False Claims harm

The health care industry got what it wanted from legislation without Congress ever taking a vote on the issue. Good sense now would dictate that members of Congress shelve this issue while giving recent reforms a chance to work.

The bill in question, the Health Care Claims Guidance Act, would weaken the False Claims Act, a valuable tool for catching fraud in a range of government-supported industries. The trouble was that federal regulators were using the act to beat hospitals over the head for minor errors. Several Maine hospitals were threatened with triple damages and other punishments because of instances of overbilling amounting to several thousand dollars on billing records totaling billions. These were honest mistakes being treated the same as large-scale scams. Someone needed to call off the dogs.

At the same time, unfortunately, an investigation by the General Accounting Office found that fraudulent Medicare suppliers were stealing more than $23 billion annually from the system. Clearly, federal investigators would need tough anti-fraud tools to stop this extensive theft. The False Claims Act is valuable because it gives federal investigators a clear mandate to pursue these crimes and allows people who have evidence of fraud to sue on behalf of government. These “whistleblowers” have returned $4 billion to the Treasury over the last decade.

The legislation in Congress would dismantle some of this by requiring a higher level of proof, setting a minimal level of fraud to be investigated and offering retroactive exemptions. Whistleblowers would be less welcome and the the health care industry would be, in effect, told that smaller instances of fraud were acceptable.

This dangerous bill had one redeeming quality: It got the Department of Justice to review its treatment of hospital billing records. Last June, it came up with a less-adversarial way of approaching hospitals, including what it refers to a contact letters, which, according to Acting Assistant Attorney General L. Anthony Sutin, “will inform health care providers that questionable conduct has been identified and that the department would like a dialogue with them. …” When the Department of Justice says it wants to start dialoging, hospitals can declare victory and put away their cudgel.

Yet the bill remains active. Sen. Olympia Snowe, in fact, signed on as a co-sponsor a month after the department surrendered. Though there is a lot less enthusiasm in the Senate for the bill than there was last spring in the House, it may still be attached to other legislation when Congress returns next month.

If the Justice Department carries through on its promise to restrain its hospital investigations, members of Congress have no reason to continue with this bill. They should drop it now before the False Claims Act is seriously harmed.