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Integration of Compliance Management into Organizational Performance. Deborah Randall, Esq. law@deborahrandallconsulting.com www.deborahrandallconsulting.com. I. Why Develop An Internal Corporate Compliance Program?.

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Integration of Compliance Management into Organizational Performance


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    1. Integration of Compliance Management into Organizational Performance Deborah Randall, Esq. law@deborahrandallconsulting.com www.deborahrandallconsulting.com

    2. I. Why Develop An Internal Corporate Compliance Program?

    3. At present, only HMO’s, publicly traded companies, and some states are required to have compliance programs — so why develop an internal compliance program that meets federal sentencing guidelines? The Patient Protection and Affordable Care Act of 2010 “ACA” requires it for all providers by Jan 2011 Because OIG underscores the savings from its investigations --$4 Billion in 2009($492 Million in audits) and OIG at $3 Billion mid-way in 2010.

    4. IS IT JUST PHARMA? • AVENTIS Pharmaceuticals to pay $95.5 million to federal government, State Medicaid programs and other federal insurers for misstating Medicaid price base for drugs sold

    5. No---November 2009 Kaiser Foundation Hospitals - Kaiser Sunnyside Medical Center, Kaiser Foundation Health Plan of the Northwest and Northwest Permanente P.C., Physicians & Surgeons agreed to pay $1,830,322.41 in False Claims Act liability services billed hospice w/o written certifications of terminal illness 2000-4

    6. Word from the Top JUNE 2010 OBAMA WHITE HOUSE ANNOUNCES THERE WILL BE A FUTURE “DO NOT PAY” LIST. Joint Letter of Department of Justice and Office of the Inspector General about intentions to intensify fraud enforcement.

    7. A. Preventative Medicine • Implement procedures and systems to ensure compliance with and avert violations of federal, state, and local laws regulating hospice providers

    8. B. Insurance Policy in the Event the Agency Is Investigated or Prosecuted • Can persuade enforcement authorities to rely on less draconian remedies than criminal prosecution and/or exclusion from government programs • Can mitigate corporate penalties otherwise mandated under the Federal Sentencing Guidelines

    9. C. Commercial Advantage • Positions the hospice positively for acquisition, merger, networking, affiliation, managed care contracts, and relations with physicians, hospitals, and consumers

    10. D. Medicaid Law As of Jan 1, 2007, the DRA requires entities with $5 million or more in Medicaid revenues in a federal year to: • Create policies and systems informing employees and contractors about fraud laws, compliance and whistleblower protections • Include similar information in employee manuals.

    11. E. New Hospice Conditions of Participation • Hospice COPs effective year- end 2008 and February 2009 change relationships between Hospices and Nursing Facilities • Hospice COPs alter the role of physicians in hospice care delivery • Hospice quality of care is a COP focus; failure = ?? unbillable claims

    12. F. Changes in HIPAA • Breach – access, acquisition, use, disclosure • What is a discovery and when does it occur – when it would be found if the business used ‘care and prudence expected from a person seeking to satisfy a legal requirement under similar circumstances.’

    13. New HIPAA Regulation about Security Measures;Business Associates  Have you identified the e-PHI that you create, receive, maintain or transmit?  What are the external sources of e-PHI? For example, do vendors or consultants create, receive, maintain or transmit e-PHI?  The human, natural, and environmental threats to information systems that contain e-PHI?

    14. G. Medicare, Medicaid, PPACA 2010 Integrity Provisions Sec. 6401. Provider screening/enrollment requirements.[Debt; compliance programs] Sec. 6402. Enhanced Medicare and Medicaid program integrity provisions. Sec. 6404. Maximum time to submit Medicare claims not >12 mo from service

    15. INTEGRITY continued Sec. 6406. Physician documentation on referrals @ high risk of waste/abuse. Sec. 6407. Face to face encounter with patient required if physicians certify HHA;? MORE service lines possible Sec. 6408. Enhanced penalties.

    16. INTEGRITY continued Sec. 6409. Medicare self-referral disclosure protocol. Sec. 6411. Recovery Audit Contractor (RAC) program extended to Medicaid. Sec. 6501. Termination of provider participation under Medicaid if terminated in Medicare or State plan.

    17. INTEGRITY continued Sec. 6502. Medicaid exclusion from participation relating to certain control, ownership, and management affiliations. Sec. 6601. Prohibition on false statements and representations. Sec. 6604. Applicability of State law to combat fraud and abuse.

    18. Overpayment Reporting (Sections 6402(a) and 6506)  • Affirmative obligation for any provider, supplier, Medicaid managed care organization, MA organization, or PDP sponsor that has received an overpayment to report and return the overpayment to the Secretary, state, intermediary, carrier, or contractor along with a written notification of the reason for the overpayment. • Deadline for reporting and returning such overpayments is the later of 60 days after identified or the date that any corresponding cost report is due. • False Claims Act liability ALREADY EXISTS for knowingly concealing or knowingly and improperly avoiding an “obligation” to pay money to the government. • Overpayments retained beyond the deadline become actionable under the False Claims Act.  

    19. PPACA Hospice Target • After 1/1/2011, a hospice physician or nurse practitioner must have a face-to-face encounter with each hospice patient to determine continued eligibility prior to the 180th-day recertification & thereafter. Section 3132(b)(2) PPACA • Attestation of visit • HHS medical review of certain patients in hospices with high percentages of long-stay patients—Congress allows CMS to set the %

    20. II. Government Agencies Involved With Compliance Audits

    21. Where are Certs/ReCerts Going? New CMS Regulation 180day face to face no more than 15 days before 180th day and before subsequent 60 day recerts. Narrative from medical director addt’l Dating documents by named physician ALL CERTs/RECERTs affected Dates of Certification Period required

    22. Office of the Inspector General (OIG) Region 9 has 2 OIG offices; all other regions have 1 OIG office Department of Justice: US Attorney & FBI State Medicaid Fraud Control Units (MFCU) Fiscal Intermediaries (FI’s), now MACs & Enforcement: Medicare PSCs, RACs, ZPIC Audits, Fiscal Audits, CERT; Referral to OIG State Survey and Certification Agencies Office of Civil Rights (HIPAA)

    23. New Fraud Focus at CMS • Medicare and Medicaid Program Integrity groups now linked in Center for Program Integrity headed by Peter Budetti, MD, JD • Visiting Professor for Health Care Fraud at the National Association of Insurance Commissioners last year  • Counsel to the U.S. House Subcommittee on Health and the Environment under Chairman Henry Waxman • Chair of the Board of Taxpayers Against Fraud (TAF): The False Claims Act Legal Center, a nonprofit, public interest organization

    24. Department of Justice Letter 6/8/10 Obama directs 50% decrease in overpayment situations that lead to fraud Fraud prevention Summits regionally: LA, Vegas, Detroit, Boston, NYC, Philadelphia Fraud task forces every US Attorney area Double Senior Medicare Patrol on fraud CMS and Aging Ad’mn educating seniors

    25. OIG Work Plan 2010 • Hospice-Nursing Home relationships • Physician billing and ? double billing for hospice patients by attending physicians and hospices • Trends in Hospice growth • Part D duplicate billing - pharmaceuticals

    26. OIG Reports on Hospice and Nursing Facilities • Sept. 2009 – OIG found 82% of claims for hospice/NF residents lacked one or more coverage requirements • Second OIG Report was statistical and gave the intensity and frequency of NF-based hospice care….suggesting CMS might want to consider implications

    27. New State Operations Manual • Section 2085 - Operation of Hospice Across State Lines • SOM section now states that when a hospice provides services across state lines, the involved states must have a written reciprocal agreement permitting the hospice to provide services in this manner. This is a consistent position of CMS BUT no effort is made to bring States to the table to make such agreements ‘expected behavior.’

    28. Freeze in Transaction in Homecare for agencies less than 3 years old or sold within 3 yrs (aka “the 36-month rule) • Indicates huge fraud concern in home health field and rampant related agency fraud schemes • Where growth in hospice industry has been noteworthy, CMS simply allowing Regional Offices to stall and delay processing of 855s for providers

    29. Medicaid Integrity Program • In fiscal year 2007, there were roughly $627 million in overpayments, $568 million in recovered payments, and total recoveries of $1.3 billion. Overall, state program integrity initiatives cost $181 million. Testimony of MIP executive to Congress, October 2009

    30. A Very Broad Risk of Liability and Sanctions Exists for Hospice Providers

    31. A. Hospice Provider Must Know the Law • Six laws are particularly important to health care providers • Qui Tam lawsuit = whistleblower lawsuit

    32. 1. Federal False Claims • Criminal • May result in monetary penalties • May result in jail sentence • Civil • U.S. and/or private party • civil action; multiple monetary damages • persons who “knowingly” make false or fraudulent claims OR false statements in support of claims against the U.S.

    33. 1. False Claims continued False = Intentional or = “Reckless Disregard” for whether true/accurate or = Intentional Ignorance False Claims in Medicare or State Health Programs-other laws Per Service, episode, cost report

    34. 2009 Fraud Enforcement Act May 20, 2009 Federal Enforcement and Recovery Act signed by Obama Indirect submissions to government Intentional retention of funds “Material” False statements/documents Whistle-blower protection for independent contractors/contractors More subpoena power

    35. Odyssey Case Odyssey HealthCare paid the United States $12.9 million to settle a qui tam false claims case ̶ VP got $2.3 million award Allegations that patients were not terminally ill The settlement covers a period from 2001 ̶ 2005 Odyssey HealthCare also entered into a Corporate Integrity Agreement (CIA) with the HHS/OIG

    36. Faith Hospice Faith Hospice, Inc. allegations of fraudulent claims to Medicare/Medicaid Sample of medical records: 50% ineligible Forfeited approximately $599,000; half seized by civil forfeiture action

    37. Home Hospice of North Texas Misrepresented condition of patients Misinformed physicians of patient data Half million $ payback Corporate Integrity Agreement Compliance program within 90 days False Claims Act; May 29, 2008

    38. SouthernCare Hospice organization agreed to pay $24.7 million Five year Corporate Integrity Agreement with the Office of the Inspector General Alleged inappropriate admissions and LOS issues Extensive press coverage in Home Health Line

    39. California Criminal Hospice Case May 2009 family run hospice paid outside person to be ”capper” and refer patients $500 per referral with continuing payments Patients paid $200 to agree to be “terminal” Physicians paid for sign-offs Significant sentences

    40. Investigations Announced Large, for-profit hospice organizations have announced new or renewed DOJ investigations Subpoena are being issued Focus of investigations now length of stay as well as terminal condition at time of admission; nursing home focus

    41. 2. Mail or Wire Fraud • Electronic Billing • Cost Reports and Claims • Fraudulent Back-up Documentation Mailed to Payors

    42. 3. False Statements • Making an untrue statement • Filing an inaccurate CAP report • Nurses altering notes during QA or in response to ADR • Is an untrue certification = false statement?

    43. 4. Concealing or Failing to Disclose Overpayments Knowingly concealing, or failing to disclose occurrence of an event affecting right to payment • Overpayment • Duplicative billings • Outcome of internal audits

    44. 5. Medicare - Medicaid Anti-Kickback Statute • Remuneration: In cash or in kind; direct or indirect; cross referral arrangements may be illegal • Referring a patient, arranging service or recommending a provider • Giver and receiver of kickback are liable • Inducement of a beneficiary is a kickback

    45. OIG ALERTS Nursing Homes And Hospice = 2 Joint Ventures Contractual Joint Ventures

    46. OIG opinions www.oig.hhs.gov • Hospice of Martin and St. LucieLucie /fraud/docs/advisoryopinions/2000/ao00_3.htm • Contracting with Nursing Homes /2001/ao01-20.pdf • Fundraising solicitations /2001/ao01-02.pdf • Patient monitoring systems /2003/ao0304.pdf • Pre-hospitalization assessments /2006/AdvOpn06-01A.pdf • Foundations giving free drugs /2008 /AdvOpn08-17.pdf ; 2010/AdvOpn 10-06 • Patient bonuses for referrals to Independent Lvg 2010/AdvOpn10-05

    47. 6. “Stark” Law Does not apply to hospices directly — but affects other relationships among health providers, so hospices within health systems should review their physicians’ relationship with affiliated institutions, such as hospitals and home health agencies of the system All financial relationships with Physicians are affected for Designated Health Services “DHS”

    48. 7. Other Statutes • Conspiracy to Defraud the United States • Theft, embezzlement, conversion of public monies • Theft or bribery concerning programs receiving federal funds • Obstruction - of agency proceedings - of criminal investigations - of a federal audit • Money laundering

    49. 8. State Statutes • Theft, larceny, false instruments • Medicaid false claims [Attn! DRA] • States with their own Federal False Claims Act to combat Medicaid fraud and abuse: CA, DEL, D.C., FL, HA, IL., IN., LA, MA, MI, MT, N.H., N.M., NV, NY,TN, TX, VA • Health care false claims

    50. Administrative Remedies – OIG Goes after the “Little Guys” 1. Civil Money Penalties[“CMP”] 3x Error plus >$11,000 for each claim “Know or should know” were not provided as claimed, or were false or fraudulent Exclusions in administrative proceeding for Medicare or Medicaid claims Beneficiary “inducement” is CMP