Contingency arrangements do not necessarily equal fraud and abuse

Many healthcare organizations avoid entering contingency-based arrangements with consulting firms that specialize in Medicare revenue optimization because they fear Federal investigation of such an arrangement might lead to a finding of fraud and abuse. A Medicare fraud alert issued by the HHS Office of the Inspector General (OIG) appears to justify that fear, suggesting that contingency arrangements are inherently unethical. Nonetheless, current Federal regulations clearly allow healthcare organizations to enter into contingency-based relationships with consulting firms to seek legitimate optimal payment. Healthcare organizations may do so without fear of Federal legal action if they ensure that the consultant is ethical and competent and that the DRG review process used is both legitimate and retrospective, subjecting all recommended changes to approval by both the healthcare organization and appropriate peer review organization.