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Furnishing Your Compliance House: OIG Risk Areas. Marie C. Infante, Sr. VP, Chief Compliance Officer, Golden Living & Affiliated Companies Ken Burgess, Esq. Poyner Spruill, LLP. Furnishing Your Compliance House. Our “house” analogy Structural aspects of compliance program (written)

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furnishing your compliance house oig risk areas

Furnishing Your Compliance House: OIG Risk Areas

Marie C. Infante, Sr. VP,

Chief Compliance Officer,

Golden Living & Affiliated Companies

Ken Burgess, Esq.

Poyner Spruill, LLP

furnishing your compliance house
Furnishing Your Compliance House
  • Our “house” analogy
    • Structural aspects of compliance program (written)
      • Compliance officer, committee
      • Employee codes of conduct
      • Training and education
      • Auditing and monitoring
      • Reporting
  • Compared to the laws and company policies that make up the interior or “guts” of the program
stated differently
Stated Differently
  • Think of compliance in 2 parts:
    • The laws/policies you must comply with
    • The mechanical systems that help ensure you do
  • Now, we’re ready to start discussing the “furniture” or, in OIG-speak, the risk areas nursing facilities should focus on in their compliance programs
the anti kickback statute
The Anti-Kickback Statute
  • Focus: referrals of residents and/or services paid for in whole or in part by any federal health care program (Medicare, Medicaid, TriCare, etc.). Focuses on:
    • How you make or receive referrals, and
    • Whether you give, receive, solicit or help arrange anything of value as part of process of obtaining or making referrals.
major sources of referrals we get
Major Sources of Referrals We Get
  • MDs
  • Other health care professionals
  • Hospital/hospital discharge planners
  • Hospices
  • Home health agencies
  • Other SNFs
major referrals we make
Major Referrals We Make
  • Hospices
  • DME
  • Labs
  • LTC pharmacies
  • Hospitals
  • MDs
  • Other SNFs
  • Therapy companies/therapists
both types must comply with anti kickback statute
Both Types Must Comply with Anti-Kickback Statute
  • Places limits on business arrangements relating directly/indirectly to federal health care program business which in any other context would be permissible and/or encouraged
  • Examples: free computer from pharmacy, free training of certain types, swapping Part B business for the fixed-price Part A
what the statute prohibits
What the Statute Prohibits
  • 1) Giving, accepting, soliciting (asking for) or arranging for 2)items of value, in any form (gifts, certain discounts, cross-referrals, cash), 3) directly or indirectly 4) for purpose of inducing or rewarding another party to make referrals of services 5) paid for in whole or part by any federal health care program.
what it prohibits
What It Prohibits
  • Very broad statute covering:
    • Referrals of residents or services residents need
    • And purchasing, ordering, leasing
    • Or arranging for or recommending purchase, lease or ordering of services paid for by any federal health care program
    • In exchange for any item of value
      • Value is broadly defined and interpreted
criminal statute
Criminal Statute
  • Prison time, criminal fines, exclusion from federal health care programs
  • Potential basis for False Claims Act violation
  • Sanctions apply to all parties in transaction
    • Giver, receiver, “arranger” of payment for referrals
  • “Intent” to engage in prohibited act
    • Not necessarily intent to break the law
  • If even one purpose of transaction is to induce/reward referrals, that’s sufficient for violation
highly scrutinized transactions
Highly Scrutinized Transactions
  • Some transactions have characteristics that essentially lead OIG to presume illegal intent
    • Does facility or its representatives/affiliates provide anything of value to persons in position to influence or generate referrals of federal health care program business?
    • Does facility or its representatives/affiliates receive anything of value from persons for whom facility generates referrals of federal health care program business?
oig s recommended queries to spot aggravating factors
OIG’s Recommended Queries to Spot “Aggravating Factors”
  • Does arrangement have potential to skew or interfere with objective clinical decision-making?
  • Or have potential to increase costs to federal health care program?
  • Or increase risk of over-utilization or inappropriate utilization (e.g., not medically necessary)?
oig s recommended queries to spot aggravating factors1
OIG’s Recommended Queries to Spot “Aggravating Factors”
  • Or raise patient safety or qualify of care concerns
  • If arrangement involves appropriate & medically necessary services, is payment made or received consistent with fair market value for similar services?
the safe harbors
The “Safe Harbors”
  • Transactions that fit squarely within one of these will not be prosecuted even if may otherwise seem prohibited by statute
  • See list in our materials at www.ahcancal.org
  • If it doesn’t fit, they don’t have to acquit
  • Must then prove lack of illegal intent or other elements of a kickback offense
  • Risk of heightened scrutiny for these
help me i m confused
Help Me! I’m Confused!
  • Re the Anti-Kickback Statute
    • Ensure your employees are aware of a general prohibition on items of value exchanging hands between actual or potential referral sources
      • In either direction or through third parties
    • Ensure all such arrangements are in writing and reviewed by legal counsel
    • When possible, fit it within a safe harbor
    • All transactions at fair market value (unless permissible discount applies)
    • When in doubt, don’t
sub risk areas under the anti kickback statute
Sub-Risk Areas Under the Anti- Kickback Statute
  • OIG has identified several specific types of transactions with heightened risk under the statute
  • We’ll cover several over next couple of webinar sessions
  • Today, begin with:
    • Free goods and services
    • Services contracts (physician services & non-physician services)
strategic direction
Strategic Direction
  • Align Compliance Goals with Business Objectives
  • More Doing; Less Checking
    • Decision Support
    • Consultation
    • Training & Education
  • Getting to YES
    • Identify and remove barriers to compliance
    • Find solutions to business problems
compliance business asset or necessary evil
ComplianceBusiness Asset or Necessary Evil?
  • Compliance ensures that Golden Living & Affiliates have the appropriate risk and control framework in place to minimize risks
what risks









Market Evolution

Brand Image & reputation

Technology Innovation

What Risks?
schizophrenic role of compliance department
Schizophrenic Role of Compliance Department
  • Old View: Compliance is Best Procured by Vigorous Enforcement, Oversight
    • Police function
    • Militaristic Adherence to rigid rules and regs
    • Enforcement will produce compliance - if only there were enough resources to get the job done
    • Tattletale
    • Shadow Effects; Second Guessing
    • Learned Helplessness, Disincentives
old thinking
Old Thinking
  • “We’ve always done it this way…”
  • “Our hands are tied…”
  • “Learned helplessness”
  • “…A moose around your neck…”
corporate compliance programs a work in progress
Corporate Compliance Programs – A Work in Progress
  • Why the Supplemental Guidance Helps a CCO
    • Compliance programs are a work in process
      • Changed circumstances
      • New developments
      • Employee turnover
      • New leadership direction
risk areas
Risk Areas
  • The Federal Anti-Kickback Statute
    • Free Goods and Services
    • Service Contracts
      • Physician Services
      • Non-physician Services
federal anti kickback statute
Federal Anti-Kickback Statute

Establishes criminal penalties for

Offering OR providing OR receiving


For the referral of business paid for

By Federal healthcare programs

aks anxiety
Tends to ensnare harmless or even beneficial business arrangements

Implications for healthcare reform efforts?

Joint ventures or relationships intended to increase efficiency and produce cost-savings may induce referrals

May also induce underutilization

Uncertainty of enforcement

Priorities of the local US Attorneys Office

Personality of the particular prosecutor

Uncertainty of the enforcement climate

AKS Anxiety
what is remuneration

Can be anything of value




Expensive dinners

Free or below fair market value services or rent

Event tickets

Also implicated

Rental payments

Number of Medical Directors

Routine waiver of co-payments

Pricing arrangements for goods and services

“value added” services

Bundled payments

What is Remuneration?
the one purpose test
The “One Purpose Test”
  • If any intent of giving anything of value is to induce a referral it is a crime
    • "knowingly and willfully"
    • "to induce" or "in return for" referring or arranging for program-subsidized business.
  • Proof may rest on a lone email about expected revenue benefits of a deal or relationship
  • Must be able to defend the business purpose for why you provided a referral source with any item of remuneration.
defensible arrangements
Defensible Arrangements
  • Fit exactly into a “safe harbor”


  • Are Clinically sound
  • Arm’s length
  • Based on FMV
contracting issues
Contracting Issues
  • Legitimate need for the services
  • Services actually performed & documented
  • FMV- $$$ not related to value or volume of referrals; commensurate with skills, experience
  • Arm’s length transaction
    • no conflicts of interest;
    • manner of selection;
    • ability to influence referrals
kickbacks in sheep s clothing
Kickbacks in Sheep’s Clothing
  • “Value added” services
  • Bundled services
  • De minimus payments or gifts
  • Other excuses
    • Our hands are tied
    • Everybody else is doing it!
from compliance to commitment
From Compliance to Commitment
  • The Best Approach to Compliance is to Minimize the Need for It
    • More Intelligent Use of Data
      • Dissemination of Information
      • Evidence-Based Practices, CPGs
      • Education
      • Partnerships
      • Negotiation
    • Alignment of Information Systems
    • Compliance visibility; Decision support; consultation