Hancock, Daniel & Johnson, P.C., P.O. Box 72050, Richmond, VA , ,

Transcription

1 Hancock, Daniel & Johnson, P.C., P.O. Box 72050, Richmond, VA , , Hancock, Daniel & Johnson P.C. hancockdaniel.com

2 Fraud and Abuse Enforcement 1.Anti-kickback Statute 2.False Claims Act / CMP 3. Stark Law 2

3 Federal Anti-Kickback Statute 42 U.S.C. 1320a-7b(b) Criminal statute requires intent May not knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program (e.g., hospital payments to referring physicians). Safe Harbors: - Transactions that fit within Safe Harbors are immune, regardless of intent. - Failure to fall within a safe harbor does not necessarily mean that the conduct is prohibited by the anti-kickback statute. - NEW: 10 years up to $100k! 3

4 False Claims Act 31 U.S.C FCA imposes civil liability upon any person who, among other things: - knowingly presents, or causes to be presented a false or fraudulent claim for payment or approval; - knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim (applies retroactively to remove intent requirement); or - knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the government. $10,957 - $21,916 fine per false claim, treble damages, possible exclusion. 4

5 Civil Monetary Penalties Law 42 U.S.C. 1320a-7a Imposes civil liability related to: - Improperly filed claims (false statements, information, records, omissions; - Inducement to beneficiaries; - Payments by a hospital to physicians to reduce or limit services; - Arrangements with excluded providers; and - Failure to grant HHS/OIG with access to records. $20,000-$30,000 fine per incident; treble damages, exclusion. Higher fines if kickback issues are involved. 5

6 Whistleblowers Qui Tam actions. Original source of incident. Anti-retaliation protection broadly applies even if no qui tam is filed under FCA. Government may intervene. Relators receive 15-30% of judgment. 6

7 Virginia Practitioner Self-Referral Act Va. Code Ann , et seq. Limited to ownership arrangements. Broader than DHS. All payors. Follows Stark exceptions. Includes other exceptions. 7

8 Ethics in Patient Referrals Act Stark Law Enacted U.S.C. 1395nn 42 C.F.R et seq. 8

9 The Stark Referral Prohibition If a physician (or his/her immediate family member) has a financial relationship with an entity that provides designated health services ( DHS ), then: - The physician may not refer DHS to the entity for which payment may be made by Medicare; and - The entity may not bill Medicare for any DHS referred by the physician - Unless the financial relationship falls within an exception. 9

10 Stark Penalties Denial of payment for any services rendered by an entity in violation of Stark Civil monetary penalties. Exclusion from Medicare/Medicaid. Penalties from other laws (FCA). 60 days to refund overpayment. 10

11 The Analysis Begins Is a physician involved? Does the physician refer Medicare beneficiaries for DHS? Is there a financial relationship with an entity that furnishes DHS? Does an exception apply? 11

12 What is a referral? A request by a physician for an item or service payable under Medicare including: - The request by a physician for consultation with another physician. - Any test or procedure ordered, performed or under the supervision of the consulting physician. - A request by a physician for the establishment of a plan of care that includes the provision of DHS. - Certifying or re-certifying the need for DHS. 12

13 What does not constitute a referral? Services personally performed by the referring physician. If (i) request is the result of a consultation initiated by another physician and (ii) the tests or services furnished by or under the supervision of the pathologist, radiologist or radiation oncologist (or a member of his/her group practice), the following are not considered referrals: - A request by a pathologist for clinical diagnostic laboratory tests or pathological examination services; - A request by a radiologist for diagnostic radiology services; or - A radiation oncologist for radiation therapy services. 13

14 Designated Health Services Designated Health Services ("DHS") include the following: - Hospital inpatient and outpatient services - Clinical laboratory services - Physical therapy, occupational therapy and speech-pathology services - Radiology services - Radiation therapy services and supplies - DME and supplies - Parenteral and enteral nutrients/supplies - Prosthetics and orthotics devices/supplies - Home health services - Outpatient prescription drugs 14

15 Financial Relationships Ownership or Investment Interest Compensation Arrangement Relationships may be direct or indirect 15

16 Group Practice Definition Allow for profit sharing and IOAS Exception Single legal entity At least two members providing full range of services Substantially all services of members furnished through group Members provide at least 75% of physician-patient encounters Overhead expenses/income distributed in accordance with previously determined methods Unified business 16

17 In-Office Ancillary Services Exception Applies to DHS that are ancillary to a physician s professional services provided by the physician s practice (excludes most DME and parenteral and enteral nutrients). To apply, the DHS must: - Be furnished by physician, another physician in group practice, or directly supervised by them - Be provided in: (1) same building in which physician provides some services unrelated to DHS; or (2) if group practice, can be a "centralized building - Billed by physician, group practice, an entity whollyowned by the group or a billing agent 17

18 Compensation Exceptions There are 25 compensation exceptions (42 C.F.R ) Key concepts/requirements - Compensation is fair market value. - Compensation is set in advance. Percentage-based compensation arrangements are currently permissible in some cases as long as formula is set forth in advance. - Compensation not based on volume or value of referrals. - Compensation is commercially reasonable. - There is a written arrangement. - Signed on or prior to effective date. 18

19 Frequently Used Compensation Exceptions In-Office Ancillary Services Exception Lease Arrangements (either space or equipment) Employment Personal Services Arrangements Fair Market Value ( catch-all ) 19

20 Space and Equipment Rental Written arrangement for duration of at least 1 year. Specifies the premises or equipment to be covered. Exclusive use by lessee. Rental charges set in advance, consistent with FMV and do not take into account the volume or value of referrals or other business generated. No per click. 20

21 Bon Fide Employment Requirements of exception: - The employment is for identifiable services. - Fair market value compensation. - Compensation not based on volume or value of referrals. - Compensation is commercially reasonable even if no referrals made to employer. Productivity bonuses are allowed - May include DHS that he/she personally performs. 21

22 Personal Service Arrangements Set out in writing and signed by all parties when or before it takes effect. Covers all of the services to be furnished (or crossreferences others). Services are reasonable and necessary for the legitimate business purposes of the arrangement. Duration of at least 1 year. The compensation is set in advance, does not exceed FMV. 22

23 Fair Market Value Compensation Regulatory. Set out in writing and signed by all parties when or before it takes effect. Covers identifiable services specified in the agreement. The aggregate services are reasonable and necessary for the legitimate business purposes of the arrangement. Timeframe specified in the agreement. The compensation is set in advance, does not exceed FMV. 23

24 Hot off the Press! CMS softens some Stark exceptions by regulation effective January 1, Bipartisan Budget Act of 2018 enacted February 9, Stark changes: A writing may be a collection of documents. Unlimited holdover (if exception is still met). 90 day rule on signatures. 24

25 Fair Market Value vs. Commercial Reasonableness 25

26 How Does Stark Define Fair Market Value? The value in arm s length transactions, consistent with the general market value. For assets, it means the market price at which bona fide sales have been consummated for like type assets in a particular market. 26

27 What is General Market Value? General Market Value is the price that an asset would bring as a result of bona-fide bargaining between well-informed buyers and sellers who are not otherwise in a position to generate business for the other party, or compensation that would be included in a service agreement, as the result of bona-fide bargaining between well-informed parties to the agreement who are not otherwise in a position to generate business for the other party, at the time of the agreement. 27

28 Fair Market Value for Real Estate The value of rental property for general commercial purposes (not taking into account its intended use). In the case of a lease of space, this value may not be adjusted to reflect the additional value the prospective lessee or lessor would attribute to the proximity or convenience to the lessor when the lessor is a potential source of patient referrals to the lessee. 28

29 Key FMV Points under Stark Referrals between the parties may not be considered. FMV is determined upon the sale or at the time the service agreement is executed. Local market conditions and facts/ circumstances of the arrangement may be considered (i.e., specialty, market conditions, locations, type of services, productivity, etc.). Ways to evidence FMV? 29

30 What is Commercially Reasonable? Many compensation exceptions under Stark require that payment be commercially reasonable even if no referrals were made between the parties. Commercial reasonableness looks to the reasonableness of the business arrangement in general. An arrangement is commercially reasonable if the agreement is a sensible, prudent business agreement, from the perspective of the particular parties involved, even in the absence of referrals. 30

31 What is Commercially Reasonable? These examples may not be commercially reasonable: - Paying for services when no services are rendered. - Having two medical directors who perform the same duties. - Paying a physician for questionable consulting services. - Renting equipment full-time when it is used only once a month. - Purchasing a building from a referring physician with no intention of using the building. 31

32 Documentation When FMV and/or commercial reasonableness are implicated, documentation is key. Consistent use of objective, statistically viable and relevant data. Rationale / methodology used to determine FMV should be clear and well documented show your work! Prospective, independent, expert valuation is typically the best approach. Nationally-recognized survey data are also used. Valuation reports should clearly and accurately describe the arrangement and all relevant facts. Account for changes in FMV over time. 32

33 Risk Management Operationalizing Directed referrals. Provision of insurance to physicians. Timesheets. Who controls scheduling? Supervision. Measurable Performance Metrics. Complexity. Can you as opposed to should you? Contract Management System. 33

34 Houston, We Have a Problem! Stop the bleeding. Diligence Identify the issues. Consistent Process. Document/Train. Policies (Implement, Enforce, Review, Revise) 34

35 Other Issues Voluntary Self-Referral Disclosure Protocol. 60 day window. Investigations. Enforcement Activity: - Tuomey Regional Medical Center - Halifax Hospital Medical Center - Adventist Health System Future of Stark? 35

36 Summary of Key Points Generally, no payment to physicians without a contract. Document FMV and commercial reasonableness. Payments based on services personally performed. Centralize contracting process. Can we actually operationalize this agreement? Implement the contract as written. Document work performed. Ask questions!! 36

37 Questions? Mike Newby Hancock Daniel