News at a Glance – March 2016

HHS Achieves Milestone Ahead of Schedule. In January 2015, the Department of Health and Human Services (HHS) set a goal of tying roughly 30 percent of Medicare payments to alternative payment models that focused on quality and value rather than volume of services. It projected meeting that goal by the close of 2016. However, the agency announced this month that, by its estimates, it has already reached that goal. It said that Centers for Medicare & Medicaid Services Office of the Actuary vetted those estimates and found them “to be sound and reasonable”—multiplying the number of Medicare beneficiaries in alternative payment models by estimated cost of health care and comparing that figure to Medicare spending projections. HHS cited the current 477 Medicare Shared Savings Program and Pioneer Accountable Care Organizations (ACOs) with saving $411 million and for creating incentives to coordinate care.

Fraud and Abuse Recoveries Decline. The Department of Justice (DOJ) and Department of Health and Human Services (HHS) released their annual report regarding the achievements of the Health Care Fraud and Abuse Control (HCFAC) Program for Fiscal Year 2015 and it indicates the government recovered $2.4 billion in judgments, settlements and administrative penalties from fraud cases. A press release announcing the report touts that recovery as a return on investment of $6.10 for every dollar spent over the last three years. Impressive numbers, yet not quite as impressive as 2014’s—when the government reported $3.3 billion in recoveries and estimated $7.70 per dollar spent over the prior three years. Overall, since the HCFAC program’s launch in 1997, the government has recovered $29.4 billion for the Medicare Trust Fund. Recoveries in any one year are the culmination of efforts that span more than one fiscal year. This year, the report indicates that for 2015, the government “won or negotiated over $1.9 billion in health care fraud judgments and settlements.” That’s down from the $2.3 billion reported as won or negotiated in Fiscal Year 2014. Note, however, that enforcement efforts don’t appear to be waning. In its 2017 Budget Request, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) is requesting a total budget of $419 million to oversee the administration of the HHS programs—that includes $334 million for oversight of Medicare and Medicaid and the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative.

Record-breaking $646 Million Anti-Kickback Settlement. The Department of Justice announced last week that Olympus Corp. of the Americas (OCA) agreed to pay $623.2 million in settlement of criminal and civil cases alleging payment of kickbacks to hospitals and physicians. The settlement was reported to be the largest settlement of anti-kickback allegations by a medical device company. Another $22.8 million would be paid by a subsidiary to settle alleged violations under the Foreign Corrupt Practices Act. OCA has agreed to the settlement amount plus a three-year deferred prosecution agreement (DPA). A DPA is an agreement under which the government will defer prosecution and dismiss the charges if the defendant company fulfills various obligations. OCA also entered into a corporate integrity agreement with the U.S. Department of Health and Human Services Office of Inspector General (OIG). The company acknowledged the settlements on its website and expressed a commitment to compliance: “Olympus leadership acknowledges the Company’s responsibility for the past conduct, which does not represent the values of Olympus or its employees. Olympus is committed to complying with all laws and regulations and to adhering to our own rigorous Code of Conduct which guides our business processes, decisions and behavior. The Company has implemented and will continue to enhance its robust compliance program.”