Eight Ways Baucus Bill Would Root Out Healthcare Fraud

3. Providers working under Medicare Condition of Participation agreements would first have to establish core elements of compliance. Physicians and suppliers would have to keep documentation of referrals to programs at high risk of fraud and abuse, and provide that to officials upon request. Physicians must have a face-to-face encounter with a patient before making a referral for home health or durable medical equipment.

4. The maximum period for submission of Medicare claims would be reduced to 12 months from 36 months for Part A and Part B.

5. Hospitals that fail to report an adverse action affecting physicians' clinical privileges would face civil monetary penalties.

6. Penalties for submitting false claims and for submitting false statements in false claims would be increased, as would penalties for delaying inspections or obstructing program audits. For Medicare Advantage and Part D, penalties would be enhanced for marketing violations, as well as submitting false information.

7. Recovery Audit Contractor programs would be extended to Medicare Parts C and D and Medicaid.

8. The Health Care Fraud and Abuse Control Program, now funded at $376 million, would increase by $10 million each year for 10 years.

If this bill passes as is, providers will have to spend a lot more and use a lot more personnel resources just to qualify for participation in Medicare programs. And once in, they'll have to account for their spending in much more detail.

And there may be push back with political consequences. Says Saccoccio, "There may be a tipping point where if you push too aggressively on fraud, you may get push back: ‘Why are you going after all of us, when there are just a few bad apples out there?"

Only time will tell whether all the extra effort by many honest providers will turn out to be worth it.