these laws. We also seek to ensure that the focus of these laws is educational, rather than unnecessarily punitive, and that any potential penalties are structured to reflect inadvertent technical violations. Recent, key FAH advocacy efforts in this regard include:

  • Prohibit self-referral to physician-owned specialty hospitals, which increase costs to the Medicare program and shift risk and costs to community hospitals;
  • Replace the current piecemeal approach to bundled payment program fraud and abuse waivers with a single, overarching “Bundled Payment Waiver” of the Stark Law and AKS, applicable to all gainsharing arrangements under a CMS-led bundled payment program. 
  • Improve the Stark Law, for example, by establishing that clear assent between the parties meets the signature requirement, removing the current limitation on the number of times a hospital may use the late signature rule; and removing the Stark Law commercially reasonable standard, with the more objective and understandable standards of fair market value and volume or value or referrals remaining.  
  • Streamline and simplify penalty structure for technical non-compliance with the Stark Law; and
  • Develop a streamlined and simplified Self-Referral Disclosure Protocol (SRDP).

FAH will continue to work with our members and health care partners toward achieving these goals.