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STATEN ISLAND UNIVERSITY HOSPITAL AGREES TO PRECEDENT SETTING FRAUD SETTLEMENT

Staten Island University Hospital has agreed to return $76.5 million that prosecutors say it fraudulently billed New York State's Medicaid program over the last several years. The agreement represents the largest cash settlement with a health care provider in the program's history. It is, however, the second time in seven years that the hospital has been fined for improperly billing Medicaid. Indeed, in September 1999, it agreed to both repay New York State $45 million and provide $39 million in free care to Medicaid patients, for bills it had improperly submitted in a totally separate scheme. According to a complaint against the hospital filed by New York State Attorney General Elliot Spitzer, it is alleged that as the September 1999 settlement was being negotiated, the hospital's executives embarked upon on a new plan to profit illegally from Medicaid by overbilling it for services performed at 500 part-time clinics operated by the hospital through CHAPS Community Health Services, Inc. (“CHAPS”). It is also claimed that the hospital lied on financial reports filed by it with the state for the purpose of falsely inflating the rate it was to be paid for services performed at the CHAPS clinics. According to the Attorney General, hospital executives and lawyers repeatedly lied to State Department of Health regulators and investigators from his Medicaid Fraud Control Unit in order to cover up the scheme.

NATIONAL PROVIDER IDENTIFIERS CAN NOW BE OBTAINED

The Center for Medicare & Medicaid Services (“CMS”) recently initiated the National Provider Identifier (“NPI”) program, which provides for a new, permanent and single standard identifier that is unique to each health care provider. Mandated by the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), the NPI will now replace the various identifiers assigned to a single provider by different health plans (such as UPIN’s) and should simplify certain aspects of electronic billing. The May 6, 2005 CMS bulletin informs providers about the NPI itself, describes several ways to obtain one and provides guidance concerning how to use the new identifier. The announcement has been posted on the CMS website and may be viewed at http://www.cms.hhs.gov/hipaa/hipaa2/npi-provider.asp .

ILLINOIS LEGISLATURE APPROVES TORT REFORM

Ending two years of political gridlock, Illinois lawmakers moved to help lower medical malpractice insurance rates by approving legislation that limits lawsuit awards and strengthens the state’s oversight of both insurers and physicians. The centerpiece of the plan is the cap on non-economic damages for items such as pain and suffering. The measure calls for a $500,000 limit when the defendants are individual physicians and a $1 million limit when hospitals are named as defendants. The measure also gives state regulators more power to review and change malpractice rates, investigate complaints and punish those who have committed professional misconduct.

NEW FEATURE: “RISK MANAGEMENT INSIGHTS”

Every physician should periodically review their NYDOH Physician Profile, National Practitioner Data Bank and hospital medical staff files to ensure that the data (increasingly accessed and relied upon by the public, government agencies and health plans) is accurate, up to date and as “pro-physician” as possible.

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