A growing threat for health care

Managing risk within a health care organization is no easy task. And as government agencies aggressively use the False Claims Act (FCA) to enforce the exhaustive and complex regulations governing insurance programs, these organizations are facing an increase in liabiilty risk never seen before. 

That’s according to a recent white paper, “Managing the Growing Risk of False Claims Act Liabilities,” published by ACE Group. The paper makes the case that, essentially, any health care organization participating in Medicare, Medicaid or other government-sponsored insurance program must pay close attention to the FCA’s regulations and develop a risk management framework to address it. 

According to the Institute of Medicine, the U.S. health care system wasted $750 billion on unnecessary and overpriced medical tests and treatments, administrative fees, medical fraud and missed prevention opportunities. 

Health care organizations now face increased investigations and audits by Recovery Audit Contractors (RACs). In fact, for the first six months of 2013, nine out of 10 hospitals reported experiencing RAC activity. This should not be too surprising, howerver, since RAC auditor compensation is directly tied to recovered funds. In addition to RAC audits, health care organizations also face the possibility of audits by Zone Program Integrity Contractors (ZPICs) and Medicaid Integrity Contractors (MICs).