2012 Health Law Education Program: Anatomy of a Self- Disclosure Telling CMS About Your Stark Law Problems

Transcription

1 2012 Health Law Education Program: Anatomy of a Self- Disclosure Telling CMS About Your Stark Law Problems October 24, :00 p.m. 1:00 p.m. Central Web Seminar

2 Continuing Education Information We have applied for one hour of California, Texas and Virginia CLE and New York non-transitional CLE credit. Newly admitted New York attorneys may not receive non-transitional CLE credit. For attendees outside of these states, we will supply a certificate of attendance which can be used to apply for CLE credit in the applicable bar or other accrediting agencies. Fulbright will supply a certificate of attendance to all participants that: 1. Participate in the web seminar by phone and via the web. 2. Complete our online evaluation, which we will send tomorrow. 2

3 Administrative Information Today s program will be conducted in a listen-only mode. To ask an online question at any time throughout the program, simply click on the question mark icon located on the tool bar. We will try to answer your question during the session if time permits. Everything we say today is opinion. We are not dispensing legal advice, and listening does not establish an attorney-client relationship. This discussion is off the record. Anything we say cannot be quoted without our prior express written permission. 3

4 Speakers Rick Robinson Partner Washington, D.C Debbi Johnstone Partner Houston, TX Lesley Reynolds Senior Associate Washington, D.C

5 Stark Law Basics The Stark Law prohibits a physician from referring Medicare or Medicaid patients to an entity for the furnishing of designated health services ( DHS ) if the physician (or immediate family member) has a financial relationship (either through ownership or compensation) with the entity. No Medicare or Medicaid payments may be made to the DHS entity unless the relationship qualifies for an exception. 5

6 Stark Law Violations Disgorgement: Payments received during the period of disallowance must be returned. Because of disgorgement, and because DHS entities are not entitled to Medicare payments made under improper referrals, any payment received in violation of the Stark Law is treated by Medicare as an overpayment. 6

7 Stark Law Violations Stark Law violations can also lead to: Civil monetary penalties; False Claims Act liability; Exclusion from Medicare and Medicaid programs. Identifying a Stark Law violation (or at least a problem) may be easy, but determining the extent of the overpayment can be very difficult. Stark Self-Disclosure Protocol (SRDP) 7

8 Common Defenses to Stark Law Violations Do you have a financial relationship that implicates the Stark Law at all? Are there referrals? Does the physician send Medicare or Medicaid patients to the DHS entity, or refer to the entity for services or products to be furnished to Medicare or Medicaid patients? Is there a financial relationship with a physician or an immediate family member of the physician? Ownership or compensation Most commonly see payments or transfers of value to physicians for services, leases. 8

9 Common Defenses to Stark Law Violations Did the financial relationship meet a Stark exception? Common exceptions: Space or equipment leases or personal services arrangements. Both require, e.g.: Signed, written agreement with a one year term; Personal services or leased space/equipment specified; Services or leased space/equipment should be reasonable and necessary; Payment or rent should be set in advance, not change over the term, not vary with the volume or value of business generated, and be consistent with fair market value. Is the arrangement actually indirect rather than direct? If the arrangement does not meet an exception, affected referrals may be prohibited. 9

10 Common Defenses to Stark Law Violations Is there any way to rescue the arrangement? Could the arrangement be noncompliant: Due to lack of a signature? Because of an expired personal services or lease agreement, but the arrangement is within the 6-month holdover period? (When renewing contracts during or upon completion of the holdover period, the effective date of the renewed agreement should be prospective and not retroactive to the expiration date of the prior contract.) For reasons outside your control? 10

11 Missing Signatures 42 CFR (g) May only use this provision once every 3 years for any referring physician (whether the 30 or 90 period was used) Different rules apply depending on whether the failure to meet the signature requirement was: Inadvertent; or Non inadvertent (i.e., the failure was knowing ) 11

12 Missing Signatures Lack of signature is inadvertent: Must obtain required signature(s) within 90 days after the arrangement became noncompliant Must otherwise comply with all criteria of the applicable exception CMS: We do not believe that it is necessary to define inadvertent; parties should attach the ordinary meaning to inadvertent. 73 Fed. Reg , (Aug. 19, 2008). 12

13 Missing Signatures Lack of signature is not inadvertent: Must obtain required signature(s) within 30 days after the arrangement became noncompliant Must otherwise comply with all criteria of the applicable exception CMS example of a knowing failure to comply with the signature requirement: [A] hospital contracts with a physician to provide medical directorship of a service at the hospital beginning January 1; the physician begins providing services on January 1 and refers patients to the hospital for DHS; the physician does not sign the written agreement until January 15, when it is returned from the physician's attorney following legal review; and, at all times up to January 15, both the physician and the hospital are aware that the physician had not signed the agreement. 73 Fed. Reg , (Aug. 19, 2008). 13

14 Missing Contracts Is a direct exception required? Is any exception available for the proposed compensation arrangement that does not require a written agreement (e.g., bona fide employment, isolated transactions)? 14

15 Holdovers Expired office space lease or equipment lease Month-to-month holdover lease for 6-months Must follow a lease of at least one year Holdover is on the same terms and conditions as the expired lease Must meet other requirements of the lease exception 42 CFR (a)(7) & (b)(6) Expired personal services agreement Month-to-month holdover agreement for 6-months Must follow an agreement of at least one year Holdover is on the same terms and conditions as the expired agreement Must meet other requirements of the personal services exception 42 CFR (d)(1)(vii) Not available under the fair market value exception 15

16 Reasons Beyond the Entity s Control 42 CFR (f) Financial relationship complied with a Stark exception for at least 180 days prior to becoming noncompliant Noncompliance was caused by reasons beyond the control of the entity Entity took prompt steps to rectify the noncompliance Covers payments made during the 90 days after noncompliance began 16

17 Reasons Beyond the Entity s Control Can only be used once every 3 years for any referring physician The relationship cannot violate the anti-kickback statute Does not apply to the referral exceptions for nonmonetary compensation and medical staff incidental benefits CMS example: [T]his exception will allow rural providers that fall out of compliance with [the Stark exception for rural providers] through redesignation of a rural area as a non-rural area time to finish patients' existing courses of treatment or refer patients to other providers. 69 Fed. Reg , (Mar. 26, 2004) 17

18 Period of Disallowance Starts when the relationship became non-compliant; ends when technical requirements met, excess compensation paid back, or insufficient compensation paid (e.g., below FMV rent). Physician s payment back of excess compensation does not undo the period of disallowance; it only ends the period of disallowance 18

19 What s Changed to Make Overpayment Issues More Difficult? Changes in the law have created liability for merely retaining overpayments. Swift pace of a 60-day timeframe for repayment. CMPs may be assessed when overpayments are not timely reported and repaid. Generally, there is an extremely heightened enforcement environment: Government creation of HEAT (Health Care Fraud Prevention and Enforcement Action Team); and President Obama and politicians from both parties have promised to control rising health care costs through fraud enforcement. 19

20 Retaining Overpayments: Grounds for Liability Overpayments become obligations 60 days after they are identified (or when the next cost report is due, whichever is later). FCA and CMP have similar grounds for liability for retaining overpayments: FCA: Obligations cannot be knowingly and improperly retained. 31 USC 3729(a)(1)(G) and (b)(3). CMP: Cannot be knowingly retained. 42 USC 1320a- 7a(a)(10). Even after a provider discloses and repays an overpayment, a provider can still be liable for retaining the overpayment for more than 60 days after identifying it. 20

21 When Does the 60-Day Clock Start? Proposed rule: When a person acts with actual knowledge of, in deliberate ignorance of, or with reckless disregard to the overpayment s existence. Unclear when a provider s ignorance becomes deliberate, or when disregard becomes reckless although failing to conduct an inquiry would trigger this standard. But the 60-day clock does not start running until an investigation identifies an actual overpayment. 21

22 Identifying Overpayments: Moving with All Deliberate Speed Proposed rule: Inquiry should be conducted with all deliberate speed. Does CMS expect investigations at the plodding bureaucratic pace interpreted in Brown v. Board of Education cases? Would courts interpret this phrase in the context of overpayments so generously? CMS has not distinguished between investigating the existence vs. the amount of an overpayment: aspects of same inquiry? So, does the clock stop until you determine the extent? Most cautious approach would be to conduct all inquiries into the existence and amount of overpayments with the expectation that CMS and courts will require them to be resolved expeditiously. 22

23 Disclosing Overpayments: Stark Violations Evaluate whether refund to the MAC is an available resolution Many of the MAC overpayment refund forms allow the refund reason of Other Frequently, a refund is not a reasonable option as the amount of the potential overpayment is significant Most likely to be a viable option if period of disallowance is short and physician doesn t typically generate many Medicare referrals (e.g., a plastic surgeon) Providers previously used the OIG Self-Disclosure Protocol to resolve self-referral issues under the Stark Law, but, since 2009, the OIG requires a colorable Anti-Kickback violation. ACA created a protocol for Stark-only violations. 23

24 Disclosing Pure Stark Law Violations: the Self-Referral Disclosure Protocol Under the ACA, which created the SRDP, the Secretary of Health and Human Services has the discretion to reduce penalties for Stark Law violations. CMS released the SRDP on September 23, 2010 and revised it on May 6, SRDP process is being used, but settlements are slow to emerge. 24

25 Self-Referral Disclosure Protocol: What to Include Description of violation, which should list: Name, address, NPIs, CCNs, and TINs of disclosing party; Description or diagram explaining pertinent relationships and names and addresses of any related entities; Name and address of the disclosing party s designated representative for the voluntary disclosure; Description of matter being disclosed, including names and roles of those believed to be implicated; Statement of why a Stark Law violation may have occurred, including an analysis applying the Stark Law; Discovery of the issue and steps taken to address the issue and prevent future abuses; (continued) 25

26 Self-Referral Disclosure Protocol: What to Include Description of violation, which should list: Whether the disclosing party has a history of similar conduct or has prior enforcement actions against it; Description of pre-existing compliance program and actions taken to restructure arrangement or noncompliant relationship; Description of notices provided to other government agencies, if applicable; Indication of whether the matter is under current inquiry by the government; and Disclosure of other government inquiries or investigations involving federal health care programs. 26

27 Self-Referral Disclosure Protocol: Financial Analysis Financial Analysis The amount, itemized by year, that is actually or potentially due based upon applicable look back period which can be limited to four years based on CMS s guidance in FAQs; Methodology used (indicate whether estimates were used and how they were calculated); and Summary of auditing activity and documents relied upon. Certification 27

28 Submission Submit to & mail copy to CMS. Automated Response from CMS: 28

29 Verification & Payments CMS will verify disclosure information and may request additional information. CMS will not accept any presumed overpayments before completing its inquiry. Parties should consider placing funds in interestbearing escrow account. Parties must refrain from making payments to federal health care programs or their contractors relating to the matter without CMS s consent. 29

30 CMS s Payment Considerations No obligation to reduce amounts due. CMS may consider the following factors in reducing amounts otherwise owed: The nature and extent of the disclosed practice; The timeliness of the self-disclosure; The cooperation in providing additional information related to the disclosure; The litigation risk associated with the matter disclosed; and The financial position of the disclosing party. 30

31 What s Happened So Far with SRDP Disclosures? So far, descriptions of about a dozen settlements have been posted on the CMS website. CMS has indicated that it does not intend to negotiate settlements Settlement amounts have ranged widely from just $60 to over $500,000. Last March, HHS reported that 150 disclosures had been submitted from the reported settlements, it appears that the vast majority of these matters have not yet been resolved. Now that the ACA has been upheld in relevant part, providers hope to see more settlement activity for submitted self-disclosures in the months to come. 31

32 What s Happened So Far with SRDP Disclosures (cont.)? 2/10/11 Most expensive settlement to date. $579,000. Massachusetts hospital settled violations with respect to personal services exceptions certain medical staff and on-site coverage. 9/10/11 Next settlement. $60. Physician group settled 2 instances of prescriptions violating the in-office ancillary exception. 1/5/12 4/5/12 5 settlements. Three hospitals settle non-monetary compensation limit claims ranging from $4,500 - $6,800. Locum tenens settlement - $22,000. Physician Group settles bona fide employment exception claim - $74,000. 6/13 8/22/12 5 settlements ranging in $22,000 $208,

33 If You Disclose: Other Considerations Disclosure through the SRDP is an admission of a violation. Entities with CIAs or CCAs must now report Stark issues using SRDP. HHS cooperation with OIG and DOJ. No need to use both the SRDP and the Anti-Kickback self-disclosure protocol; Government entities will communicate. Is a separate release needed from the OIG on Stark-related overpayments? CMS has sought comment on how providers can avoid multiple reports of overpayments from Stark violations. 33

34 Differences between the SRDP and OIG s SDP CMS s Self-Referral Disclosure Protocol OIG s Self-Disclosure Protocol Applies to Stark Law violations. Stark & AKS violations but requires a colorable violation of AKS; stand-alone Stark violations not covered. Complete Legal and Financial Analyses Past Conduct Must include detailed description of violation and applicability of Stark law to matter disclosed. Must provide detailed financial analysis with initial disclosure for period of noncompliance, including a final amount, itemization by year, and methodology. Party must disclose past similar conduct and any prior enforcement actions. Internal investigation, self-assessment, and report of findings to OIG expected after submission of initial disclosure. No mention of past conduct. Advisory Opinion Process Party is limited to one or the other, but not both simultaneously. No mention of advisory opinion process. Required Use for CIAs and CCAs Must be used by parties with CIAs or CCAs to report Stark-only violations. Not required. Method of Filing Mail and . Mail only. 34

35 Continuing Education Information For those attorneys requesting New York State CLE credit for this presentation, please record the number given during the program. You will be asked to repeat this number on an online evaluation regarding the program, which Fulbright will to you tomorrow. If you are viewing a recording of this web seminar, most state bar organizations will only allow you to claim selfstudy CLE credit. Please refer to your state's CLE rules. If you have questions regarding CLE approval of this course in your applicable bar, please contact your bar administrator. 35

36 AUSTIN BEIJING DALLAS DENVER DUBAI HONG KONG HOUSTON LONDON LOS ANGELES MINNEAPOLIS MUNICH NEW YORK PITTSBURGH-SOUTHPOINTE RIYADH SAN ANTONIO ST. LOUIS WASHINGTON, D.C FULBRIGHT [ ] 36