The Deficit Reduction Act, 2005

1. The Deficit Reduction Act, 2005

2. Deficit Reduction Act of 2005 In the Deficit Reduction Act of 2005 (DRA) Congress, for the first time, has mandated healthcare providers to have a compliance program. The federal government has, for many years, encouraged health care providers to have compliance programs, built on the federal sentencing guidelines. Under the DRA, a compliance program is now a requirement for all providers or organizations that pay out over $5 Million in Medicaid payments each year.

3. The Deficit Reduction Act – Requirements To comply with the DRA, as it is written, healthcare entities must: • Provide Education: Educate employees regarding- • Federal False Claims Act (FCA) • Michigan False Claims Act • Whistleblower provisions

4. The Deficit Reduction Act - Requirements • Establish Policies/Procedures: Develop written policies/procedures for all employees, contractors and agents regarding- • Detailed information about the False Claims Act • Whistleblowers protections • Detection and prevention of fraud and abuse

5. The Deficit Reduction Act - Requirements • Include in any employee handbook* specific information regarding- • Fraud and abuse • An employee’s rights to be protected as a whistleblowers • The agency’s policies/procedures for detecting and preventing fraud and abuse *A handbook is defined as an organized area within the agency that defines the compliance expectations and is readily available to all employees. Our “handbook” information is located within the policies and within the compliance plan both which are located on the “s” drive.

6. Current Efforts That Meet DRA Requirements - Education Methods of Education • Compliance Orientation Training • Annual Training • Ongoing Specialized Training Content of Education • False Claims Act information • 7 elements of compliance programs as defined in the Federal Sentencing Guidelines

7. Current Efforts That Meet DRA Requirements - Education Content of Education Continued • Compliance Policy and Procedure • Internal processes for reporting fraud and abuse including an anonymous hotline • Processes and procedures for detecting and preventing fraud and abuse • An Employees obligation to report any fraud or abuse

8. Current Efforts That Meet DRA Requirements – Policies & Procedures Policies & Procedures • Compliance Plan • Code of Conduct • Reporting of Potential Compliance Violations • Billing & Claims Submission • Auditing & Monitoring

9. Current Efforts That Meet DRA Requirements – Employee Handbook Information relative to fraud and abuse, whistleblowers’ protections and detecting and preventing fraud and abuse is available: • On the agency shared “s” drive within the Compliance Plan. Go to the “s” drive, click on the folder titled “Organizational Plans” and click on “2006 Compliance Plan” • This information will also be available within our new website

10. DRA Training – Federal False Claims Act • First signed into law in 1863 in the wake of Civil War profiteering, the FCA imposes civil penalties for making false claims to the government • Anyone who violates the FCA is liable for a civil penalty of $5,500 to $11,000 per claim, plus three times the amount paid • A person violating the FCA can be liable for the costs of a civil action brought to recover any penalties or damages

11. DRA Training – Federal False Claims Act • Violators can be excluded from participating in Medicare, Medicaid, and other government programs • Federal criminal enforcement for intentional participation in the submission of a false claim

12. DRA Training – Federal False Claims Act The False Claims Act applies when an organization or person: • Knowingly presents the government with a false claim for payment • Knowingly makes a false statement to get a fraudulent claim paid • Conspires to defraud the government by getting a false claim paid by the government • Knowingly makes a false record or statement to conceal, avoid, or decrease an obligation to pay the Government, • “Causes” a false claim to be submitted

13. DRA Training – Federal False Claims Act The False Claims Act Defines: • “Knowingly”, as the “reckless disregard” to the truth or falsity of the claim. • The language is intended to prevent the submission of a claim in “deliberate ignorance” of its propriety.

14. DRA Training – Federal False Claims Act Protections for People Who report false claims: • Anyone who lawfully acts to report false claims is protected from: discharge, demotion, suspension, threats, harassment, and discrimination.

15. DRA Training – Michigan False Claims Act • Authorizes the attorney general to investigate alleged violations of this act • Provides for civil actions to recover money received by reason of fraudulent conduct • Provides for certain civil fines; and prescribes remedies and penalties

16. DRA Training – Michigan False Claims Act • Prohibits fraud in the obtaining of benefits or payments in connection with the Medicaid program • Prohibits kickbacks or bribes in connection with the Medicaid program • Prohibits conspiracies in obtaining benefits or payments

17. DRA Training – Michigan False Claims Act • An employer shall not discharge, demote, suspend, threaten, harass, or otherwise discriminate against an employee who initiates, assists, or participates in a legal proceeding under the act

18. DRA Training – Whistleblowers’ Protection Act • A law that provides protection to employees who report a violation or suspected violation of state, local, or federal law • Provides protection to employees who participate in hearing, investigations, legislative inquiries, or court actions; and to prescribe remedies and penalties.

19. DRA Training – Whistleblowers’ Protection Act • An employer shall not discharge, threaten, or otherwise discriminate against an employee because the employee reports or is about to report a violation • An employer shall post notices and use other appropriate means to keep employees informed of Whistleblowers’ protections

20. DRA Training – Fraud and Abuse Defined • Fraud is defined as “an intentional deception or misrepresentation by a person with the knowledge the deception could result in unauthorized benefit to him/herself or some other person • Abuse is defined as “practices that are inconsistent with sound fiscal, business or medical practices, and result in an unnecessary cost to the payor, or in reimbursement for services that are not medically necessary or fail to meet professionally recognized standards for healthcare

21. What Now? • This really isn’t anything new. This legislation (False Claims and Whistleblowers’ Protection Acts) has been in place for years. • Postings will be located in the lounges • We provide education as required

22. What Now? • We have a compliance program, which includes a plan, policies/procedures, and a method for detecting and preventing fraud & abuse • If you have lost or misplaced your copy of the Compliance Plan we will be happy to provide you another one. It is also available on the “s” drive within the folder titled “Organizational Plans”.

23. Reporting Compliance Concerns • Talk to Sue Germann, extension 232 or sgermann@pinesbhs.org • Talk to a member of the Compliance Committee (Management Staff and Mr. John Swanson, Board Chair) • Call the Hotline: 1-800-624-5215

24. Remember…. When in doubt, point it out!

25. Attestation Form • The attestation form acknowledges your obligation to report and attests that you have received training on the DRA and understand your obligation to report any issues of which you are aware • This is to be signed and submitted to the Compliance Officer