Disclaimer

1. Disclaimer This presentation is intended only for use by Tulane University faculty, staff, and students. No copy or use of this presentation should occur without the permission of Tulane University. Tulane University retains all intellectual property interests associated with the presentation. Tulane University makes no claim, promise, or guarantee of any kind about the accuracy, completeness, or adequacy of the content of the presentation and expressly disclaims liability for errors and omissions in such content.

2. TUMG Compliance Training Overview of Health Care Laws Anti-Kickback False Claims Act Stark Laws Sarbanes-Oxley Print the Overview of Health Care Laws Quiz before viewing presentation

3. Read Before Proceeding Physicians and Staff may earn one compliance credit by viewing this presentation, completing the assessment, and faxing the assessment to the University Privacy and Contracting Office: 504-988-7777 This presentation may be viewed for compliance credit only once in a fiscal year (July 1 - June 30). To check how many compliance credits you have and to see which training sessions you have completed, contact the University Privacy and Contracting Office at 504-988-7739

4. It is the policy of TUMG to provide healthcare services that are in compliance with all state and federal laws governing its operations and consistent with the highest standards of business and professional ethics. Education for all TUMG physicians is an essential step in ensuring the ongoing success of compliance efforts.

5. This education is a General Compliance Education Presentations available on the Tulane University Privacy and Contracting website: http://tulane.edu/counsel/upco/billing-ed • The other general compliance education presentations are: • Fraud and Abuse • TUMG Documentation Top 10

6. This presentation will provide a brief overview of four laws that pertain to healthcare practices Anti-Kickback Statute False Claims Act Stark Laws Sarbanes-Oxley Health Care law is expanding. Health care entities and providers must keep abreast of the latest regulations. Purpose of Presentation

7. The Federal Health Care Anti-Kickback Statute (Social Security Act §1128B(b), 42 U.S.C. § 1320a-7(b))

8. What is the scope of the Statute? • The Anti-kickback Statute is an “extremely broad criminal statute which provides penalties for individuals or entities that knowingly and willfully offer, pay, solicit or received remuneration in order to induce business for which payment may be made, in whole or in part, by a Federal health care program, including the Medicare and Medicaid programs.”

9. Remuneration includes but is not limited to: • Kickbacks, • bribes, • and rebates • made directly or indirectly, • overtly or covertly, • in cash or in kind

10. Examples of Anti-Kickback Violations Cash for patients: giving cash in exchange for the referral of patients covered by a Federal Health Care program

11. Examples of Anti-Kickback Violations Waivers of co-pays and deductibles: The routine waiver of Medicare Part B co-payments and deductibles violates the Anti-Kickback Statute. Nah…we don’t need your co-pay

12. OIG position on Waivers of Co-pays and/or Deductibles In addition to the Anti-Kickback Statute, the OIG (Office of the Inspector General) says that a provider, practitioner or supplier who routinely waives Medicare co-payments or deductibles is misstating its actual charge.

13. Waivers of Co-pays and Deductibles have consequences For example, if a supplier claims that its charge for a piece of equipment is $100, but routinely waives the $20 co-payment, the OIG considers that the actual charge is $80.

14. In addition, the Medicare recipient should be paying a lower co-pay. Medicare should be paying 80% of $80 ($64) rather than 80% of $100 ($80). As a result of the supplier’s misrepresentation of the charge, the Medicare program is paying $16 more than it shouldfor this item Waivers of Co-pays and Deductibles

15. Examples of Anti-Kickback Violations Medical Director agreements: If compensation is paid, even in part, for referrals covered by a Federal health care program, the Anti-Kickback statute may be violated.

16. Source: “This Week in Corporate Compliance” Vol. VI, No. 28 – August 11 2004 Published by the Health Care Compliance Association Anti-Kickback Indictments On August 4, [2004] US Attorney for the Southern District of Florida,Marcos Daniel Jiménez, announced the unsealing of a 324 count Indictment in Fort Lauderdale, Florida. Fourteen defendants... are charged with participating in a scheme to defraud Medicare of over $8 million. If convicted, the defendants face various statutory maximum sentences ranging from five (5) years’ imprisonment to twenty (20) years’ imprisonment per count, and face fines of up to $16 million. The Indictment alleges that three therapy companies …paid kickbacks to assisted living facilities and to patient recruiters for access to patients.

17. Penalties for Anti-Kickback Violations • Violation of the anti-kickback laws is a felony, punishable by a $50,000 fine plus three times the amount of remuneration paid, or imprisonment up to five years, or both. • Violation of the law could also mean the TUMG and/or a TUMG physician or other clinician is excluded from participating in the Medicare and Medicaid programs for up to five years. • Source: Tulane University Health Care Compliance Policy Manual

18. The False Claims or Qui Tam Act • Signed into law in 1863 during Abraham Lincoln’s term of office, the False Claims Act was significantly changed in 1986 to make it a more effective tool for prosecuting and obtaining judgments for filing false or fraudulent claims.

19. Conspires with others to get a false or fraudulent claim paid by the Federal Government Knowingly uses (or causes to be used) a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Federal Government. The False Claims Act applies when a person or company:

20. Knowingly uses (or causes to be used) a false record or statement to get a claim paid by the Federal Government Knowingly presents (or causes to be presented) to the Federal Government a false or fraudulent claim for payment. The False Claims Act applies when a person or company:

21. Lawsuits filed under the False Claims Act are often referred to as “Whistleblower” lawsuits.

22. The False Claims Act allows everyday people to bring suits against groups or individuals that are defrauding the government through programs, agencies or contracts

23. Statute ofLimitations for False Claims • Suits under the False Claims Act can be brought (whichever is the later date): • Within six years from the date of the illegal conduct, or • Within three years after the Government knows or should have known about the illegal conduct, but in no event later than ten years after the illegal activity.

24. What Money Can Be Recovered? • A person who initiates a False Claims Act lawsuit is entitled to a proportional share of the funds recovered for the government.

25. Protections for People Who Bring False Claims Act Cases • The False Claims Act protects anyone who lawfully acts in investigation of, initiation of, testimony for, or assistance in a False Claim. • The individual is protected against • discharge, demotion, • suspension, threats, • harassment, and discrimination.

26. Originally, most claims were against companies involved in the Military or Defense Industry. Over time, the focus shifted to health care companies. Now the source of claims is becoming more and more diverse. What Kinds of False Claims Cases Are Filed?

27. False Claims Settlements • Downey Regional Medical Center Settlement AnnouncedOn August 18, (2004) US Attorney for the Central District of California Debra W. Yang announced that Downey Regional Medical Center (DRMC), a 200-bed hospital located in Downey, California, has paid the United States more than $2.2 million to resolve allegations that the hospital submitted false claims to Medicare, the taxpayer-funded health care insurance program for many of the nation’s elderly and disabled. The settlement amount - which totaled $2,220,060 - is two times the loss suffered by the Medicare program. • Source: “This Week in Corporate Compliance,” Vol. VI, No. 30 – August 24, 2004, Health Care Compliance Association Publication

28. False Claims Conviction • On March 3, [2005] US Attorney for the Southern District of Florida Marcos Daniel Jiménez announced that two defendants were convicted by a federal jury, after a three-week trial… in Miami, Florida, bringing the total number of convictions to twelve (12), in a multi-million dollar Medicare fraud and money laundering scheme involving local durable medical equipment (DME) companies that fraudulently submitted false claims to Medicare with respect to expensive custom-made orthotic devices such as knee, shoulder, and hip braces. • Source: “This Week in Corporate Compliance,” Vol. VII, No.8–March 10, 2005Health Care Compliance Association Publication

29. Source: “This Week in Corporate Compliance, Vol. VI, No. 35 – October 4, 2004, Health Care Compliance Association Publication False ClaimsSettlements • On September 29 [2004] the Seattle Post-Intelligencer reported that the “University of Washington has lifted its objection to unsealing federal records compiled during a nearly five-year investigation into medical school billing practices.” • ”The records have been sealed since 1999, when a whistle-blower lawsuit sparked the Justice Department investigation. In the suit, former UW employee Mark Erickson accused the medical school of intentionally over billing Medicare and Medicaid.” • ”In April, the university paid $35 million to settle the suit and some records were unsealed.”

30. Stark Laws • Stark Laws, Phases I and II, pertain to physicians’ referrals to health care entities with which they have financial relationships.

31. The Stark Laws incorporate provisions of the Social Security Act into Medicare regulations Stark Laws

32. Section 1877 of the Social Security Act prohibits physicians from referring Medicare patients for certain designated health services (DHS) to an entity with which the physician or a member of the physician’s immediate family has a financial relationship unless an exception applies.

33. Section 1877 also prohibits an entity from presenting, or causing to be presented, a bill or claim to anyone for a DHS furnished as a result of a prohibited referral.

34. Phase I of the Stark Laws • Addresses section 1877 of the Social Security Act, paragraphs (a) and (b) regarding the general prohibition and the exceptions applicable to both ownership and compensation arrangements.

35. Phase II of the Stark Laws • Addresses statutory exceptions related to ownership and investment interests, the statutory exceptions for certain compensation arrangements, and the reporting requirements.

36. Recent Stark Case On August 6, [2004] US Attorney for the Eastern District of Pennsylvania Patrick Meehan announced a civil settlement between the United States of America and Leonard Ginsburg, M.D., Moore Eye Care, Retina and Diabetic Eye Specialists, ….that resolves alleged violations of the Stark law and the anti-kickback statute. This civil settlement arose out of a qui tam suit filed by a former office administrator for the Moore Eye Institute. Source: “This Week in Corporate Compliance,” Vol. VI, No. 28 – August 11 2004 , Health Care Compliance Association Publication

37. Sarbanes-Oxley (SOX)Act of 2002 • The purpose of the Sarbanes-Oxley Act is “To protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes.”

38. Sarbanes-Oxley Act of 2002 • Of the four laws discussed in this presentation, Sarbanes-Oxley is the newest. • It was enacted in response to recent financial disasters such as ENRON.

39. Health Care Company the first to test the new law • The Founder and Chief Executive of Health South Corp., Richard Scrushy, was the first individual indicted under the Sarbanes-Oxley law. • Scrushy was found not-guilty on all indictments against him.

40. Overview of SOX • Signed into law July 30, 2002. • The most dramatic change to federal securities laws since the 1930’s.

41. Sarbanes-Oxley: • Radically redesigns federal regulations of public company corporate governance and reporting obligations.

42. Sarbanes-Oxley: • Significantly tightens accountability standards for directors and officers, auditors, securities analysts and legal counsel.

43. Key Change • As of April 26, 2003, the SEC has directed the NYSE and NASDAQ to prohibit listing any public company whose audit committee does not comply with new requirements regarding auditor appointment, compensation and oversight.

44. Sarbanes-Oxley will have direct impact on any public health care company SOX

45. Summary

46. Anti-Kickback Statute • Three areas of direct risk for providers • Cash for patient referrals (either giving or receiving remuneration) • Waiver of co-pays and deductibles • Medical Director Agreements

47. False Claims Act Often referred to as Whistleblower or “Qui Tam” lawsuits

48. False Claims Act • Violations involve: • Knowingly filing fraud claims • Knowingly submitting a fraudulent record or statement to receive payment for a claim • Knowingly conspiring with others to get a fraudulent claim paid by the government • Knowingly using (or causing to be used) a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Federal Government

49. Stark Laws, Phases I and II • pertain to physicians’ referrals to health care entities with which they have financial relationships.

50. Sarbanes-Oxley: • New Law (2002) which addresses issues regarding financial reporting and responsibilities of boards of public companies.