Medicare Compliance & Reimbursement

Medicaid rebates were at the center of the biggest health care fraud settlement over the last six months, the HHS Office of Inspector General says in its latest Semiannual Report. In the document, a biannual compendium of the agency's activities, the OIG gives prominent place to the $49 million False Claims Act settlement finalized last year with drug giant Pfizer Inc. The settlement resolved allegations that "educational grants" Parke-Davis (acquired by Pfizer in 2000) made to a health plan amounted to discounts that should have been reported to the government and calculated into the company's Medicaid rebates. The resolution highlights the fact that Medicaid rebates - not just average wholesale price pitfalls - are a major compliance hot button for drugmakers. In the report, the OIG also tallied its fraud-fighting stats for the first six months of its fiscal year. Among the results: 1,241 exclusions from federal health care programs - an average rate of about 200 per month, 320 convictions for health care fraud related misdeeds, 106 new civil actions, and $187 million collected from provider targeted in fraud investigations. Heads up, hospitals: In a second document - the 2003 Red Book, which compiles OIG cost-saving recommendations that haven't yet been implemented - the watchdog agency zeros in on hospital outpatient department services. Its highest-stakes recommendation - worth $1.1 billion a year - is to change Medicare reimbursement rules to equalize payments for outpatient services provided in hospital outpatient departments with those provided in ambulatory surgical centers. Such a move could take a significant bite out of hospitals' outpatient revenue. Lesson Learned: With providers being excluded at such a rapid clip, health care organizations should be sure to do background checks on their employees to ensure that they don't employ excluded individuals to care for Medicare or Medicaid patients. To see the semiannual report, go to http://oig.hhs.gov/publications/docs/semiannual/2003/03SpringSemi.pdf. To see the Red Book, go to http://oig.hhs.gov/publications/docs/redbook/2003 RedBook.pdf.