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Responding to vigilant oversight - EY - United States

New Horizons: 2011 health care provider report

Responding to vigilant oversight

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Projected cost variances for selected over-running capital infrastructure projects

Projected cost variances for selected over-running capital infrastructure projects

Note: Percentage variances between market-advised cost projections and original estimates for selected capital infrastructure projects

Source: Publicly available material and EY analysis

“Health reform has brought a renewed focus on program integrity.” Don May, Vice President, Policy, American Hospital Association

Estimates by government and law enforcement agencies place the annual loss from health care fraud as high as 10% of our nation’s annual health care expenditures — or a staggering $226 billion.

An array of federal and state agencies continue to keep vigilant watch over the health care industry. Although the cost of compliance is increasing, the consequences of noncompliance can be far more burdensome.

Prudent and forward-thinking health care providers are making no assumptions about their organization’s immunity from these probes. They are carefully reviewing processes to ensure that they remain compliant — and that integrity is imbedded into every part of their culture.

CMS’ RAC recovers improper payments

Government agencies are looking to improve their culture, too.

In 2005, Centers for Medicare & Medicaid Services (CMS) launched the Recovery Audit Contractor (RAC) program which uses third-party contractors to identify and recover improper Medicare payments to hospitals, physicians and other providers and recover the funds.

RAC fits in with other health care trends.

“Health reform has brought a renewed focus on program integrity, centralizing efforts through the new Center for Program Integrity,” says Don May, Vice President, Policy, American Hospital Association.

“The Center is now the focal point for all fraud and abuse issues and for the CMS contractors hired to uncover them — including Zone Program Integrity Contractors, Program Safeguard Contractors, and Recovery Audit Contractors.”

Considerations for your board and executive leaders

Current state assessment: When was the last time you were briefed on your organization’s specific compliance with the seven standards laid out by the OIG?

Board education: Do you have in place an effective board education process that includes training in compliance?

Employee education: Does your orientation for new employees include training in compliance matters, including your organization’s compliance plan, its process for reporting medical errors or other staff concerns on compliance matters?

RACs: Does your organization have in place a multidisciplinary RAC response team that includes representatives from clinical services, financial services, medical coding, corporate counsel, IT and the compliance department?

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