Saturday, December 10, 2005

The Nuclear Option for Healthcare Fraud

The Office of the Inspector General (OIG) of the Department of Health and Human Services has proposed what is, in effect, the nuclear option by issuing a notice that it will seek to bar a hospital from participating in all federal health care programs, most importantly medicare and medicaid.  Such an exclusion would effectively put the hospital out of business, and this is the first time the OIG has proposed such a sanction against a hospital.  The civil charges involve South Shore Hospital and Medical Center in Miami (now called South Beach Community Hospital), which settled a False Claims Act case in 2002 by paying over $900,000 and agreeing to a Corporate Integrity Agreement (CIA) that it is now accused of violating.  According to the OIG press release (here):

South Shore repeatedly failed to timely submit complete and accurate implementation and annual reports, and failed to implement all of the Independent Review Organization requirements of the CIA, which called for particular types of cost reporting reviews and engagement procedures. South Shore also failed to notify OIG, as required, of its sale to new owners, who are also subject to the terms of the CIA.

The hospital has 30 days to respond to the OIG notice, and according to a story in the Miami Herald (here) management was taken by surprise by the government's proposed action and will seek to resolve the problem.  While the hospital has a troubled history, including a bond default, the OIG may be using the case to send a message to hospitals nationwide that it will take recidivism more seriously as it tries to combat healthcare fraud. (ph -- thanks to Delia Johnson for passing along the information)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2005/12/the_nuclear_opt.html

Civil Enforcement, Fraud | Permalink

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