Medical Device Daily Washington Editor

The all-out assault on healthcare fraud continues apace as indicated by the June 26 announcement by the Department of Health and Human Services for a series of indictments obtained against eight individuals operating in Miami. According to the announcement, the Medicare Fraud Strike Force, a joint effort between the Department of Justice and HHS, arrested for healthcare fraud the owners of two companies in the Miami area purported to offer home healthcare services. The charges of the officials of the two companies also include conspiracy to commit healthcare fraud and conspiracy to launder healthcare fraud proceeds.

The arrest of officials with ABC Home Healthcare and Florida Home Health Care Providers (both Miami) involved billings of roughly $22 million, $15 million of which had been paid by the Centers for Medicare & Medicaid Services. Acting U.S. attorney Jeffrey Sloman said in the statement that the coordinated effort "delivers an effective one-two punch to healthcare fraudsters; they not only were caught and criminally charged, but they are also being stripped of their illegal proceeds." Sloman's remarks are in reference to a temporary restraining order slapped on the assets of the indicted, a list that includes four companies not named in the HHS statement.

The HHS statement indicates that each charge of healthcare fraud carries a potential 10-year prison term and that the conspiracy and money-laundering charges likewise could result in a decade behind bars. Assistant attorney general Lanny Bruer said in the statement, "through real-time data analysis, the [Medicare Fraud] Strike Force is at the forefront of stopping healthcare fraudsters in their tracks."

HHS also reported last week the indictment of more than 50 individuals in connection with Medicare fraud in the Detroit area. That action is said to be connected with a series of fraudulent activities that totaled roughly $50 million and snared individuals located in Denver and Miami (Medical Device Daily, June 25, 2009).

MedPAC as agency hitting headwinds

Congress's inability to craft healthcare policy that works in the real world as well as it does in the vacuum of policythink led to the formation of the Medicare Payment Advisory Commission in the Balanced Budget Act of 1997, and the continued difficulty encountered in Washington has recently led to the proposal that MedPAC's recommendations regarding provider reimbursement be made the standing practice at the Centers for Medicare & Medicaid Services, with the exception of instances in which Congress overrides those recommendations.

Sen. Jay Rockefeller (D-West Virginia) penned the Medicare Payment Advisory Commission Reform Act of 2009, which would convert MedPAC into an agency of the executive branch with policymaking power. Rockefeller, according to Thomas.gov, introduced the bill to the Senate Finance Committee on May 20, but the bill, indexed as S. 1110, has gone no farther.

The bill, which would rename MedPAC the Medicare Payment and Access Commission, has won a fan in the White House. President Obama has indicated a willingness to consider elements of the bill, which is called the MedPAC Reform Act of 2009.

In a June 2 letter to Finance Committee chairman Max Baucus (D-Montana) and Sen. Ted Kennedy (D-Massachusetts), who chairs the Senate Health, Education, Labor and Pensions Committee, Obama said he is "open to ideas about giving special consideration to the recommendations of MedPAC." Obama added that he is amenable to an arrangement whereby "MedPAC's recommendations on cost reductions would be adopted unless opposed by a joint resolution of the Congress," a process he characterized as "similar to a process that has been used effectively by a commission charged with closing military bases." Obama also said that such a mechanism "could be a valuable tool to help achieve health care reform in a fiscally responsible way."

However, at least one MedPAC member thinks that such a move would be a blunder. According to Congressional Quarterly, this "MedPAC-on-steroids" arrangement, would be a "terrible mistake" in the view of current MedPAC member and former MedPAC vice chairman Robert Reischauer. The former chief of the Congressional Budget Office said one of the problems is that pressure from Congress would arise the moment any such recommendations went into force. "As soon as you have somebody make these kinds of decisions, inevitably it will be subject to these kinds of pressures," he is reported to have said.

Reischauer is also reported to have told CQ of Congress that "it's not surprising they might think about a scenario in which Congress doesn't have to be responsible for politically difficult Medicare and Medicaid cuts," but he also stressed that he does not necessarily speak for any of the commission's 16 other members.

Rockefeller's bill would likely have to find its way into the Finance Committee's healthcare reform bill if it is to have any chance of passage.