Guilford Center Provider Network

1. 1 Guilford Center Provider Network CORPORATE COMPLIANCE ANNUAL UPDATE tem

2. Purpose of Training Provide an Overview of Fraud and Abuse Update on Current Enforcement Activities Review/Update Your Compliance Program Laws and Regulations 2

3. Training Overview This training will provide answers to the following questions: What is Corporate Compliance? What is Fraud and Abuse? What efforts are in place to Combat Fraud and Abuse? What should I be doing? What is a Fraud & Abuse violation? What are the Sanctions and Penalties for Fraud & Abuse? How is suspicious activity reported?

4. What is Corporate Compliance A working environment that encourages - Ethical and Proper Ways to Do Business Commitment Encourages Problems to be Reported Provides a Process with Constant Monitoring Has Developed Processes which Prevent, Detect or Deter Non-Compliant Behavior 4

5. Fraud and Abuse It is essential that all Providers and Vendors of the Guilford Center understand what Health Care Fraud & Abuse is, how to detect it and how to assist members, providers, vendors or employees who may be reporting suspicious activities.

6. Impact of Fraud and Abuse Health Care Fraud is a crime that has a significant effect on the private and public health care payment system. Fraud & Abuse accounts for over 10% of annual health care costs. Taxpayers pay higher taxes because of fraud in public programs such as Medicaid and Medicare. Employers and individuals pay higher private health insurance premiums because of fraud in the private sector health care system. Recognizing the serious implications of fraud, The Guilford Center’s Compliance Program is dedicated to detecting, investigating and preventing all forms of suspicious activities related to possible health insurance fraud & abuse, including any reasonable belief that insurance fraud will be, is being, or has been committed.

7. What is Fraud? Fraud is defined as an intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to him/herself or some other person. It includes any act that constitutes fraud under applicable federal or state law.

8. What is Abuse? Abuse is defined as Provider practices that are inconsistent with sound fiscal, business, or medical practices, and result in an unnecessary cost to Medicaid, or in reimbursement for services that are not medically necessary or fail to meet professionally recognized standards for health care. It also includes recipient practices that result in unnecessary costs to the Medicaid program.

9. What is Provider Fraud? Provider Fraud: Providers who deliberately submit claims for services not actually rendered, or bill for higher-priced services than those actually provided. Providers of medical equipment and home health services who defraud the Medicaid or Medicare program and private payers, often paying kickbacks to dishonest individuals for referrals or rendering of unnecessary services. Charges are submitted for payment for which there is no supporting documentation available.

10. Claims or Subscriber Fraud Claims or Subscriber Fraud: Subscriber/Claim fraud can involve alteration of bills or creation of claims, submission of claims for ineligible dependents, and misrepresentation in response to specific questions on the claim forms. Subscriber/Claims fraud can be submitted by anyone.

11. 11 Medicaid Integrity Program Current Activities Federal Level

12. 12

13. RecoveriesJanuary 2009-June 2011 Civil Settlements – The Office of the Inspector General (OIG) recovered: 7.3 Billion Dollars Under the False Claims Act It is anticipated that the Department of Justice (DOJ) will recover 3 to 4 billion annually for the next 10 years. Never before has there been such an aggressive or successful focus on fighting fraud and abuse in government programs. 13

14. Return on Investment Three year period 2007-2009 rolling average $17.50 return per dollar invested Estimate for 2011 is $13.00 per dollar invested 14

15. Health & Human Services (HHS) & OIG Activities FY 2010 Excluded 3340 Individuals and Entities from participation in Federal Healthcare Programs 894 Related to Criminal Convictions (Medicare & Medicaid) 263 Crimes to other Health Care Programs 247 Patient Abuse or Neglect 1582 Results of Licensure Revocation 354 Other 15

16. Federal Health Care Fraud Prosecutions August 29, 2011 USA Today reported First eight months of 2011 prosecutions on pace to rise 85% 903 prosecutions so far this year 24% increase over all of fiscal year 2010, when 731 were prosecuted Prosecutions have gone up 71% in the past five years 16

17. First Civil Monetary Penalty (CMP) Imposed for a HIPAA Violation Cignet Health of Maryland from September 2008 – October 2009, failed to provide 41 patients access to their Medical Record The patients filed complaints Cignet was uncooperative with the investigation resulting in a CMP of $4.3 million 17

18. OIG Issues a “Most Wanted” List OIG Now has a most wanted fugitive list The list is periodically published This effort has resulted in the location of many fraudsters 18

19. 19

20. Provisionally Licensed Counselor In Missouri Presented documents with forged signature to support claims Submitted claims to Medicaid for children’s counseling services she did not perform Billed the state for more than $3,264 20

21. Charges and Penalties Three Class C Felonies Punishable by up to 7 years in prison Fines for each count Restitution Cost of bringing the prosecution 21

22. Louisiana Mother & Daughter Felony Theft from Group Home Mother (age 47) was responsible for bookkeeping and sole staff member tasked with management of resident funds She prepared fraudulent checks from resident funds Her daughter picked up the checks, endorsed and cashed the checks at a check cashing facility and split the funds with her mother – checks totaled $61,502 in one year If convicted each could receive up to 10 years in prison 22

23. Detroit Fraud Scheme September 1, 2011 Eighteen individuals charged in fraud scheme involving home health and psychotherapy services – billed Medicare $28 million in fraudulent claims Searched 11 locations and seized 28 bank accounts Includes physicians, nurses, clinic owners and other medical professionals. 23

24. 24 How are we doing? Compliance in North Carolina

25. On the State Level House Bill 1135 – Qui Tam/Liability for False Claims Significantly changes North Carolina’s False Claims Act – the bill passed and was signed off by Governor Perdue on August 28, 2009. However, March, 2011 NC received notice that the state False Claims Act has been determined not to meet the Section 1909-B of the Federal Act 25 Closely follows the Federal False Claims Act imposing severe penalties for violations and protecting whistleblowersClosely follows the Federal False Claims Act imposing severe penalties for violations and protecting whistleblowers

26. North Carolina Efforts to Enforce Swat Team – Trained, ready to enforce IBM – Contract with NC to mine Medicaid Data for errors and overpayments (receives 10% of funds recovered due to their efforts) PCG – National Company with Charlotte location assisting the state in performing investigations due to the backlog. This company also serves as NC RAC Auditor for Medicaid. 26

27. NC Couple Sentenced July 6, 2011 A Winston-Salem couple who operated as Universal Services, Inc., Reynolds Home Care and Triage Behavioral Health Systems has been sentenced to two years in prison each for health care fraud, tax evasion and conspiracy to defraud the federal government. 40-year-old Ruben D. McLain and 38-year-old Michelle Judge McLain were also ordered to pay more than $1.3 million in restitution to the Internal Revenue Service. Prosecutors say the McLains used a fake tax identification number to create an account for their business, concealed their involvement in the company through use of a nominee and a fictitious person, they also didn’t file tax returns or didn’t declare their true income. They also pleaded guilty to failing to pay social security and Medicare Taxes to the IRS. The couple is accused of using business funds to buy personal items including jewelry, and pay their children's tuition. 27

28. Fraudulent Trends in Outpatient Services(from implementation Update #90 Program Integrity has identified some trends in out patient mental health non-physician practices, independent and group. Some providers are operating after-school programs, summer programs, or non-licensed day treatment programs and submitting claims for reimbursement from the N.C. Medicaid Program. Medicaid only reimburses for services that are medically necessary when the provider is qualified to provide the services. 28

29. What One Provider Did Recently, one provider who received a federal indictment operated an afterschool tutorial program. Michael Shawn Brown, a Columbus County School counselor and an outpatient mental health provider licensed as a Professional Counselor has been indicted on charges of wire fraud, identity theft, and arson by the U.S. 8 Attorney's Office. He allegedly provided free teacher-supervised tutoring services, snacks and transportation to children of lower-income families. 29

30. What One Provider Did Mr. Brown allegedly had his employees obtain copies of each recipient’s Medicaid card. He is suspected of submitting false claims for therapy sessions to his billing agent in Florida for reimbursement from the North Carolina Medicaid program. Mr. Brown's business also burned down one night before he was scheduled to meet with investigators. Currently, Mr. Brown is charged with twenty counts of wire fraud, two counts of aggravated identity theft, two counts of arson and one count of making material false statements. Providers should know that defrauding the NC Medicaid program is a serious offense and will be dealt with accordingly. Sometimes the penalty includes civil and/or criminal remedies. 30

31. Fraud Can Occur Anywhere Department of Health & Human Services Jihan Cover, 33 of Arden, NC, pleaded guilty to theft of government property. Ms. Cover procured items for the National Institute of Health (NIT) and the National Cancer Institute (NCI) using assigned government credit and purchase cards. Ms. Carven used these cards for personal purchases totaling over $114,494, she made 170 purchases on Amazon.com for items such as toys, exercise equipment, clothes and other personal items. 31

32. To Make A Report to NC Fraud Unit 32

33. 33 Coming Soon to a Provider Near You – RAC Audit What you need to know What you need to do

34. You Need a Compliance Program The Deficit Reduction Act of 2006 made Compliance Programs Mandatory for Providers billing 5 million or more in Medicaid services annually, at this time it is expected that all Medicaid providers have compliance activities in place Best Practice for all Medicaid and/or Medicare Providers Required by many accreditation bodies Deters and Detects unethical or illegal behaviors 34

35. Benefits of a Compliance Program Ensure proper payment of claims Minimize billing mistakes Can reduce fines and penalties if overpayments are identified in audit by CMS or OIG Avoid conflict with the self-referral and anti-kickback statutes Demonstrate good faith efforts to submit all claims properly Increase accuracy 35

36. What is a Compliance Program? A Corporate Culture of Ethical Behavior A Plan, Policy & Procedures outlining your program, communication, activities and maintenance of compliance activities Ongoing monitoring, auditing, and review of compliance activities to assure every employee is aware and educated on the expectation of compliant behavior 36

37. How Do I Create a Compliance Program? The Federal Sentencing Guidelines identify eight elements of a compliance program Written standards of conduct High level individuals responsible to oversee compliance Due care taken not to delegate to those who may engage in illegal activity 37

38. How Do I Create a Compliance Program? Effective training and education Monitoring systems and hotlines (anonymous access) Reasonable steps taken to respond appropriately to detected offenses. Disciplinary systems Risk Assessment ANNUALLY 38

39.  Written Standards of Conduct  A code of Ethics or Code of Conduct which includes Clear expectations of compliance Consequences for Violations Every employee should be trained on the Code and sign an attestation indicating he/she understands and will abide by the Code. 39

40. Conflict of Interest Policy A Conflict of Interest Policy which includes Definition of Conflict of Interest How Conflicts will be addressed Disclosure of potential conflicts Every employee and board member is trained on the policy, and completes a disclosure form to avoid potential conflicts of interest 40

41. High level Individuals Responsible to Oversee Compliance An Employee or Outside Entity designated as “Responsible for the Compliance Program” Should report to the CEO with access or reporting relationship with the Board of Directors Trained, ethical, diligent, trustworthy Well respected and trusted by others 41

42. Duties of Compliance Officer Duties of the Compliance Officer – Oversight of Compliance Program Chair Compliance Committee Assure Staff are Trained Oversee investigations Maintain Compliance Program Records Ensure all these tasks are included in a written job description 42

43. Due Care Taken Not to Delegate to Those Who May Engage in Illegal Activity Criminal Background Checks Assure individuals are not “excluded” by checking OIG exclusion list* Verification of Social Security Number Driving Records Healthcare Registry Primary Source Credential Verification 43

44. Effective Training and Education Training Programs for all Staff, Independent Contractors and Vendors which includes – The expectations of your compliance program Information regarding statutes and laws which govern ethical behavior in healthcare Penalties and/or sanctions for violations 44

45.  Mechanism for Anonymous Reporting of Concerns   Hotline (internal or external) Suggestion box Other 45

46. Auditing and Monitoring Develop effective monitoring tools Prepare a schedule for internal monitoring and auditing Prioritize based on risk potential Monitor and Document results Action Plan based on results of monitoring or audits 46

47. Reasonable Steps Taken to Respond Appropriately to Detected Offenses Fact Finding Investigations (Internal or External) Action taken to assure offenses not likely to re-occur Appropriate disciplinary action Documentation of each report, investigation and dispensation 47 Group Activity – Hot Line Call – different for each group What they did – step by step Results Action Go forward - reportGroup Activity – Hot Line Call – different for each group What they did – step by step Results Action Go forward - report

48. Disciplinary System Detailed disciplinary process in place that is communicated to all staff If you have an Employee Handbook it should include statements regarding your Compliance Program and results of non-compliance Consistency – Sanctions for similar actions should be monitored 48

49. Reducing Your Risk Annual Risk Assessments In addition to assuring that you have adequate insurance coverage, have effective health & safety processes You should complete a comprehensive Risk Assessment every year – look at a wide range of activities 49

50. Summation In today’s enforcement environment, everyone is subject to increased scrutiny Assess where you are in addressing these new risks and preparing for the consequences of increased external monitoring Get your organization’s support and develop and implement a plan 50

51. Our Suggestions Include Compliance in New Employee Orientation Program Annual Refreshers Get employees thinking about compliance and protecting the agency as they go through their daily activities 51

52. How do I Assure our Compliance Program is “Effective”? Periodically evaluate your program through- Employee surveys and feedback Periodic review of benchmarks established for audits Investigations Disciplinary actions Refunding Overpayments Promptly Evaluate all elements of your program including policies, training, practices, and compliance personnel. 52

53. When is a Plan Automatically Deemed “Ineffective” An individual holding a high level position is involved in the violation An individual who holds a position of leadership in the culpable unit or department is involved in the violation; or A person involved in administering the compliance program is involved in the violation 53

54. 54 Federal Laws That Address Compliance

55. What Federal Laws Address Fraud and Abuse? False Claims Act (FCA) Anti-Kickback Statute HIPAA Deficit Reduction Act Civil Monetary Penalties Act The False Claims Whistleblower Employee Protection Act 55

56. Civil and Administrative Statutes The False Claims Act (31 U.S.C. 3729-3733) This is the law most often used to bring a case against a health care provider for the submission of false claims. The False Claims Act prohibits knowingly presenting (or causing to be presented) a false or fraudulent claim for payment or approval. 56

57. The False Claims Act A false claim is a claim for payment for services or supplies that were not provided specifically as presented or for which the provider is otherwise not entitled to payment. 57

58. The False Claims Act Definitions Knowingly – This means that the provider (1) has actual knowledge that the information on the claim is false; (2) acts in deliberate ignorance of the truth or falsity of the information on the claim; or (3) acts in reckless disregard of the truth or falsity of the information on the claim. 58 It is important to note the provider does not have to deliberately intend to defraud the Federal Govern. In order to be found liable under this Act. The provider need only “knowingly” present a false or fraudulent claim in the manner described above.It is important to note the provider does not have to deliberately intend to defraud the Federal Govern. In order to be found liable under this Act. The provider need only “knowingly” present a false or fraudulent claim in the manner described above.

59. The False Claims Act Definitions, cont. Deliberate Ignorance – This means that the provider has deliberately chosen to ignore the truth of falsity of the information on a claim submitted for payment, even though the provider knows, or has notice, that the information may be false. 59

60. The False Claims Act Definitions, cont. Reckless Disregard – Means that the provider pays no regard to whether the information on a claims submitted for payment is true or false. 60

61. The False Claims ActExamples A claim indicating a higher level of service than was actually provided A claim for a service the provider knows is not reasonable and necessary A claim for clinical services provided by an individual who does not meet the minimum education, experience or licensure requirements to provide the service 61

62. The False Claims ActExamples A claim for a service or supply that was never provided A claim indicating the service was provided for a diagnosis code other than the true diagnosis code in order to obtain reimbursement for the service (which would not have been covered if the true diagnosis were submitted) 62

63. The False Claims Act Penalty for Unlawful Conduct The Penalty for violating the False Claims Act is a minimum of $5,500 up to a maximum of $11,000 for each false claim submitted. In addition, the provider could be found liable for damages of up to three times the amount unlawfully claimed. 63

64.  Anti-Kickback – It is a crime to knowingly and willfully solicit, receive, offer, or pay remuneration of any kind (money, goods or services) for the referral of an individual to another for the purpose of supplying services that are covered by a Federal Health care Program; or purchasing, leasing, ordering, or arranging for any good, facility, service, or item that is covered by a Federal health care program. 64

65. Anti-Kickback Penalty for Unlawful Conduct The penalty may include the imposition of a fine of up to $25,000, imprisonment of up to 5 years, or both. In addition, the provider can be excluded from participation in Federal health care programs. 65

66. Anti-Kickback Example Physician accepts payments to sign Certificates of Medical Necessity patients he/she never saw. Provider pays a referral fee and records the payment as salary or pays a higher than normal pay rate to compensate for the referrals 66

67. Anti Kickback Statute Examples of Kick-Backs: Money Waiver of co-pays Discounts Gifts Credits Commissions 67

68. False Statements Related to Health Care Matters  (18 U.S.C. 1035) It is a crime to knowingly and willfully falsify or conceal a material fact, or make any materially false statement or use any materially false writing or document in connection with the delivery of or payment for health care benefits, items or services. Note this law applies to most other types of health care benefit plans as well. 68

69. False Statements  Penalty for Unlawful Conduct The penalty may include the imposition of a fine, imprisonment of up to 5 years or both. 69

70. False StatementsExample A health care provider certifies on a claim form that a service was rendered to a patient, when he/she knew the service was not provided. 70

71. Civil Monetary Penalties Law(42 U.S.C. 1320) This is a comprehensive statute that covers an array of fraudulent and abusive activities and is very similar to the False Claims Act. This law prohibits a provider from presenting, or causing to be presented, claims for services that the provider “knows, or should have known” were ….. (continued next page) 71

72. Civil Monetary Penalties Law Not provided as indicated by the coding on the claim Not medically necessary Furnished by a licensed physician who obtained his/her license through misrepresentation of a material fact. Furnished by a physician who was not certified in the medical specialty that he/she claimed to be certified in or Furnished by a practitioner who was excluded from participation in the Federal Health Care Program to which the claim was submitted 72

73. Mail and Wire Fraud ( 18 U.S.C. 1341 and 1343) It is a crime to use the mail, private courier, or wire service to conduct a scheme to defraud another of money or property. The term “wire services” includes the use of telephone, fax machine or computer. Each use of a mail or wire service to further fraudulent activities is considered a separate crime. For instance, each fraudulent claim that is submitted electronically would be considered a separate violation of the law. 73

74. Mail and Wire Fraud Penalty for Unlawful Conduct The penalty may include the imposition of a fine, imprisonment of up to 5 years, or both. 74

75. Mail and Wire FraudExample A physician, clinician, or provider knowingly and repeatedly submits electronic claims to Medicare or Medicaid for services that were not provided to Medicaid recipients, with the intent to obtain payments from Medicaid for services never performed. 75

76. Obstruction of a Criminal Investigation of Health Care Offenses  (18 U.S.C. 1518) It is a crime to willfully prevent, obstruct, mislead, or delay the communication of records relating to a Federal health care offense to a criminal investigator. This law also applies to most types of health care plans. 76

77. Obstruction of a Criminal Investigation Penalty for Unlawful Conduct The penalty may include the imposition of a fine, imprisonment of up to 5 years, or both. 77

78. Your Responsibilities as an Employer Be certain you and your staff have read the compliance plan, policies and procedures and fully understand them. Ask questions about anything you are unsure of Police yourself!!! And document those actions Perform your work with integrity If you learn of impropriety or suspect it, investigate! 78

79. Your Responsibility as an Employer Include staff adherence to rules, regulations and overall compliance in your evaluations Maintain awareness in order to detect violations and properly report them Never retaliate against staff who report issues in good faith Document your efforts to “get it right” 79

80. 80 THANK YOU Ann Taylor, SPHR Ann Wilson, CPA, MBA, CFE HR & Compliance Specialist Finance & Compliance btaylor33@carolina.rr.com awilson45@carolina.rr.com 704-231-4908 704-467-4424 Questions