Health Care Reform Update: Impact on Providers, Payors and Compliance

Transcription

1 Health Care Reform Update: Impact on Providers, Payors and Compliance Kenneth Zeko (KPMG LLP) Daniel E. Gospin (EpsteinBeckerGreen) February 18, 2011 HCCA Southwest Regional Conference Dallas, TX 1

2 Overview of Presentation 1. Impact of Health Care on Providers and Payors 2. Compliance Implications in a Post Reform World 2

3 Impact of Health Care Reform and Mandatory Compliance 3

4 Impact of Reform on Fraud & Abuse Reducing fraud, waste and abuse is at least one mechanism to fund reform. Since 1997 the national Health Care Fraud and Abuse Control Program has returned approximately $15.6 billion to the Medicare Trust Fund (HHS/DOJ Health Care Fraud and Abuse Control Program 2009 Annual Report) FY 2009: Federal government won or negotiated approximately $1.63 billion in judgments and settlements in health care fraud cases. (HHS/DOJ Health Care Fraud and Abuse Control Program 2009 Annual Report) OIG reported savings and expected recoveries of more than $25.9 billion for 2010 (OIG press release, Dec. 15, 2010) 4

5 Mandatory Compliance Where we are today? Patient Protection and Affordable Care Act signed into law on March 23, 2010 Health Care and Education Reconciliation Act of 2010 signed into law on March 30, 2010 Section 6102 of PPACA mandates accountability requirements for SNFs and Nursing Facilities, including compliance and ethics programs Section 6401 of PPACA mandates compliance programs Medicare/Medicaid/CHIP providers/suppliers as condition of enrollment 5

6 Significant PPACA Fraud and Abuse Provisions Increase Funding to Fight Fraud and Abuse More than $300M over 10 years with 1/3 allocated to the 2011 budget Increases and additions to Civil Money Penalties / Amendment of Federal Sentencing Guidelines More stringent screening requirements for providers/suppliers enrolling in Federal programs Mandatory Compliance Programs Reporting Obligations to HHS Overpayments within 60 days of identification Expanded use of RACs Medicare Part C, Part D and Medicaid April 1, 2011 implementation date for Medicaid RACs Amendments to AKS and Stark Law 6

7 PPACA Requires Amendment of Federal Sentencing Guidelines Section 10606(a)(2)(C) of PPACA U.S. Sentencing Commission must amend Guidelines related to health care offenses involving Federal health care programs to increase minimum sentences Required amendments enumerated regarding how government will determine loss to Federal health care program and sentence defendant accordingly 2 to 4 level increases in offense levels for defendants convicted of offense involving losses starting at $1M and ranging to $20M. Relevance: Guidelines continue to serve as model for development of compliance programs; Aggressive enforcement underscored 7

8 Mandatory Compliance Current Sources of Mandated Compliance Corporate Integrity Agreements Mandated compliance programs for Medicare Advantage and Part D (72 FR 68700) Mandated compliance programs for Federal contractors (FAR ) Mandated effective compliance programs for NY Medicaid providers (18 NYCRR 521) Mandated repayment of Medicare/Medicaid overpayments (PPACA) Mandated compliance programs for SNFs and Nursing Facilities (PPACA) 8

9 Mandatory Compliance A Deeper Dive Section 6102 of PPACA (SNF/NF) Required components for compliance and ethics programs enumerated -- track Federal Sentencing Guidelines and OIG guidance Regulations to be promulgated by Secretary of HHS (working with OIG) no later than 2 years after enactment Regulations may include a model compliance program In the case of an organization that has 5 or more facilities, the formality or elements of program will vary with size of organization Not later than 3 years after effective date of regulations, Secretary must complete an evaluation to determine if programs led to changes in deficiency citations, changes in quality performance or quality of care Secretary must submit a report to Congress after evaluation 9

10 Mandatory Compliance A Deeper Dive Section 6401 of PPACA (Other Medicare/Medicaid/CHIP suppliers/providers) Compliance program must contain core elements to be determined by Secretary Implementation date for core elements and date providers/suppliers required to have compliance program in place to be determined by Secretary Secretary to determine scope of requirement for particular industry sector 10

11 Mandatory Compliance A Deeper Dive Section 6401 Core Elements Sept. 23, 2010: CMS published a proposed rule requesting comments related to Section 6401 requirements (75 FR 58204) Comments have already been submitted Request for comments related to: Use of Federal Sentence Guidelines (FSG) as basis for core elements Extent to which FSG elements have already been incorporated into programs Other suggestions for core elements Costs/benefits of implementing programs and what systems are in place to monitor effectiveness Extent to which outside consultants are used Reasonable timeline for establishment of required compliance program for various types and sizes of providers/suppliers assuming FSG elements used 11

12 Ensuring Effectiveness Foreshadowing of What s to Come New York Mandatory Compliance Program Every provider receiving more than $500,000 per year must have, and certify to, an effective compliance program with eight mandatory elements (18 NYCRR 521) Written policies/procedures Designate a compliance officer Training and education Open lines of communication for reporting Disciplinary policies to encourage good faith participation in program System for routine identification of compliance risk areas (auditing/monitoring) System for responding to compliance issues Policy of non-intimidation and non-retaliation 12

13 Ensuring Effectiveness New York Foreshadowing of What s to Come New York Mandatory Compliance Program Certification to NY OMIG of effective compliance program required as of 12/31/09 OMIG has developed a Compliance Program Assessment Tool for evidencing the existence of an effective compliance program Available online at,

14 Impact of Reform on Payors The legislation fundamentally reforms the insurance market both in changing the system for the insured and providing access to the uninsured: State health insurance Exchanges (for individuals and small employers up to 100 employees) estimated to provide coverage to 24 million New coverage alternatives, such as COOPs and benefit plan levels 14

15 Impact of Reform on Payors Effective 2010: Lifetime caps ended Children up to age 26 covered on their parents policies and up to age 19 obtain coverage with no pre-existing condition exclusions Prohibition on rescissions except in the case of fraud or intentional misrepresentation New rate review authority process established Effective 2011: Establishment of standard MLRs for all plans Uniform health plan documents created Effective 2014: Guarantee issue coverage for all No exclusions for pre existing conditions Minimum, essential benefits and standard benefit offerings Insurance industry annual tax begins Effective 2018: High value plan excise tax begins 15

16 Payor Challenges/Opportunities Medicare Benefit Changes Beginning in 2011, Medicare beneficiaries are covered for annual wellness visit providing a personalized prevention plan based on a health risk assessment (HRA) with no co-payment or deductible Beginning in 2011, removes cost sharing for immunizations, screening and preventive services Additional efforts to better coordinate care such as: Federal Coordinated Health Care Office (CHCO) to more effectively coordinate care for dual eligible's Center for Medicare and Medicaid Innovation (CMI) to test innovative models Medicare shared savings program for ACOs FFS hospital readmissions reduction program 16

17 Payor Challenges/Opportunities Reducing Fraud, Waste and Abuse Requires new provider screening standards for participation in Medicare, Medicaid and CHIP Physicians must provide documentation for referrals to high risk providers or programs (2010) Requires face to face encounter to order home health or DME services (2010) Increases penalties for false claims act violations. Expands violations to Parts C and D, including for enrolling or transferring individuals without their consent, for marketing violations (2010) Expands the Recovery Audit Contractors (RAC) program to Medicaid and Medicare Parts C and D by January 1, RACs must confirm MA or Part D plans have an anti-fraud program in place, examine claims for reinsurance under Part D and review estimates of high cost beneficiaries submitted to the Secretary. Requires a new integrated data repository for Medicare, Medicaid, CHIP, TRICARE, SSA and the Indian Health Service to match records and identify potential fraud or waste. 17

18 Compliance Implications in a Post Reform World 18

19 Establishing Effectiveness: Background Understand the Compliance Program Dynamic and evolves over time Remember one size does not fit all Ask questions re: structure and operation of the program Look to recent CIAs/OIG guidance/fed. Sentencing Guidelines/State Medicaid IG guidance for gov t views on what is necessary 19

20 Effective Compliance: Little Steps Big Journey Focus on the existing program Are the elements in place? Tone at the top vs. stealth compliance Interaction between compliance and other departments What works? What needs to be improved? Can you answer yes to the Federal Sentencing Guidelines? 20

21 Effective Compliance: Little Steps Big Journey Focus on the existing program Reward departments for existing achievements Tweak or improve upon areas in need Create that which doesn t exist Update or create web page Contemplate future trends 21

22 Establishing Effectiveness: Nuts & Bolts Look to OIG s Compliance Program Guidance (industry specific) / Federal Sentencing Guidelines for framework for effectiveness review -- 7 elements: 1. Written standards and procedures 2. Governance and infrastructure 3. Education and training 4. Effective lines of communication / reporting 5. Disciplinary guidelines 6. Auditing, monitoring reporting systems 7. Corrective action 22

23 Establishing Effectiveness: Nuts & Bolts Create the big book 8 elements, plus extra credit for: Data analytics Integrity surveys 3rd party reviews Return on investment consideration Repayments, self-disclosures, corrective action plans Compliance rewards 23

24 Establishing Effectiveness: The Issues Element Written standards and procedures Examples of Issues to Consider When Evaluating Effectiveness 1) Do the company s policies/procedures address known risk areas, including those described in OIG Compliance Guidance for industry sector (if applicable)? 2) Are standards drafted so that they can be understood by every employee? 3) How are the policies/procedures distributed? 24

25 Establishing Effectiveness: The Issues Element Governance and infrastructure Examples of Issues to Consider When Evaluating Effectiveness 1) Does CCO have adequate resources to perform his/her function? 2) Is there a standardized process in place for the CCO to report to the Board on a regular basis? 3) Is there a Board subcommittee responsible for monitoring program? 25

26 Establishing Effectiveness: The Issues Element Education and training Examples of Issues to Consider When Evaluating Effectiveness 1) What training mechanisms are in place, who is trained and how often? 2) What content is contained in the training modules and is it department-specific (e.g., billing employees trained on different topics than admin. staff)? 3) Are training sessions and attendance documented? 26

27 Establishing Effectiveness: The Issues Element Disciplinary guidelines Examples of Issues to Consider When Evaluating Effectiveness 1) Is disciplinary action applied uniformly across all levels of the company? Corrective action 1) Is a system in place to track compliance questions, potential compliance issues and the resolution of such issues? 2) Is action commensurate with violation? 27

28 Establishing Effectiveness: The Issues Element Effective lines of communication and reporting Examples of Issues to Consider When Evaluating Effectiveness 1) Is reporting system conspicuously advertised for use by employees or others? 2) How are reports of misconduct handled and what is investigation timeframe? 28

29 Establishing Effectiveness: The Issues Element Auditing and monitoring Examples of Issues to Consider When Evaluating Effectiveness 1) Are audits (internal or external) conducted based on a work plan that sets forth the schedule and scope? 2) Do audits address industryspecific risk areas (e.g., business expenses associated with sales/marketing to referral sources non-monetary compensation limit under Stark)? 29

30 Establishing Effectiveness: The Product Review authorized by Board, performed by independent party Employ benchmarking techniques Initial review = control Subsequent reviews compared to measure improvement or noncompliance Product should reflect a review and analysis of relevant OIG compliance guidance for industry and Federal Sentencing Guidelines Recommend corrective action steps Report to Board or management 30

31 Establishing Effectiveness: Key Concepts Seek Out and Utilize Resources to Promote Program Strengthen relationships with associations Create thought leadership Utilize national conferences Increase visibility through speaking opportunities Utilize or create contacts within the industry to increase visibility and focus upon accomplishments Sell the mission Preach the vision 31

32 Establishing Effectiveness: Key Concepts Compliance as Strategic Business Partner Facilitate and provide guidance to operations Attend operational departments meetings Enable growth while identifying and mitigating regulatory risks Weigh regulatory risks with revenue opportunity Provide counterbalance to aggressive growth Foster dialogue 32

33 Establishing Effectiveness: Key Concepts Teaming Utilize existing committee structures Modify existing committees or create new ones where needed Ensure appropriate personnel are at the table Facilitate compliance team approach Interact with operational personnel Reach out and listen 33

34 Establishing Effectiveness: Key Concepts Growing the Compliance Office Establish relationships internally Build relationships with Board Participate in local compliance activities Speak throughout the entity Participate in CMS Open Door Forums and other free or inexpensive training opportunities 34

35 Q & A 35

36 Contact Information Kenneth Zeko, Esq. Director KPMG LLP Dallas, TX Daniel E. Gospin, Esq. EPSTEINBECKERGREEN Wells Fargo Plaza 1000 Louisiana, Suite 5400 Houston, TX