Status of Health Reform Legislation Uncertain
The January 19, 2010 election of Scott Brown (R-Mass.) to the U.S. Senate has sent Members of Congress back to the drawing board in their efforts to reconcile competing House and Senate health care reform legislation and pass a final bill. Senator-elect Brown’s victory eliminated the 60 vote super-majority held by Democrats in the Senate. Without the 60-vote super-majority, Senate Democrats would not be able to end a certain Republican filibuster of the final health care reform legislation. Members' efforts to rescue the health reform legislation may be limited to the following options. (1.) The House of Representatives could vote on and approve the bill passed by the Senate on December 24, 2009 and thereafter send such legislation to the President for signature; however, Speaker of the House Nancy Pelosi (D-Cal.) has indicated that she will not move to put the Senate package before the full House at this time due to insufficient affirmative votes. This approach could also incorporated the use of the budget reconciliation process to further shape the legislation after passage, which would be permitted with a 51-vote (as opposed to 60-vote) Senate majority, but this approach would be limited to only those provisions that have an impact on the budget. (2.) Earlier this week some Demoocrats suggested the possibility of putting a final health care reform bill before the House and Senate for approval prior to the seating of Senator-elect Brown; however, President Obama indicated that he would not support such an effort. (3.) The most viable option may be an attempt to pass scaled-back legislation containing only those provisions having support from both Democrats and Republicans. A reduced package might contain provisions eliminating pre-existing condition denials, promoting continuation coverage, giving incentives for state Medicaid expansion, and revisions to Medicare reimbursement encouraging quality coordinated care and efficiency. Some commentators have noted that a problem with this last option is that insurance reform without a mandatory coverage requirement is likely to be economically unfeasible. Mark Faccenda

MedPAC Recommends 2011 Inpatient, Outpatient Market Basket Updates
On January 15, 2010, the Medicare Payment Advisory Commission (“MedPAC”) voted on recommendations for 2011 updates to hospital inpatient and outpatient reimbursement, including full market basket updates, approximately 2.4 percent, for each. MedPAC’s recommendation stated that “Congress should increase payment rates for the acute inpatient and outpatient prospective payment systems in 2011 by the projected rate of increase in the hospital market basket index, concurrent with implementation of a quality incentive payment program.” MedPAC simultaneously recommended short term reductions in reimbursement by up to 2 percent going forward, in order to recoup overpayments from coding changes in 2008. “To restore budget neutrality, the Congress should require the Secretary to fully offset increases in inpatient payments due to hospitals’ documentation and coding improvements. To accomplish this, the Secretary must reduce payment rates in the inpatient prospective payment system by the same percentage (not to exceed 2 percentage points) each year in 2011, 2012, and 2013. The lower rates would remain in place until overpayments are fully recovered.” MedPAC also recommended a 0.6 percent increase in ambulatory surgery center payment rates for calendar year 2011. More information on MedPAC’s recommendations may be found here. Mark Faccenda

Missouri’s Medicaid Fraud Unit Leads Nation in Recovering Funds
On January 12, 2010, Missouri Attorney General Chris Koster announced that the state’s Medicaid Fraud Unit recovered a record-setting $81.6 million in 2009. During this time, the unit also obtained three state criminal convictions, assisted in five federal criminal convictions, and executed thirteen civil Medicaid fraud settlements. In 2008, Missouri recouped $29.7 million in improper Medicaid payments, which amounted to a recovery of $18.81 for every federal dollar received as part of a $1.5 million grant received that year from the federal Department of Health and Human Services. Koster noted that, “Efficiency of the government is critical, particularly during these challenging economic times.” The next most efficient states, as measured by amount recovered per federal dollar received, were North Carolina, Tennessee, West Virginia, Ohio, Maine, South Carolina, and Minnesota. The least efficient states were Idaho, Delaware, Montana, New Mexico and Alaska. To view the full press release, click here. Anne McNamara

National Dental-Management Company Pays $24 Million to Resolve Fraud Allegations
The government has settled False Claims Act allegations against FORBA Holdings LLC, a dental-management company known for its Small Smiles clinics. According to the government, FORBA submitted bills for medically unnecessary or substandard dental services provided to children insured by Medicaid. The allegedly unnecessary or substandard services performed on low-income children involved baby root canals, anesthesia use, extractions, sealants, and fillings. To resolve these allegations, FORBA will pay the United States and participating states $24 million, plus interest; take remedial measures to prevent similar unlawful conduct in the future; and cooperate with the government’s ongoing investigation of dentists who may have violated professional standards. The settlement illustrates the government’s focus on combating healthcare fraud, especially with the False Claims Act, which the Department of Justice has used to recover about $2.2 billion this past year in fraud cases involving federal healthcare programs. For more information on FORBA's settlement, click here. John Kelly and Selina Spinos