Arrangements Compliance Training: Initial Training

Transcription

1 Arrangements Compliance Training: Initial Training Presented by King s Daughters Medical Center

2 Why Compliance Matters The Medical Center is dedicated to providing quality, costeffective health care while complying with all applicable state and federal laws. To evidence this dedication, the Medical Center s Board of Directors adopted, developed and implemented its Corporate Compliance Plan. This Plan is based on the U.S. Department of Health and Human Services Office of Inspector General ( OIG ) Compliance Program Guidance for Hospitals and the United States Federal Sentencing Guidelines. The Corporate Compliance Plan is intended to be a part of the fabric of the Medical Center s routine operations. The Medical Center endeavors to communicate to all team members its intent to comply with applicable law through the Corporate Compliance Plan.

3 Why Compliance Matters Through the Compliance Plan, the Medical Center will: Routinely assess the Medical Center s business activities and consequent legal risks; Provide education and training on compliance and healthcare requirements; Implement monitoring and reporting functions; and Include enforcement and discipline components that ensure that each person take their compliance responsibilities seriously. Overall responsibility for operation and oversight of the Corporate Compliance Plan belongs to the Board; however, the day-to-day responsibility for operations and oversight of the Plan rests with the Compliance & Integrity Department.

4 The Cost of Medicare Each working day Each month Each year Medicare pays over 4.4 million claims To 1.5 million providers Worth $1.1 billion Medicare receives almost 19,000 provider enrollment applications Medicare pays over $430 billion for more than 45 million beneficiaries

5 Annual Health Care Spending in U.S. Health care spending in 2020 is projected to reach $4.64 trillion, accounting for 19.8% of GDP. Lost to fraud: 3% - 10% ($69 billion - $230 billion).

6 Fighting Fraud is a Good Investment OIG Reports $6.9 Billion in recoveries among FY 2012 accomplishments $923.8 million in audit receivables $6 billion in investigative receivables $8.5 billion in estimated savings resulting from legislative, regulatory, or administrative actions that were supported by our recommendations Excluded 3,131 individuals and entities in FY criminal actions against individuals or entities 367 civil actions

7 Fighting Fraud is a Good Investment Government continues to view Fraud, Waste, and Abuse as a significant source of revenue The return-on-investment (ROI) for Health Care Fraud and Abuse Control (HCFAC) program For the life of the program (since 1997), $5.40 returned for every $1.00 expended. 3-year average ( ), $7.80 returned to every $1.00 expended

8 Fraud and Abuse Fraud: Theft by deception Claiming payment for a service you did not deliver Abuse: Gaming the system Accepting a payment in exchange for referrals

9 Potential Perpetrators of Fraud and Abuse Health care professionals Suppliers of equipment and drugs Corporate officers and administrative personnel Billing and coding personnel Marketing and sales representatives Organized crime

10 The Office of the Inspector General Mission: Overseeing and ensuring efficiency and integrity of 300+ programs of the Department of Health and Human Services and the beneficiaries of those programs Significant Focus: Medicare and Medicaid Fraud and Abuse: Top Priority of the OIG

11 Office of Inspector General:

12 OIG Work Plan A road map to determine audit and review plan for the year OIG 2014 and 2015 focus on quality and physician services

13 Federal Fraud and Abuse Laws False Claims Act Federal Anti-kickback Statute Physician Self-Referral Law Civil Monetary Penalty Law

14 Over-utilization Government Concerns Increased program costs Corruption of medical decision-making Unfair competition

15 FALSE CLAIMS ACT

16 False Claims Act Overview Governed by 31 U.S.C Civil War vintage (1863) known as Informer s Act or Lincoln Laws Initially directed at procurement fraud and price gouging Became popular tool for combating fraud in 1986 when its scope greatly increased by statutory amendments Since 1986 over $178,000,000,000 recovered in health care cases

17 False Claims Act Prohibitions Prohibits the knowing submission of false claims or the use of a false record or statement for payment with government funds Covers claims presented to any health care program funded in whole or in part by federal funds Knowing includes actual knowledge, deliberate ignorance and reckless disregard for the truth or falsity of the information Applies to individuals and corporate entities

18 Your Responsibility Be sure documentation is clear, complete, timely and accurate prior to submitting claims for reimbursement by Medicare, Medicaid or any other governmental payor; Be sure services provided are medically necessary and meet applicable National Coverage Determinations (NCD)/Local Coverage Determinations (LCD); Develop and implement monitoring and auditing programs; Participate in compliance training programs

19 False Claims Act Penalties/Consequences Monetary penalties of between $5,500 and $11,000 per claim, plus 3 times the damages sustained by the government Possible exclusion of violators from participation in the federal health care programs and from employment by entities receiving federal health care funds Professional license sanctions Loss of entity accreditation/certification

20 False Claims Act Penalties/Consequences To illustrate the financial impact of a false claim act monetary penalty, let s assume ABC Medical Center had 536 claims which were deemed to be false claims. The government assigned the lowest value for the penalty - $5,500 per claim. This equates to $2,948,000 (536 claims x $5,500). The government added the 3 times multiplier. Therefore, the financial impact of the false claims is $8,844, ($2,948,000 x 3).

21 Practical Tips Two significant concerns for facilities The completeness, timeliness, and accuracy of the medical record Accurate coding of services and/or data submission Both are compliance issues that can be addressed through education, auditing and monitoring Education, auditing and monitoring are all parts of an effective compliance plan

22 ANTI-KICKBACK STATUTE

23 AKS Overview 42 U.S.C. 1320a-7b(b) Prohibits purposeful payments to get federal health care program business Criminal statute - intent matters

24 AKS Prohibited Activities The Anti-Kickback Statute (AKS) is designed to prevent: Overutilization Increased costs Corruption of medical decision-making Patient steering Unfair competition

25 AKS Elements Elements: Remuneration (Remuneration is the compensation that one receives in exchange for the work or services performed) Offered, paid, solicited, received To induce or reward referrals of Federal health care program business (including Medicare Advantage) Knowingly and willfully Case-by-case approach One purpose test (The one purpose test states that a payment or offer of remuneration violates the Anti- Kickback Statute so long as part of the purpose of a payment to a physician or other referral source by a provider or supplier is an inducement for past or future referrals)

26 AKS Penalties Jail, criminal fines, or both Civil Monetary Penalties - $50,000 per kickback plus 3x the remuneration Exclusion False Claims Act liability

27 What To Look For Financial arrangement or non-cash inducement between party that has referrals and party that wants them Remuneration (means more than just cash) Follow the money and the referrals

28 Remuneration Remuneration is anything of value Examples include, without limitation Increased compensation Free or below market value goods or services For example: Free office space or equipment Gifts For example: Sporting event/entertainment tickets, dinners Cash or in kind In kind: Goods or services offered below fair market value Tangible or intangible Intangible: Preferential allocation of operating room time can be an opportunity to earn income

29 Federal Health Care Programs Federal health care programs include without limitation: Medicare Medicaid TRICARE CHAMPUS SCHIP

30 Fair Market Value Fair Market Value (FMV) is an elusive concept Not a legal issue but has legal implications Consider need for valuation consultant Generally not one number but a range Willing buyer/willing seller? Government is increasingly willing to challenge FMV of compensation

31 Intent The purpose of the offer or acceptance of remuneration is relevant in determining a violation Appropriate Purposes: Increase in quality of care Increase in patient satisfaction Inappropriate Purposes: Inducement of referrals The OIG and most Federal courts adopt the one purpose test : even if there are other legitimate reasons for the payment, if just one purpose is to induce referrals, it is illegal

32 Knowingly & Willfully Intent standard settled by Affordable Care Act (ACA) Historically the standard ranged from requiring an intent to commit the act to an intent to violate the anti-kickback statute (Hanlester*) ACA rejects Hanlester* No specific intent required *The court ruled in the Hanlester Network v. Shalala case that the statute is not violated unless the defendant knew the law prohibited the giving or receiving of remuneration in return for referrals and acted with specific intent to violate the statute

33 Referral There is no definition of referral in Anti-Kickback Law A recommendation is probably sufficient

34 In Return for Referring Most courts adopt the one purpose test : even if there are other legitimate reasons for the payment, if just one purpose is to induce referrals, it is illegal In the Massachusetts state case, Bay State Ambulance, the 1st Circuit defined the primary purpose test - Referrals must be the primary purpose of the remuneration; not enough to be a minor purpose or incidental benefit

35 Offers, Pays, Solicits, Receives Remuneration Paying a kickback is illegal Accepting a kickback is illegal Both sides can violate the statute, but an offer made with nefarious intent is not necessarily accepted with the same mindset Payment need not actually be made for the law to be violated; an offer or solicitation is enough

36 Inducing, Recommending, Arranging For The kickback prohibition is very broad Inducing referrals or purchases of items or services paid for with Federal health care program dollars Price discounts have been interpreted to be within the scope of the statute Arranging for purchase or sale again, very broad language Even includes traditional marketing activities

37 Exceptions and Safe Harbors A safe harbor is a provision of a statute or a regulation that specifies that certain conduct will be deemed not to violate a given law There are two types of exceptions: Statutory Exceptions (Congress) vs. Regulatory Safe Harbors (OIG) Transactions satisfying all elements of Safe Harbor will not be prosecuted Transactions not satisfying all elements are not per se illegal, but are subject to a facts-andcircumstances analysis

38 The Anti-Kickback Statute: Statutory Exceptions and Regulatory Safe Harbors Statutory Exceptions 42 U.S.C. 1320a-7b(b)(3) Regulatory Safe Harbors 42 C.F.R Must fit exactly Voluntary regulations

39 Statutory Exceptions Discounts Employer/employee Group purchasing Part B co-insurance waivers Managed care plans Pharmacy waivers or Part D cost-sharing FQHC and Medicare Advantage organization FQHC and donor E-prescribing Drug discounts for beneficiaries in the donut hole (The Medicare prescription drug "donut hole" is the difference between what a beneficiary has to pay for after reaching the initial coverage limit and the amount the government pays for "catastrophic" drug coverage)

40 Regulatory Safe Harbors In 1987 Congress, concerned about the breadth of the statute, directed OIG to promulgate safe harbors OIG initially adopted safe harbors for Investments in publicly traded and small entities Referral services Discounts

41 Safe Harbors Warranties Space Rentals Equipment Rentals Personal services/management agreements Group purchasing Co-insurance waivers Sale of professional practices

42 Safe Harbors Additional safe harbors added through the years to address increasingly complex healthcare financial arrangements ASCs, recruitment, shared-risk arrangements Safe harbors adopted in 2006 permitting donations of e-prescribing (same as Stark) and EHR technology

43 AKS Decision Tree 1. Is there an economic benefit? If No If Yes 2. Is there a referral or recommendation? If No If Yes 3. Is there a statutory exception? If Yes If No 4. Is there a safe harbor? If Yes If No 5. Is there a potential for abuse? If No If Yes, Problem! Go to Stark Analysis If No to any of the above, contact the Medical Center s Legal Services Department

44 OIG Advisory Opinions Congress enacted statute requiring OIG to answer requests for Advisory Opinions relating to the Anti-kickback Statute and CMP (Civil Monetary Penalty) Law OIG has issued a number of Opinions addressing a variety of arrangements Opinions not binding on third parties but often cited by lawyers as indicative of OIG s analysis

45 OIG Fraud Alerts, Special Advisory Bulletins, Compliance Guidance Periodically OIG issues Alerts or Advisory Bulletins addressing relationships or conduct the OIG has identified as potential source of Fraud and Abuse OIG has also issued a series of compliance guidance to assist industry in development of compliance plans Important to include Alerts, Bulletins, and compliance guidance in performing research

46 Comparison of AKS and Stark Criminal v. Civil Intent v. Strict liability Any item or service v. DHS (Designated Health Service) Voluntary safe harbors v. Mandatory exceptions

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48 Available Resources

49 Case Example Device manufacturers allegedly rewarded physicians with lavish vacations, gifts, and annual consulting fees as high as $200,000 in return for the physicians endorsements of their implants or use of them in operations. One orthopedic surgeon paid $650,000 Manufacturers paid $311 million Government obtained sanctions against the physician recipient of the kickback and the manufacturers who paid the kickback

50 PHYSICIAN SELF-REFERRAL LAW - STARK 50

51 Physician Self-Referral Law: Stark General Prohibition:... If a physician (or an immediate family member of such physician) has a financial relationship with an entity..., then the physician may not make a referral to the entity for the furnishing of designated health services for which payment otherwise may be made under Medicare (also applicable to Medicaid). 51

52 Stark Law Penalties Strict liability statute Penalties include: Denial of payment for services provided Refunds of amounts collected Civil monetary penalties (up to $15,000 for each prohibited referral; up to $100,000 for a circumvention scheme) Exclusion from Medicare/Medicaid Potential False Claims Act liability 52

53 Statutory History 1877 of the Social Security Act; 42 U.S.C. 1395nn Stark I (1989) Effective January 1, 1992 Prohibition applied to only clinical laboratory services Stark II (1993) Effective January 1, 1995 Expanded the prohibition to apply to additional health services (known as DHS - designated health services )

54 Regulatory History Stark I Final August 14, 1995; effective September 13, 1995 Stark II (Phase I) Final January 4, 2001; effective January 4, 2002 Stark II (Phase II) Interim Final March 26, 2004; effective July 26, 2004 Stark II (Phase III) Final September 5, 2007; effective December 4, 2007 (implementation of some provisions were delayed until December 4, 2008) Modifications in Other Rulemaking

55 Elements of the Physician Self-Referral Prohibition Stark Law Unless an exception applies and its requirements are satisfied, a physician may not: Make a referral To an entity In which the physician or an immediate family member of the physician Has a financial relationship For a designated health service (DHS) For which payment may be made under Medicare

56 Three Questions Is there a referral by a physician for a designated health service payable by Medicare? Does the physician have a financial relationship with the entity furnishing the DHS? Does the financial relationship fit in an exception? If no exception, there s a violation

57 Physicians & Immediate Family Members Physicians M.D., D.O. Dentist, Podiatrist, Optometrist, Chiropractor Immediate Family Members Husband or wife Birth or adoptive parent, child, sibling Step-parent, step-child, step-brother or step-sister Father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law Grandparent or grandchild Spouse of a grandparent or grandchild

58 Designated Health Services (DHS) Designated Health Services include the following: Clinical laboratory services Therapy services (PT/OT/SLP) Radiology & certain other imaging services Radiation therapy services DME Home health Parenteral and enteral nutrients & supplies Prosthetics, orthotics, prosthetic devices Outpatient prescription drugs Inpatient and outpatient hospital services

59 Designated Health Services Entity A person or entity that furnishes DHS by Billing Medicare for the DHS, or Performing services billed as DHS (eff. 10/1/2009) Effectively prohibits (except in rural areas) referrals from physician ownership of entities that provide services to hospitals under arrangements Physician-owned entity becomes a DHS entity and must meet an ownership exception No grandfathering Existing relationships had to be restructured or unwound

60 Financial Relationship Ownership or Investment Interests Direct or indirect Includes equity/stock, LLC membership interests, debt, loans Compensation Arrangements Direct or indirect Includes employment agreements, independent contractor relationships, leases, medical director agreements, other service agreements with physicians Look for any remuneration -- in cash or in kind Disclose outside relationships and understand your obligations

61 Ownership or Investment Interest Includes equity, debt, and other means Does not include Interest in a retirement plan Stock options earned as compensation until exercised Unsecured loans Security interest held by a physician in equipment sold by the physician to a hospital (when financed through a loan to the hospital)

62 Direct Ownership/Investment Interest Direct ownership/investment interest exists between the referring physician (or a member of his or her immediate family) and the DHS entity if there are no intervening persons or entities between them.

63 Indirect Ownership/Investment Interest Between the physician (or immediate family member) and the entity furnishing DHS *, there exists an unbroken chain of any number (>1) of persons or entities having ownership or investment interests; and DHS * entity has actual knowledge (or reckless disregard or deliberate ignorance) of the physician s ownership or investment interest. The DHS * entity need not know precise composition of chain. *DHS, Designated Health Service

64 Stark Exceptions - Overview Generally, there are three types of exceptions: Ownership/investment interests ( ) Compensation arrangements ( ) Services (applicable to both ownership/investment interests and compensation arrangements)( ) Other exceptions ( ) Knowledge exception for payments made to an entity that did not have actual knowledge of, and did not act in reckless disregard or deliberate ignorance of, the identity of the physician who made the prohibited referral for DHS Temporary noncompliance

65 Stark Decision Tree 1. Is there a physician or immediate family member? If No If Yes 2. Is there a direct or indirect financial relationship? If No If Yes 3. Is there a referral? If No If Yes 4. Is there a designated health service? If No If Yes 5. Is there a statutory exception? If Yes If No 6. Is there a regulatory exception? If Yes If No, Problem! Okay!

66 Compliant Arrangement Examples Compliant Arrangement (provided the applicable exception is met): Compensation for personal services at FMV Medical Director stipend that is FMV and paid pursuant to a proper written agreement Medical Office lease reflecting a FMV rental rate Provision of lunches or gift baskets that fall within the annual limit (for 2014 this is $385)

67 Noncompliant Arrangement Examples Noncompliant Arrangements: Increased service rate based upon increased referrals Medical Director position and stipend for high referrer that is duplicative of another position and/or does not require the provision of needed services Provision of free office space to a private practice physician Provision of an all expense-paid trip for physician and spouse to Hawaii (or any gifts that, in the aggregate, exceed the annual limit)

68 Practical Tips Again, a relationship-based analysis Practical solutions much the same as with the AKS Control over the contracting process through appropriate policy and checklists Control over Accounts Payable to ensure that checks are cut only when there is appropriate documentation

69 Compensation Exceptions: Common Requirements In writing, signed by the parties and specifies services or property covered Compensation is: Set in advance Fair market value Does not take into account the volume or value of referrals, or other business generated Agreement would be commercially reasonable even if no referrals Must not violate Anti-Kickback Statute

70 General Exceptions (42 C.F.R ) Physician Services In-office ancillaries Prepaid health plans Academic Medical Centers Implants in ASCs EPO and other dialysis drugs in ESRD Preventive screening services, immunizations, vaccines Eyeglasses and lens following cataract surgery Intra-family rural referrals

71 Group Practice Definition (42 C.F.R ) Not an exception, but key to Physician Services and In-Office Ancillary Services Exceptions Allows for Productivity Bonuses & Profit Sharing Highly Detailed Definition

72 Single legal entity Group Practice Definition At least two members providing full range of services Substantially all services of members furnished through group Members provide at least 75% of physicianpatient encounters Overhead expenses/income distributed in accordance with previously determined methods Unified business

73 In-Office Ancillary Services Exception (42 C.F.R (b)) 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 wholly-owned by the group practice, or by a third-party billing agent *DHS, Designated Health Service

74 In-Office Ancillary Services Exception CMS recognized as one of the most important exceptions to Stark law (70 Fed. Reg. 38,181 (July 12, 2007)) BUT recent scrutiny due to proliferation of in-office diagnostic testing. MedPac Report (June 2010) H.R ( Sess.) Proposes to make IOAS not applicable to certain diagnostic tests, anatomic pathology, radiation therapy services and supplies, and physical therapy services

75 In-Office Ancillary Services Exception ACA Disclosure Requirement For CT, MRI, and PET, referring physician needs to provide written disclosure of ownership of imaging equipment and list of alternative suppliers. Regulation effective January 1, 2011 CMS has the authority to add other services to list of disclosure services.

76 Ownership Exceptions (42 C.F.R ) Ownership in publicly-traded securities and mutual funds Hospitals in Puerto Rico Rural provider Ownership in whole hospital 76

77 Compensation Exceptions (42 C.F.R ) Rental of office space and equipment Bona fide employment relationships Personal services arrangements Physician recruitment Isolated transactions Remuneration unrelated to DHS Certain group practice arrangements with hospitals Payments by physicians for items and services Charitable donations Nonmonetary compensation Fair market value compensation

78 Compensation Exceptions (42 C.F.R ) Medical staff incidental benefits Risk-sharing arrangements Compliance training Indirect compensation arrangements Referral services Obstetrical malpractice insurance subsidies Professional courtesy Retention payments in underserved areas Community-wide health information systems Electronic prescribing items and services Electronic health records items and services

79 Non-Monetary Compensation Non-monetary compensation may be provided to physicians, and their immediately family members, if it is: Not determined in a manner that accounts for volume or value of referrals Not solicited by the physician or physician s practice Not provided to induce or reward referrals Not part of an arrangement that otherwise violates the antikickback statute Examples include: Lunches, flowers, edible treats, tickets No cash or cash equivalents Annual limit per physician (2014 limit = $385; 2015 limit = $392) All non-monetary compensation should be tracked, typically on a log, per hospital policy

80 Non-Monetary Compensation If possible, value is divided among physicians $200 lunch to physicians and staff in 4 physician practice = $50 logged to each physician $300 dinner for physician and spouse = $300 logged to the physician Indivisible value is allocated to each physician $150 goodie basket to 3-physician practice = $150 allocated to each physician $75 flower arrangement given to 4-physician practice = $75 logged to each physician If an item with indivisible value is given to a specific physician within a practice, then the total value is only logged to the recipient physician

81 Frequently Used Exceptions Personal Services 42 CFR (d) Rental of Office Space/ Equipment 42 C.F.R (a)-(b) Bona Fide Employment 42 C.F.R (c) Fair Market Value 42 C.F.R (l) Do you need a signed writing? Y Y N Y Term of at least 1 year? Y Y N N Must compensation be FMV? Y Y Y Y Set in advance? Y Y N Y Not take into account V/V of referrals? Y Y Y (except prod. bonuses) Y Percentage-based/per-click comp permitted? 6 month holdover provision? Y N Y Y Y Y N/A N

82 Indirect Compensation Exception (42 C.F.R (p)) Applies only if there is an "indirect compensation" arrangement (42 C.F.R (c)(2)) If no indirect compensation arrangement, no need to apply exception If Stand in the Shoes applies, to create a direct financial arrangement must use a direct compensation exception (i.e., personal services arrangement) 82

83 Indirect Compensation Exception (42 C.F.R (p)) Physician deemed to have direct compensation arrangement with DHS Entity if only intervening entity between the physician and the entity is his or her physician organization; and physician has an ownership or investment interest in the physician organization Physician is permitted to stand in the shoes of physician organization if only intervening entity between physician and DHS entity is the physician organization 42 C.F.R (c)(1)

84 Indirect Compensation Exception Physician compensation is fair market value and does not take into volume or value of referrals, or other business generated Unlike "indirect compensation" definition, exception does not look at aggregate compensation Per unit-of-service and percentage based payments permitted (except for leases) Apply special rules on compensation, 42 CFR (d)(2),(3) Compensation is set out in writing, signed by parties, and specifies services (except employment) Does not violate Anti-Kickback Statute or other federal/state billing or claims submission

85 Temporary Noncompliance with Signature Requirements (42 C.F.R (g)) Agreement otherwise fully complies with applicable exception Signatures within 90 consecutive days where failure was inadvertent Signatures within 30 days where failure was not inadvertent Exception may only be used once every 3 years for same physician

86 CMS Settlements Under the Stark Self-Referral Disclosure Protocol February 2011 to June 2013

87 No signed agreement Common Stark Issues Confirm agreement necessary No direct/indirect compensation arrangement? Employment agreement? Other documentation/signatures under State Law? Temporary non-compliance with signature requirement Expired Contract Confirm agreement is necessary Would 6-month holdover provision apply? 87

88 Common Stark Issues New or changed duties Is there any documentation of change? s, etc. No fair market value assessment Any indication of fair market value at inception of arrangement? Internal evaluation of compensation Use outside consultant to determine FMV

89 Patient Inducement Initial Arrangements 89 Compliance Training

90 Civil Monetary Penalty (CMP) - Beneficiary Inducements Unlawful to offer or give remuneration To a Medicare/Medicaid beneficiary If, know or should know, likely to influence beneficiaries to choose a particular provider, practitioner, or supplier For a Medicare/Medicaid covered service Examples: Waivers of co-payments; free gym memberships; coupons for local stores $10,000 civil monetary penalty Some relief around inducement issue under the ACO waivers 90

91 AKS/Stark Settlements October 2010: Marion (Ohio) General Hospital paid $1,200,000 for failing to have written contracts with a number of financial relationships with physicians. Specifically, the hospital provided an after-hours answering service and medical waste disposal services to independent physicians at below-market rates and provided payment without a written contract to independent physicians who treated uninsured patients, among other violations. April 2013: Intermountain Healthcare paid $25,500,000 for the following improper relationships: 37 compensation arrangements with employed physicians contained bonus structures that took into account the volume of value of referrals to Intermountain; 18 lease arrangements with physicians for office space were not written and executed and the rental was not consistent with fair market value; 154 financial arrangements with physicians for personal services were not memorialized in a written and executed agreement during the entire time the services were provided. 91

92 AKS/Stark Settlements December 2008: Condell Health Network paid $33,120,000 for the following violations: Providing leases of medical office space at rates below fair market value; Providing loans to physicians without assessing whether there was a particular community need for such arrangements or physicians; Providing loans to physicians already in the hospital s service area; Entering in multiple loan agreements with the same physician or medical group; and Compensating physicians for performing services at the hospital without requirement written agreements. 92

93 AKS/Stark Settlements December 2010: Detroit Medical Center paid $30,000,000 for engaging in improper financial relationships with referring physicians. Most of the relationships at issue were office lease agreement and independent contractor relationships that were either inconsistent with fair market value or not memorialized in writing. November 2012: ForTec Medical, Inc. paid $126, for providing customers (including physicians) an all-expense paid trip to the Masters Golf Tournament. The OIG concluded that the trips were intended to induce referrals. December 2013: After it self-disclosed conduct to OIG, Havasu Regional Medical Center paid $510, for paying remuneration to a doctor in the form of the allowed rental of usable space at a below-market rental rate and the inappropriate provision of employee services.

94 Compliance Plan

95 Seven Elements of An Effective Compliance Plan Compliance Standards and Procedures Education and Training Open Lines of Communication Response and Prevention Oversight Responsibility Monitoring and Auditing Enforcement and Discipline

96 Compliance Standards and Procedures Compliance standards and procedures are in place to: Reduce the prospect of erroneous claims and fraudulent activity, while identifying any unusual billing practices Identify the organization s risk areas and establish internal controls to contain those risks

97 Oversight Responsibility Designate one or more high-level individuals (e.g., King s Daughters Medical Center s Board of Directors) Consider a committee depending on size of the organization (e.g., King s Daughters Medical Center s Compliance & Integrity Committee) Decide scope: all compliance activities or be limited to implementation of specific compliance functions Use due care not to put individuals who have demonstrated a propensity for violating the law into positions of substantial discretionary authority

98 Monitoring and Auditing Evaluate the effectiveness of its compliance program Monitor on ongoing basis with its standards and procedures Period review its standards and procedures to ensure they are current and complete A review of pending claims not yet submitted can establish a benchmark Counsel often recommend this be conducted under attorney-client privilege

99 Open Line of Communication Accessible system for reporting inappropriate activities and for communicating compliance questions and concerns Failure to report erroneous or fraudulent conduct is a violation of the compliance program No retaliation may be taken against individuals who in good faith report what reasonably appears to be misconduct or a violation

100 Enforcement and Discipline Enforce its compliance standards through consistent and appropriate disciplinary action Disciplinary procedures should include, as appropriate, discipline of individuals who should have detected an offense but failed to report

101 Response and Prevention If a compliance violation is detected, the organization should take all reasonable steps to respond appropriately to the violation Take corrective action to rectify any harm resulting from the current offense Prevent similar offenses from occurring in the future

102 Areas of Consideration Accurate Coding & Billing Billing for non-covered services, unbundling, failure to properly use coding modifiers, upcoding Reasonable & Necessary Services Medical record and orders should support appropriateness of service Compliance with national and local coverage determinations (NCD/LCD) Documentation Problems Documentation should be timely and accurate Stark Concerns Designated health service, financial relationships, execution of physician contracts Improper Inducements, Kickback and Self-Referrals Financial arrangements with referrals sources, joint ventures, leases, gifts/gratuities

103 The OIG s Five Practical Tips for Creating A Culture of Compliance Make compliance plans a priority now Know your fraud and abuse risk areas Manage your financial relationships Just because your competitor is doing something doesn t mean you can or should. Call HHS-TIPS to report suspect practices or contact King s Daughters Medical Center s compliance hotline, or When in doubt, ask for help 103

104 Compliance Maintain a compliance policy and plan Not necessary to include copy with disclosure If not, call counsel NOW Set a compliance audit plan Look to OIG work plan Consider adding physician contracting and arrangements to this year s audit list Ongoing monitoring and evaluation key NOTE: sprinkle in privacy, security and EHR issues Provide clear guidance to the compliance officer and audit team

105 Compliance Committee Compliance You need the right people in the room Look to job specific positions for membership Regular meetings Track attendance Minutes Perhaps a standardized form Should be reviewed Legal should attend and participate Promote open discussion while maintaining privilege Create subcommittees that report to the larger group

106 Link Compliance and Governance Transactional or compensation committee of the Board Statement of the role of members Consider who staffs the committee from executive team Frequency of meetings Preapproval of certain arrangements? Oversight of the packets Detailed agenda or chart of agreements Include list of other contracts and financial relationships Copy of agreement may not be necessary FMV and other documentation perhaps a summary Legal review of minutes

107 Compliance and Governance Reports on compliance issues to full Board Important to include legal Good governance Work through difficult issues Preserve privilege Sometimes should include outside counsel

108 Your Organization has a Culture of Compliance Mission driven and part of your core values Transformation of health care begins with being the most trusted provider Code of Conduct sets out everyone s expectations More than just compliance it is about integrity Obligation to report No retaliation for reporting in good faith Chain of reporting includes your supervisor, your legal department and a hotline number and website

109 Our Duty to Patients High quality health care is our mission How we treat patients and bill services are tied to compliance Quality tied closely to compliance as pay for performance becomes the norm Duty to ensure you are properly trained to provide quality care, credentialed and follow the policies and procedures as well as the law Patient confidentiality HIPAA, including when teammates are patients

110 Physician Contracting and Auditing

111 Auditing Physician Agreements Where do I start? Gather all your written agreements and amendments any missing? Select your look back period Pull AR Pull timesheets and FMV (fair market value) documentation Find tax forms (e.g., W-9s) Understand your legal obligations 60-day repayment period Working knowledge of requirements Use an organizational tool to track At the direction of an attorney

112 Auditing Physician Agreements Some Auditing Pitfalls Mismatched names Physicians with multiple agreements and payments Finding the agreement Amendments and holdover provisions Commencement and termination Are amendments bandages that fix non-compliance periods? Finding a signature and agreement together Reviewing s, invoices and other documentation Contract under state law FMV (fair market value) and other documentation issues Track family members and office staff

113 Auditing Physician Agreements Auditing Surprises and Vulnerabilities Medical director timesheets Real Property leases with annual increases Defining set in advance CME (on site vs. off site) A contract for a muffin - incidental Board retreats Advocacy activities Expert witness Clinical research

114 Physician Contracting Best Practices Maintain a Contract policy Create a work flow and sign off process All signatures before services start Is it possible? Required? To date or not to date? Determine documentation requirements Centralize storage of physician agreements and documentation (perhaps electronic) Set reminders of expiring agreements Retention a plug for Record Retention policies

115 Physician Contracting Best Practices Stopping others from providing stuff or contracting with physicians outside your process Gift baskets Side contracts Process with safeguards for payments to physicians Integrate contract approvals into compliance plan and governance Employed physicians Consistent intake process with HR Compliant recruitment process Educate and train staff

116 Auditing Electronic Health Records (EHRs) Revenue informatics positions are common Integrate into compliance activities Ensure you meet your pay-back obligations Set sample size Committee and team approach Looking for a pattern of noncompliance or worse yet fraud EHRs set create mistakes that are make over and over Dig deeper for medical necessity issues

117 Employment: Fraud & Abuse Issues Employment agreements should: Be at fair market value Be commercially reasonable NOT Reflect Volume/Value

118 Physician Employment Direct employment of physician by hospital or through subsidiary entity Designed to align incentives of hospital and physician through improvements in quality, efficiency and productivity Bona fide employment can meet Stark and AKS exceptions Compensation should be designed to achieve the objectives through productivity standards and incentives

119 Employment Considerations What behavior does the hospital want to incentivize? Better outcomes Better and more efficient care Coordination and communication among providers Better outcomes Data to Prove it

120 Stark Employment Exception Protects bona fide employment (employees under usual common law and Internal Revenue Code definitions) For identifiable services Compensation Set at fair market value Not determined taking into account the volume/value of referrals Arrangement must be commercially reasonable absent referrals Employed physician s compensation may be conditioned on referrals if Requirement does not apply Patient choice Payer rules Best interests of patient per physician

121 Some Don'ts of Employed Physician Compensation Do NOT set compensation in a manner that takes into account the volume or value of anticipated or required referrals. This applies, whether explicitly or implicitly stated. Generally, no hospital referral information may be taken into consideration when determining remuneration, in cash or kind, to physicians that are a referral source to the Medical Center OR are employed by the Medical Center. Do NOT adjust physician compensation based on referral data. Do NOT make hiring decisions that are based on, or have the appearance of being based on, referral data Do NOT make physician termination decisions based on referral data. Do NOT reduce a physician s salary on the basis of low referral rates to KDMC facilities; and Do NOT track physician referral volumes, and specifically target specialties whose referrals are more profitable to the hospital.

122 60-Day Repayment Rule

123 60-Day Repayment Requirement Section 6402 of Affordable Care Act (ACA) requires reporting and repayment of overpayments within 60 days of identification (or due date of next cost report, if applicable) Applies to Medicare and other federal health care programs What s identification? Failure to repay within 60-days may be a false claim Waiting on more guidance and regulations

124 60-Day Repayment Requirement - Identification The 60-day rule states that an overpayment must be repaid to Centers for Medicare and Medicaid Services (CMS) 60 days after the overpayment is identified. However, there is some uncertainty regarding what identification entails and when the 60-day deadline truly begins. Some commenters believe the 60-day clock should begin when a billing error is first recognized, while others argue it should begin once the provider has calculated the overpayment amount. A common lesson learned by providers is that the government is not going to treat a provider well who has not tried to identify and fix an overpayment error with reasonable speed, so providers must be remain diligent in complying with this rule. f you are uncertain is there is an overpayment situation, immediately contact the Medical Center s Compliance & Integrity Department or Legal Services Department.

125 Disclosures to the Government

126 Voluntary Disclosure of Physician Contracting Issues: If, When and How Legal obligations to disclose Potential benefits/risks of disclosure Where to disclose OIG Self-Disclosure Protocol CMS Self-Referral Disclosure Protocol Tough disclosure decisions Compliance and auditing issues and best practices Hypotheticals

127 Sources of Legal Obligation to Disclose Medicare statute Felony for anyone having knowledge of the occurrence of any event affecting his initial or continued right to any such benefit or payment, or the initial or continued right to any such benefit or payment of any other individual in whose behalf he has applied for or is receiving such benefit or payment from concealing or failing to disclose such an event with an intent fraudulently to secure payment which is excessive or unauthorized. 42 U.S.C. 1320a-7b(a)(3) CMS proposed rule purporting to implement the statute clarified that providers must return excess payments within 60 days of identifying or learning of the excess payment. (67 Fed. Reg. 3,662 (Jan. 25, 2002). Regulation never finalized No known prosecutions

128 Sources of Legal Obligation to Disclose Patient Protection and Affordable Care Act (ACA) 6409 of the ACA Protocol to disclose actual or potential violations. Secretary is authorized to reduce amounts due and owing for all violations under section 1877 of the Social Security Act 6402 of the ACA Must report and return overpayment within 60 days of either identification of overpayment or date on which any corresponding cost report is due, whichever is later CMS implementing regulations under

129 Potential Benefits of Disclosure Potential to avoid criminal liability. Self-disclosure unlikely to result in criminal investigations or prosecutions of the disclosing entity Potential to minimize civil exposure Fines and penalties are reduced more often than not, and may actually be eliminated In 2007, OIG statistics indicated it had referred more than half of its Self-disclosures to Medicare contractors for resolution, presumably without penalty Potential to avoid Corporate Integrity Agreements Potential to neutralize qui tam suits [Qui tam lawsuits are a type of civil lawsuit whistleblowers bring under the False Claims Act, a law that rewards whistleblowers if their qui tam cases recover funds for the government]

130 What Does Disclosure Guarantee? While disclosure can minimize penalties, fines, and criminal liability, no reduction in penalties is guaranteed, and the OIG reserves the right to make criminal referrals Changes announced in OIG s most recent open letter mean that no self-disclosure can be settled in the self-disclosure program for less than $50,000 (Note: This is not a guarantee) May not eliminate vulnerability to qui tam suits U.S. ex rel. Rost v. Pfizer, Inc. and Pharmacia Corporation

131 To Whom To Disclose? Department of Justice Office of Inspector General Centers for Medicare & Medicaid Services CMS Contractors

132 What Gets Disclosed? To the OIG only potential fraud against the Federal health care programs, rather than merely an overpayment. Potential fraud does not include Stark violations only there must be at least a colorable violation of the anti-kickback statute Merely an overpayment disclose to the MAC, Medicare Administrative Contractor To CMS Stark Violation only MAC an option?

133 OIG s Self-Disclosure Protocol First displayed in the Federal Register in Fed Reg. 58,399 (October 30, 1998) Created out of a pilot program operated by the HHS-OIG and the Department of Justice Based on the belief that providers must be willing to police themselves, correct underlying problems and work with the Government to resolve these matters.

134 OIG s Self-Disclosure Protocol For disclosure of matters that the provider believes are violative of Federal criminal, civil, or administrative laws. Not for matters which exclusively involv[e] overpayments or errors that do not suggest that violations of law have occurred. Such matters should be brought directly to [a Medicare contractor]. OIG will refer criminal matters to the DOJ, as appropriate, but will also report the provider s level of cooperation Prior experience under the OIG protocol

135 OIG s Self-Disclosure Protocol March 24, 2009 Open Letter Narrowed the scope of the protocol s application to Stark and Anti-Kickback Requires a colorable violation of AKS no self-disclosure of Stark-only violations AKS violations now require a minimum $50,000 settlement (the statutory maximum penalty for each kickback, not including 3x assessment) Reaffirmed inclination to settle matters at lower end of damages continuum 135

136 CMS Self-Referral Disclosure Protocol Mandated by the Affordable Care Act Purpose is to resolve actual or potential violations of the Stark self-referral law Separate from the advisory opinion process Large number of disclosures have been made No solid indicators of how CMS will compromise potential Stark disclosure

137 CMS Self-Referral Disclosure Protocol Stated factors considered in compromising overpayments Nature and extent of the improper or illegal practice Timeliness of the self-disclosure Cooperation in providing additional information Litigation risk to CMS Ability to pay

138 CMS Self-Referral Disclosure Protocol First Stark Settlement Saints Medical Center $579,000 Reserves apparently were between $14.5 million and $785,000. Issues with written agreements for call coverage, night coverage and stipends. Issue was raised in due diligence.

139 CMS Self-Referral Disclosure Protocol Cooperation among the OIG & DOJ CMS only accepts violations or potential violations of self-referral law If additional violations or potential violations of other criminal, civil, and administrative laws send to OIG Cannot submit disclosure concurrently under SRDP and OIG s Self-Disclosure Protocol Coordination with Law Enforcement

140 CMS Self-Referral Disclosure Protocol Required Elements of Submission Description of Actual or Potential Violation(s) Identifying Information of party disclosing Description of the nature of the matter being disclosed Duration of violation Disclosing party s legal analysis of how the matter is a violation Specify Stark exception and which elements are/are not met Circumstances under which the matter was discovered and measures taken to address the issue and prevent future abuses Statement identifying a history of similar conduct or enforcement action Description of any compliance program If applicable, a description of appropriate notices provided to other government agencies Whether the matter is under current inquiry by the government

141 CMS Self-Referral Disclosure Protocol Core Stark Compliance Analysis Is there remuneration? Is there a compensation arrangement? Direct? Indirect? Is there a referral, as defined by the regulations, for DHS? Is the organization furnishing the DHS an entity (as defined in the regulations)? Is Medicare the payor?

142 CMS Self-Referral Disclosure Protocol Core Stark Analysis (cont d) Apply rules that were in effect during the various periods of the arrangement The Stark rules have changed a number of times and the analysis may be different during certain points in the arrangement Give proper, but not excessive, weight to introductory language Statutory and regulatory text govern Focus on Period of Disallowance

143 CMS Self-Referral Disclosure Protocol Exceptions to Consider: Temporary Noncompliance (42 C.F.R (f)). Compensation Unrelated to DHS (42 C.F.R (g)). Payments by a Physician (42 C.F.R (h)). Grace Periods (42 C.F.R (g)). Isolated Transactions (42 C.F.R (f)).

144 CMS Self-Referral Disclosure Protocol Overpayment Calculation With respect to physician-hospital arrangements: Is the referring physician the admitting physician? Did furnishing the improperly referred DHS affect the DRG payment? Does this impact the amount of the overpayment? Consider the Self-Referral Disclosure Protocol (SRDP) look back period (in contrast to the reopening period for cost reports or Part B claims) Which programs do you consider? Medicare Fee-For-Service (FFS) Medicare Advantage Medicaid FFS The SRDP identifies a process to enable providers of services and suppliers to self-disclose actual or Medicaid potential violations Managed of the Care physician self-referral statute

145 Tough Decisions Disclose to OIG or CMS, but not both In cases where there is a potential or actual anti-kickback statute violation, entity could choose OIG self-disclosure protocol in lieu of the Stark SRDP Conduct that raises liability risks under the physician self-referral statute may also raise liability risks under the OIG s civil monetary penalty authorities regarding the federal anti-kickback statute and should be disclosed through the OIG s Self-Disclosure Protocol. Disclosing parties should not disclose the same conduct under both the SRDP and OIG s Self-Disclosure Protocol. Effect on overpayment obligation OIG cannot release the 1877(g) liability, so party disclosing under the OIG protocol arguably still has CMS/Stark overpayment liability and failure to return the overpayment is an FCA violation. Will CMS sign off on mixed Stark/AKS settlements reached under the OIG protocol?

146 Exclusion Screening

147 Exclusion Screening Growing number of State Medicaid Programs are requiring monthly screening of current employees and contractors State Medicaid Director Letter instructed states to require providers to search the HHS-OIG website monthly to capture exclusions and reinstatements that have occurred since the last search HHS-OIG CIAs still only require annual screening

148 Exclusion Screening Mandatory Exclusions 42 U.S.C. 1320a-7(a) OIG is required to exclude the individual or entity for a minimum of 5 years for conviction of certain offenses e.g., program-related crimes, patient abuse, felony health care fraud, or felony convictions relating to controlled substances Permissive Exclusions 42 U.S.C. 1320a-7(b) OIG may exclude individuals or entities under 16 different authorities e.g., losing a state license to practice, failing to repay student loans, conviction of certain misdemeanors, or failing to provide quality care

149 Exclusion Screening Any individual or entity can be excluded No payment may be made by any Federal health care program for any items or services furnished, ordered, or prescribed by an excluded individual or entity Applies to: Excluded person Anyone who employs or contracts with the excluded person Any hospital or other provider or supplier where the excluded person provides services The exclusion applies regardless of who submits the claims and also applies to all administrative and management services furnished by the excluded person

150 Exclusion Screening Certain exclusions are imposed for a defined period or indefinite in length Example of indefinite: start as licensing board actions Reinstatement is not automatic Need authorization notice granted from OIG With criminal action consider exclusions when entering plea negotiations

151 Exclusion Screening Need to have a policy Before hiring and at least annually, monthly King s Daughters Medical Center s policy provides for initial and monthly screening Need to check the websites ea1f226a7955&interactionstate=jbpns_ro0abxc0abbfannmqnjpzgdl Vmlld0lkAAAAAQATL2pzZi9uYXZpZ2F0aW9uLmpzcAAHX19FT0ZfXw**& portal:type=action#1#1 Check everyone The Medical Center utilizes VerifyComply, a web-based software which checks the OIG and SAM sites as well as the fifty United States

152 Exclusion Screening Updated OIG Guidance Growing number of State Medicaid Programs are requiring monthly screening of current employees and contractors See TennCare Policy PI (effective 6/22/2011) State Medicaid Director Letter instructed states to require providers to search the HHS-OIG website monthly to capture exclusions and reinstatements that have occurred since the last search HHS-OIG C152IAs still only require annual screening

153 Individual Accountability OIG uses its permissive exclusion authority to reach officers, directors, managing employees General Perspective: Enhanced governmental interest in following the conduct to identify individuals who can be held accountable for corporate wrongdoing whether they are in the field, executive suite, or the board room

154 Exclusion Screening Settlements August 2014: Diagnostic Laboratories and Radiology paid $1,983, for employing four individuals that it knew or should have known were excluded from participation in Federal health care programs. July 2014: Bradford Heights Health & Rehab Center, a not-for-profit faith-based long-term-care organization in Hopkinsville, KY, paid $30, for employing an individual who was excluded from participating in any Federal health care programs. OIG's investigation revealed that Bradford employed an excluded nurse to provide items or services that were reimbursed by Federal health care programs.

155 Recent Enforcement Actions

156 United States ex rel Drakeford v. Toumey Healthcare System Inc. Prior Fourth Circuit decision Compensation considered revenue from anticipated referrals that generate facility fees Physicians have made a referral for facility/technical component when they refer patients for outpatient procedures that they personally perform Jury verdict Physician part-time employment agreements for outpatient procedures Over $39 million in false claims Federal district Court entered judgment under the FCA for $237.5 million

157 Court Filings in Wake of Tuomey "The inevitable result will be that Tuomey as it currently operates - a charitable institution that provides care to a community that is both underserved and underinsured, taking all patients regardless of ability to pay - would cease to exist," the brief states. "At worst, the hospital would close altogether; at best, it may be acquired by a for-profit entity. DOJ requested that Tuomey place over $50 million in escrow if the hospital wants to appeal its case. Court filings reveal that DOJ made it a precondition of any settlement that Tuomey terminate CEO and VP.

158 Halifax Hospital Qui tam suit against Halifax Hospital in Daytona, Florida by Halifax s Director of Physician Services Allegations: Admission criteria not met Failure to establish medical necessity Repetitive up-coding and under-coding Improper billing of services performed by RNs Violations of the Stark law through financial incentives to staff physicians, including oncologists and urologists Payment of excessive compensation greatly in excess of FMV in violation of Stark law Payment of excessive compensation for medical directorships without legitimate services Other allegations Settled Stark issues in March 2014 for $85 million and agreed to a CIA

159 Infirmary Health System Inc. In August, 2013 the DOJ Intervened in a qui tam case against Infirmary Health System and Diagnostics Physician Group, PC Relator was a local cardiologist, former DPG physician Allegations of anti-kickback and Stark violations in relation to two IHS affiliated clinics Allegation that the Clinic improperly paid DPG physicians compensation that included a % of money collected from Medicare for tests and procedures that the DPG physicians referred to the clinic; Physicians paid bonuses related to volume and value of referrals Allegation of below FMV rental agreements for office space July 2014 Infirmary and DPG settled with the government for $24.5 million and a CIA

160 HMA In January, 2014 the government intervened in a qui tam suit that alleged: HMA set admission targets, then pressured ED physicians to admit patients who could have been discharged, treated as outpatients, or placed in observation HMA executives, named in the complaint, ordered administrators to question physicians about missing admission targets in daily meetings Bonuses and contracts provided to ED physician groups to induce unnecessary admissions For other physician groups: Free office space and staffing HMA paid inflated prices for physician-owned assets Sold assets to physicians for below FMV Sham medical directorship agreements

161 Cooper Health System Physicians were paid $18,000 to serve on Cooper Heart Institute Advisory Board and to attend 4 Board meetings Meetings contained marketing content promoting Cooper's heart programs Qui tam filed by local cardiologist Allegations under AKS and Stark In January 2013, Cooper Health settled for $12.6 million

162 Freeman Health System Freeman self-disclosed the incentive payments that may have taken into account the volume and value of referrals Payment alleged to include revenue generated by the physicians' referrals for diagnostic tests and other services performed at hospital clinics In November 2012, Freeman Health settled the Stark issues for $9.3 million settlement

163 Adventist Health System Qui tam filed by two community physicians, allegations under AKS and Stark Charging physicians less than FMV for medical and non-medical supplies Paying physicians above FMV for teaching services In May 2013 Adventist settled for $14.1 million and a CIA

164 NEW VULNERABILITIES AND HOT TOPICS

165 Quality of Care Quality of care and payment are linked Enhanced payment for improved outcomes Reduced payment for substandard care Data transparency enhances accountability Hospital Compare and Nursing Home Compare Predictive analytics and detection Bottom line: Quality is a compliance issue Substandard and unnecessary care = overpayments

166 Enforcement of Quality of Care Failure of care/worthless services Medically unnecessary care Failure of credentialing and medical staff oversight Falsifying quality data

167 Lessons from Prosecutions Don t ignore the conduct of your top billers no physician is too big to review Listen to the concerns of all employees not just other physicians or administrators Have a conflict of interest protocol and follow it Enforce accountability across all employment levels Review your data and understand what it means

168 Electronic Medical Records External Risks Data breaches Theft of PHI Internal Risks Misuse of cut and paste cloning functions Templates Cover up crimes

169 Data Use Expanded access to and use of data for oversight and enforcement Data sharing agreements Real-time data CMS Center for Program Integrity Impact of more data Transparency Quality of Care Accountability Volume metrics in transactional and operational decision making

170 CASE STUDIES

171 Case Study 1 In the course of its general compliance activities, Community Heart Hospital has an outside consultant conduct a review of procedures performed at the hospital by cardiac surgeons and interventional cardiologists. The results indicate that two of the physicians have unusually high rates of stent use. A chart review for these two physicians procedures finds an error rate of 19% over the past 12 months which results a Medicare overpayment of $38,000. Questions to Consider: (a) disclose or just repay (b) if disclose, to whom; (c) are additional audits necessary; (d) if so, how far back to audit; and (e) notify the physician of error rate and audit?

172 Case Study 2 A large health system has agreed to purchase a failing community hospital. In the course of the due diligence, several issues become known. A medical office lease expired 7 months ago; The neurosurgeon s group has been paid for services under an expired medical director agreement; The CEO entertained Dr. Smith, a cardiac surgeon, with dinner and wine. The dinner totaled $425. Dr. Smith has already received $300 in non-monetary compensation this calendar year. Questions to Consider: (a) does the medical office lease need to be renewed with an executed and signed lease agreement; (b) can the neurosurgeon s group continue to be paid if the medical director agreement expired; (c) is there a limit to value of non-monetary compensation a physician can receive?

173 Case Study 3 A physician performs certain needed and necessary administrative services for the ABM Medical Center. The service agreement is submitted to the physician for signature; however, the physician forgot to sign it. One year later, ABM Medical Center discovered that there is no executed written agreement with the Physician. Questions to Consider: (a) can ABC Medical Center continue to pay the physician for services rendered; (b) disclose or just repay; (c) if disclose, to whom; (d) is it necessary to perform an audit to determine if any other contracts are expired?

174 Case Study Review If you have any questions regarding physician arrangements and/or the application of the Stark/AKS, please contact the Medical Center s Legal Services and/or Compliance & Integrity Departments.

175 NEXT STEPS

176 Next Steps Compliance Plan Code of Conduct Policies and Procedures Training

177 Compliance Plan and Code of Conduct Compliance Plan Review Revise Train Audit Code of Conduct Review Revise Train Sign

178 Examples of Policies and Procedures Financial relationships Valuations Physician Contracting Employment Call Medical Director Hospital based Clinical Other CIA required policies

179 General Compliance Training Within 120 days after the Effective Date of CIA (May 27, 2014) At least two hours of General Compliance Training Each Covered Person New Covered Persons within 30 days after becoming a Covered Person or within 120 days after the Effective Date, whichever is later One hour of General Compliance Training in each subsequent Reporting Period Training shall include: CIA requirements and Compliance Program - Code of Conduct and Compliance Policies and Procedures

180 Specific Compliance Training Four hours of Specific Compliance Training pertinent to their responsibilities in addition to the General Compliance Training, in such topics such as: Appropriate documentation of medical records, Medical staff peer review procedures, Medical staff credentialing and privileging, Quality assessment and performance improvement activities, Management and oversight of interventional cardiac procedures, The personal obligation of each individual involved in the claims submission process to ensure that such claims are accurate, and The legal sanctions for violations of the Federal health care program requirements At least three hours of Specific Compliance Training Each Covered Person New Covered Persons within 30 days after becoming a Covered Person or within 120 days after the Effective Date, whichever is later Two hours of Specific Compliance Training in each subsequent Reporting Period

181 Arrangements Compliance Training Three hours of Arrangements Compliance Training Areas of training to include the following topics: Relationships that potentially implicate the Anti-Kickback Statute or the Stark Law, as well as the regulations and other guidance documents related to these statutes Policies, procedures, and other requirements relating to Arrangements and Focus Arrangements, including but not limited to the Focus Arrangements Tracking System, the internal review and approval process, and the tracking of remuneration to and from sources of health care business or referrals The personal obligation of each individual involved in the development, approval, management, or review of KDMC's Arrangements to know the applicable legal requirements and the KDMC's policies and procedures The legal sanctions under the Anti-Kickback Statute and the Stark Law Examples of violations of the Anti-Kickback Statute and the Stark Law Within 30 days after the beginning of their employment or becoming Arrangements Covered Person and/or person to a new or renewed Focus Arrangement or within 120 days after the Effective Date, whichever is later Two hours of Arrangements Compliance Initial Training Arrangements in each Compliance Training

182 MEDICAL CENTER POLICIES AND PROCEDURES GOVERNING THE LAW

183 Policies Pertaining to Focus Arrangements The Medical Center maintains policies and procedures relating to arrangements and relationships with Focus Arrangements. Focus Arrangements is defined as every arrangement or transaction that: Involves, directly or indirectly, the offer or payment of anything of value; and is between the Medical Center and any actual source of health care business or referrals to the Medical Center; or Is between the Medical Center and a physician (or a physician s immediate family member) who makes a referral (as defined at 42 U.S.C. 1395nn(h(5)) to the Medical Center for Designated Health Services.

184 Policies Pertaining to Focus Arrangements 1. Agreements and Payments to Physicians or Other Referral Sources (Administrative Policy A11); 2. Report and Return of Overpayments to Federal Health Care Programs (Administrative Policy A10); 3. Compliance with the Federal Anti-Kickback Statute and Stark Law (Administrative Policy I49); 4. Non-Monetary Compensation to Physicians and Their Immediate Family Members and Medical Staff Incidental Benefits (Medical Staff/Administrative Policy I31); and 5. Contract Review and Approval (Administrative Policy H6).

185 Compliance with the Federal Anti-Kickback Statute Policy Administrative Policy I(49) (Compliance with the Federal Anti- Kickback Statute and Stark Law) reiterates the Medical Center s commitment to compliance with applicable laws, rules and regulations, including the Anti-Kickback Statute and the Stark Law. The Anti-Kickback Statute (AKS) prohibits knowingly and willfully offering, paying, soliciting or receiving anything of value as an inducement or reward to refer items or services for which payment is available under the federal healthcare program, such as Medicare and Medicaid. The Stark Law 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.

186 Compliance with the Federal Anti-Kickback Statute Policy The policy provides that the: Vice President/Chief Compliance Officer annually review the Focus Arrangements (i.e. contracts) database, the Medical Center s internal review and approval process, and other procedures to monitor the Medical Center s compliance with the requirements of the Corporate Integrity Agreement, our policies and applicable regulations; Vice President/Chief Compliance Officer report the results of the annual review to the Medical Center s Compliance & Integrity Committee and Board Audit Committee; Legal Services Department tracks focus arrangements and is part of the required approval process;

187 Compliance with the Federal Anti-Kickback Statute Policy If an overpayment is identified, the Medical Center repay the overpayment to the appropriate payor within sixty (60) days after identification of the overpayment and take remedial steps within sixty (60) days to correct the problem, including preventing the underlying problem and the overpayment from recurring; If there is an activity which may be deemed to violate the AKS or Stark Law, the Vice President/Chief Compliance Officer shall notify the Office of Inspector General through the self-referral disclosure protocol (SRDP).

188 Agreements and Payments to Physicians and Other Referral Sources Policy Administrative Policy A(11) (Agreements and Payments to Physicians and Other Referral Sources) states that the Medical Center shall not provide, directly or indirectly, any payment or other financial incentive to any individual or entity in exchange for making, arranging or directing, directly or indirectly, referrals of patients to the Medical Center. Legal Services will analyze whether an applicable arrangement meets an Exception or Safe harbor It is a case by case analysis that must be made before entering an agreement

189 Agreements and Payments to Physicians and Other Referral Sources Policy The policy requires that the contract with a referral source: Be in writing, signed and dated by the parties; Specify a timeframe for the arrangement, which term must not be for less than one (1) year; Specify the consideration (e.g., rent, purchase price, compensation) and be consistent with fair market value; and Be intended to obtain or provide an item or service that is reasonable and necessary for a legitimate business purpose.

190 Agreements and Payments to Physicians and Other Referral Sources Policy The policy also provides: All agreements with actual or potential referral sources be (a) reviewed and approved by the appropriate Vice President or CEO and (b) separately reviewed and approved by Legal Services; Prior to issuing or accepting payment under an agreement with a referral source, an active and executed agreement must be in place and, if required, a completed timesheet submitted to the Medical Center s Accounting Department; Internal Audit will perform an annual audit; and Payments will be held until the above requirements are met.

191 Report and Return of Overpayments to Federal Health Care Programs Policy Administrative Policy A(10) (Report and Return of Overpayments to Federal Health Care Programs) states that any overpayments identified during billing compliance routine monitoring, internal audits, or investigations and confirmed as overpayments be reported and refunded. This would include any overpayments pertaining to arrangements with referral sources.

192 Non-Monetary Compensation to Physicians and Their Immediate Family Members and Medical Staff Incidental Benefits Policy Administrative Policy I(31) (Non-Monetary Compensation to Physicians and Their Immediate Family Members and Medical Staff Incidental Benefits) provides guidance with respect how compensation in the form of certain items and services is treated under the non-monetary compensation exception of the Stark Law.

193 Non-Monetary Compensation to Physicians and Their Immediate Family Members and Medical Staff Incidental Benefits Policy The Medical Center may provide non-monetary compensation to the physician or an immediate family member of the physician if it satisfies an exception providing the non-monetary compensation: Is not in the form of cash or a cash equivalent (e.g., gift certificate); Does not take into account the volume or value of referrals; Was not solicited, directly or indirectly, by the physician or his/her immediate family member; Does not, when added to all other non-monetary compensation in a calendar year, exceed the cap established by CMS;

194 Non-Monetary Compensation to Physicians and Their Immediate Family Members and Medical Staff Incidental Benefits Policy Does not violate the AKS or any Federal or State law or regulation governing billing or claims submission; and, Is reported to the Medical Center s Medical Affairs Department using the Non Monetary Compensation Reporting Form.

195 Non-Monetary Compensation to Physicians and Their Immediate Family Members and Medical Staff Incidental Benefits Policy Examples of non-monetary compensation include, but are not limited to: Staff events such as picnics, golf tournaments; Welcome gift baskets; Birthday gifts; Doctor Day gifts; Gifts for holidays; Tickets to sporting events; Concerts and performances

196 Non-Monetary Compensation to Physicians and Their Immediate Family Members and Medical Staff Incidental Benefits Policy The Medical Center may provide medical staff incidentals (e.g., free or discounted meals such as those served in physician s lounge, meals served at governing board meetings and/or medical staff committee meetings, and computer/internet access provided in the building) providing certain conditions are met. Medical staff incidental benefits are not required to be reported to Medical Affairs.

197 Non-Monetary Compensation to Physicians and Their Immediate Family Members and Medical Staff Incidental Benefits Policy The policy requires the Medical Affairs Department to: Maintain a log of all non-monetary compensation provided to the physician and his/her immediate family members; Provide education of the policy to applicable departments and team members; and Report non-monetary compensation to the Compliance & Integrity Department on a quarterly basis.

198 Contract Review and Approval Policy Administrative Policy H(6) (Contract Review and Approval) sets forth guidelines for the orderly process and administering of contracts between the Medical Center and parties to a Focus Arrangement.

199 Contract Review and Approval Policy Step 1: Finalize the business terms for the Contract, complete the Contract Request Form, and submit the Contract Request form online; The Medical Center uses a database to process and track contracts;

200 Contract Review and Approval Policy Step 2: The Contract is forwarded to your Vice President and to the Finance Department; All contracts require approval by both the Vice President and the Finance Department; The Vice President and the Finance Department will make sure the service is needed, the requirements are met and there is a Fair Market Value (FMV) determination; As it relates to physicians, the Physician Compensation Plan can be consulted regarding the FMV determination. Note: To make the contracting process go smoothly talk with your Vice President about how to get the FMV determination.

201 Contract Review and Approval Policy Step 2 (continued): The purpose of this physician compensation plan is to standardize how compensation is determined and the level of compensation provided for physicians within the same specialty across the system. This compensation plan is based primarily on individual physician production as measured by work relative value units (wrvus) and was developed with SullivanCotter s assistance. SullivanCotter is an independent consulting firm specializing in compensation advisory services for the health care and higher education industries.

202 Contract Review and Approval Policy Step 3: Legal Services reviews all contracts; Legal Services reviews the contract for compliance as well as makes the final determination of whether the arrangement falls within an exception or Safe harbor; If a Safe harbor or exception applies a Medical Center attorney will complete the Safe harbor assessment sheet; If a Safe harbor or exception does not apply then Legal Services will contact you to discuss.

203 Contract Review and Approval Policy Step 4: After Legal Services approves a contract, the contract will be forwarded to the CEO, CFO or Vice President for final signature.

204 Contract Review and Approval Policy Step 5: Follow the contract until the contract is completed; Contracts are completed only when signed by both parties and a signed copy is in the database; Physician payments will not be processed without a completed contract.

205 Your Responsibility Know the laws that apply to your role and if you don t know ask Legal Services; Make sure all contracts meet the Medical Center s policies and procedures prior to submission; You are not responsible to know everything - you are responsible to ask; Responsible to follow the process; You are responsible to get Legal Services a signed and executed contract.

206 Reporting Compliance Concerns Supervisor, Practice Manager Human Resources Chief Compliance Officer, Mona Thompson ( ) Compliance Officer, Heather Marcum ( ) Compliance Concern Form: Integrity-Reporting/Compliance-Concern-Form.aspx Anonymous Compliance Hotline or

207 Compliance & Integrity Department You may access the Compliance & Integrity Department to review the Code of Conduct, General Compliance Training, Compliance Program Policies and Procedures, Compliance Concern Form and other reference material by selecting: Integrity-Reporting.aspx

208 Code of Conduct

209 Code of Conduct