Payment Suspension for Credible Fraud Allegation Turns Up the Heat on Providers

Providers should brace for more Medicare and Medicaid payment suspensions based on a credible allegation of fraud. CMS and state Medicaid agencies may block payments to large swaths of providers in one fell swoop, which happened in the nation’s capital this spring, and impose suspensions on a variety of services and care providers.


“If someone learns they are under investigation, they need to be prepared for the possibility — moving up to the probability — for payment suspension, especially on the Medicaid side,” says San Francisco attorney Judy Waltz, with Foley & Lardner LLP.


As defined in 2011 CMS interim final regulations, a “credible allegation of fraud” includes an allegation from patterns identified by audits, civil false claims cases, law enforcement investigations, hotlines, and claims data mining, Waltz says. “Allegations are considered to be credible when they have indicia of reliability,” the regulations state (42 CFR Sec. 405.370 for Medicare and 42 CFR Sec. 455.2 for Medicaid). CMS and states can skip payment suspensions for credible allegations of fraud if there is good cause (e.g., it would hinder beneficiary access or alert the target of an investigation).


“A credible allegation is a much lower standard than what used to be required for payment suspensions,” she notes.


Source: Nina Youngstrom, Report on Medicare Compliance [6/9/14]

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