FRAUD: Investigators Focus On Undertreatment By HMOs
In the past, federal investigators targeting fraud and abuse in the health care system focused almost exclusively on "overbilling and overuse of services in fee-for-service arrangements." But the current issue of Hospitals & Health Networks reports there is a growing trend under which "creative federal and state prosecutors are hunting for providers and plans that undertreat managed care patients." The magazine reports that "[t]wo providers already have agreed to large settlements, and more cases are expected to be filed in the next six months." Under the Health Insurance Portability and Accessibility Act of 1996 and new Clinton administration anti-fraud initiatives, funds will be diverted to such enforcement efforts on an unprecedented scale. "It also will be aided by growing federal and state moves to define the rights of consumers in managed care plans" and by the growing numbers of Medicare and Medicaid recipients enrolling in managed care plans. James Sheehan, an assistant U.S. attorney in Philadelphia, said, "We're looking at a volume of complaints about managed care, trying to figure out what is egregious behavior and what constitutes a pattern that shows intention or reckless conduct." Sheehan "believes the biggest quality-of-care and undertreatment problems lie in behavioral services, emergency care and chronic care."
The Two Camps
Daniel Anderson, who heads the Justice Department's managed care fraud working group, said, "Consumer protection rules will help us because they specify what plans are required to provide." He added, "Using regulations isn't much of a slap on the wrist. They may or may not stop, and no message is sent to other providers not to do it. Large fraud prosecutions and settlements send a message to the whole provider community that this won't be tolerated." Malcolm Sparrow, a fraud expert at Harvard University, contends that undertreatment is a far more consequential issue than overbilling, because undertreatment can "result in patients not getting the services or specialty referrals they need." However, the American Association of Health Plans argues that such areas of health policy are not the proper domain of fraud law. The association contends "that taking health systems to court for alleged undertreatment is a gross misuse of fraud statutes." Carrie Valiant, a managed care attorney, said, "Undertreatment may be actionable as negligence, but I don't understand why this is fraud." She said that if plans eliminate cost-control measures out of fear of fraud, they could become financially insolvent. The AAHP wants the government to develop a "model compliance plan to help firms avoid fraud action," and the American Hospital Association is pushing "to make fraud rules simpler and work with plans and providers to fix any problems" (Meyer, 2/20 issue).