More individuals could be blocked from Medicare, Medicaid under new bill

Individuals affiliated with fraudulent healthcare companies would face tougher government scrutiny under a bill introduced in the House on Tuesday.

The “Fighting Medicare Fraud Act of 2016,” introduced by Reps. Lois Frankel (D-FL) and William Keating (D-MA), would give the Department of Health and Human Services greater ability to exclude individuals linked to companies penalized for fraud from participating in federal healthcare programs.

That increased ability would close a “loophole” that allows employees to resign before a company receives a penalty and “potentially launch a new Medicare fraud scheme,” the bill's authors said. Current laws only exclude individuals who are still employed by the company, so the HHS Office of Inspector General is blocked from excluding individuals who voluntarily leave, Kirk Ogrosky, an attorney with Washington-based law firm Arnold & Porter, told Bloomberg BNA.

The bill would expand the OIG's exclusion abilities to individuals who had ownership, control interest, or an officer or managing position with a fraudulent company who knew or “should have known” about fraudulent conduct.

“We need to ensure taxpayer dollars are committed to providing vital services for our seniors, not lining the pockets of fraudulent businesses and CEOs,” said Keating in a statement on the bill. “This common-sense legislation stops the cycle of deceit amongst the worst actors — toughening the consequences felt by those who illegally exploit our elderly population while strengthening the Medicare system in the process.”

The proposed legislation would also make stealing Medicare, Medicaid or Children's Health Insurance Plan numbers a federal offense carrying a possible prison sentence of up to 15 years.

Medicare Advantage and Part D organizations would also be required to report incidents of potential fraud and abuse within 60 days of identification under the bill. Research has indicated that instances of fraud and abuse in those programs “may be unreported,” the bill's authors said.

The bill has been referred to the House Energy and Commerce and Ways and Means committees. Similar legislation was introduced in 2013, but never received a full House vote.