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Fraud & Abuse and Administrative Simplification

(Title II, Subtitle A)

To what extent will the federal government have the ability to set fraud and abuse control and prosecution policy for private insurers?

    Until now, fraud against private insurers has been very difficult to prosecute. The new law makes such fraud a federal offense and opens up new avenues of prosecution for the private insurance industry. In this sense, the new law enables carriers to seek remedies not previously available.

In the section on civil monetary penalties how will HCFA's interpretation of "excessive charges or unnecessary services" affect physician discretion in ordering patient care?

    It is not the purpose of this section to affect physician discretion relative to patient care. The law intends to crack down those who engage in a "pattern or practice of" presenting claims for services "the person knows or should know will result in a greater payment to the person" than the service the person knows or should know is applicable.

    In other words, it is meant to combat fraudulent patterns of overcharging and "up" coding.

In the administrative simplification section, please clarify what privacy measures will be used to ensure confidentiality of health care data exchanged.

    The process of designing the entire administrative simplification system will take some time. The Secretary of HHS is charged with the design of the system, including adequate privacy protections. In other words, the privacy measures are not yet determined.

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