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Volume XV Number 7 - July 18, 2006

CMS UNVEILS COMPREHENSIVE PROGRAM TO COMBAT MEDICAID FRAUD AND ABUSE

The Centers for Medicare & Medicaid Services (CMS) has announced initiation of the Medicaid Integrity Program (MIP), an unprecedented effort to detect and prevent Medicaid fraud and abuse. The Medicaid program provides health coverage for 55 million Americans with expenditures expected to exceed $300 billion in fiscal year 2006. MIP will be funded with $5 million in 2007, increasing to $75 million by 2009 and each year thereafter. The funds will be used to pay contractors to review the actions of those seeking payment from Medicaid, conduct audits, identify overpayments, and educate providers and others on program integrity and quality of care. At least 100 full-time federal employees will be devoted to the project, along with state Medicaid officials. At the state level, the New Jersey False Health Claims Act has been introduced, providing for penalties of $5,500 to $11,000 for each false claim against a New Jersey health assistance program, plus treble damages.

HORIZON BC/BS ANNOUNCES RECORD FRAUD RECOVERIES

Horizon Blue Cross Blue Shield of NJ recovered a record $15.5 million from claimed fraudulent activity in 2005. Horizon’s special investigative unit investigated 760 cases of suspected fraud, referring about one-half to law enforcement. Two-thirds of the cases were detected by Horizon employees or through calls to Horizon’s anti-fraud hotline.

DEPT OF BANKING & INSURANCE ISSUES DIRECTIONS ON HEALTH

CLAIMS AUTHORIZATION, PROCESSING & PAYMENT ACT NJ’s Health Claims Authorization, Processing & Payment Act (the Act) became effective on July 11, 2006, but the Department of Banking & Insurance (DOBI) has yet to issue rules to implement its provisions, including certain rights of health care providers related to claims handling and claims payment and utilization management appeals. DOBI has issued a notice at its website: www.state.nj.us/dobi/352implementnotice.html to direct carriers and providers on how to comply with the Act. Providers should access the site to download required patient consent and records release authorization forms, as well as the application to appeal a claims determination. The Act applies to services rendered on or after July 11, 2006 or for which a prior authorization request was submitted on or after that date.

JUSTICE DEPARTMENT PROSECUTES PHYSICIAN FOR ILLEGAL IMPORTATION OF NON-FDA APPROVED MEDICAL DEVICES

The U.S. Department of Justice, working with agents from the FDA and U.S. Customs & Border Protection, has obtained guilty pleas from a Michigan physician and his corporation providing office-based dermatological surgery and care, hair transplantation, and varicose vein treatment. The defendants were charged with unlawfully importing Restylane and Perlane to the U.S., through Canada, and administering them to patients prior to the date the devices were approved by the FDA in 2003 and 2004. The guilty plea by the corporation carries a maximum sentence of a $500,000 fine; the individual plea carries a maximum sentence of one year imprisonment and/or a $100,000 fine. The corporation agreed to forfeit over $400,000 to the US government. In New Jersey, the Attorney General is prosecuting several persons who performed procedures and services at a medi-spa for violating numerous state licensing and consumer protection laws.

STATLAW AVAILABLE BY EMAIL:

Kern Augustine is pleased to announce that Statlaw is now available by email. If you would prefer to receive Statlaw by email, please email that request to bczemeris@drlaw.com.

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