On April 29, 2013, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule to modify the Medicare Incentive Reward Program to further incentivize individuals to report known incidents of Medicare fraud and abuse.  The proposed rule also provides several updates for the Medicare enrollment program¹ with the goal of maintaining the integrity of the Medicare program by preventing the enrollment of fraudulent enterprises, and to facilitate further success of programs such as Health Care Fraud and Abuse Control Program (HCFAC) to identify and prosecute Medicare fraud schemes.²  Refer to “Health Care Fraud and Abuse Program Nets $4.2 Million in FY 2012”, appearing in the April 2013 issue of Health Capital Topics, for more information regarding recent activity of HCFAC.³

The Medicare Incentive Reward Program was first established on June 8, 1998, with the intent of encouraging individual reporting of potential and known cases of fraud and abuse.⁴  Since then, CMS has recovered $3.5 million in Medicare fraud and abuse funds, while paying out only $16,000 in rewards.⁵  Updates to the Incentive Program for reporting Medicare fraud and abuse include both an increase in potential reward money—from 10 to 15 percent of the total amount collected—and the program cap for which an individual can be rewarded (from $10,000 to $66 million, netting out to a total potential individual reward of $1,000 and $9.9 million, respectively).⁶ It is anticipated that the proposed incentive program will result in a net increase of $24.5 million per year in recoveries for the Medicare program.⁷

The recently proposed changes to provider enrollment provisions update the screening rule published in the February 2, 2011 edition of the Federal Register.⁸ The recently proposed rule allows CMS to control enrollment, specifically by restricting the ability of an individual or entity to re-enroll to avoid repayment of existing program debt and by revoking billing privileges and the enrollment ability of any provider with either:

(1) a managing employee having a felony conviction; or, (2) a pattern of inappropriate billing practices.⁹ CMS has not yet defined what the term “managing employee” will encompass.¹⁰ 

CMS is accepting comments on several parts of the proposed rule through June 28, 2013.  Given the emphasis on identifying and combating fraud and abuse in the healthcare system over the past decade, and most notably during the reign of the Obama administration, it appears likely that the healthcare system will continue to see provisions such as those contained in the April 29 proposed rule, going forward.