This is the second in a series of posts analyzing randomly selected provisions in HR3200, the House Democratic health care restructuring bill. In the prior post, I examined the almost incomprehensible section 1721 concerning payments to primary care practitioners.
The page selected for this post, using the dartboard method, is page 692 of the House Bill which contains the final paragraph of Sec. 1613, “Enhanced Penalties for Delaying Inspections.” As set forth below, the title is apt. The section gives the government a huge hammer, in the way of sizable daily penalties, to ensure that providers and suppliers to federal health care programs permit federal officials access for inspections.
Section 1613 amends Section 1128A(a) of the Social Security Act (42 U.S.C. 1320a–7a(a)), “as amended by sections 1611 [enhanced penalties for false statements on provider or supplier enrollment applications] and 1612 [false statements in support of a false claim]” of the House Bill, by adding penalties where a person:
10) fails to grant timely access, upon reasonable request (as defined by the Secretary in regulations), to the Inspector General of the Department of Health and Human Services, for the purpose of audits, investigations, evaluations, or other statutory functions of the Inspector General of the Department of Health and Human Services;’’
Looking at the cross-references, this is part of increased fraud penalties in the legislation, in this case having to do with providers and suppliers under any federal health care program. Section 1613 imposes penalties for any provider or supplier who refuses to grant access for an inspection under applicable regulations.
But determining the exact application is very tricky. The proposed amendment says that the penalty is determined using the following formula:
(4) in the matter following paragraph (10), as inserted by paragraph (3)—
(A) by striking ‘‘or’’ after ‘‘$50,000 for each such act,’’;
(B) by inserting ‘‘, or in cases under paragraph (10), $15,000 for each day of the failure described in such paragraph’’ after ‘‘false record or statement’’.
It is hard to figure out this language, because of the use of the words “in the matter” and the reference to “paragraph (3).” There may be a logic to this wording, but it is not obvious. I think it means that penalties for violation of this new paragraph 10 will be $15,000 for each day on non-compliance. So if someone delays for a week, the penalties would be $105,000.
Unlike the provisions of section 1721, examined in the prior post, these penalty provisions are not incomprehensible. But they are hard to follow, requiring a time-consuming comparison of existing statutes and other provisions in the House Bill.
This provision creates a new inspection regime giving the government access to a supplier or provider’s premises, and gives the government a very heavy hammer to enforce compliance with the government’s inspection requirements. I don’t know enough about these specific types of inspections to determine if they exist elsewhere in the law, but the drafters obviously felt the need to add these access requirements.
Is this a good thing? The positive is that fraud in government health care programs is rampant, so anything which gives the government additional investigative tools could be helpful.
The downside is that government is given substantial new powers, under threat of heavy daily fines, allowing it access as, if, and when it deems necessary. Certainly, one can imagine scenarios where a person believes the government is acting unreasonably in requesting access, but the fear of daily penalties would put such person at severe financial risk.
VERDICT: The lesson would be that if you do business with the government health care system, your business is an open book subject to inspection and access at any time.
This post is cross-posted at American Thinker.