Audit, Compliance, and Regulatory Guidelines

Transcription

1 Audit, Compliance, and Regulatory Guidelines Presented by: Rae Jimenez, CPC, CPB, CPMA, CPPM, CPC-I, CCS Some set disclaimer thingy----- Federal Regulations Fraud and Abuse Regulations Some set disclaimer thingy

2 Fraud and Abuse Fraud Making false statements or misrepresenting facts to obtain an undeserved benefit or payment from a federal health care program. Abuse An action that results in unnecessary costs to a federal health care program, either directly or indirectly 3 Fraud and Abuse Fraud examples: Billing for services and/or supplies that you know were not furnished or provided Altering claim forms and/or receipts to receive a higher payment amount Billing a Medicare patient above the allowed amount for their service Billing for services at a higher level than provided or necessary Misrepresenting the diagnosis to justify payment Abuse examples: Misusing codes on a claim Charging excessively for services or supplies Billing for services that were not medically necessary Failure to maintain adequate medical or financial records Improper billing practices Billing Medicare patients a higher fee schedule than non-medicare patients 4 2

3 Federal Regulations Fraud and Abuse Federal False Claims Act The False Claims Act prohibits the submission of false or fraudulent claims to the Government. Stark Law and Anti-Kickback Law The Stark Law Bans referrals to entities for a DHS. The Anti-Kickback Law prevent providers from receiving remuneration for referrals. The Exclusions Statute Under the Exclusions Statute, a physician may be banned from participating in any Federal or State health care program by the OIG. Civil Monetary Penalties Law The Civil Monetary Penalties Law allows the OIG to seek Civil Monetary Penalties for a wide variety of conduct. Federal False Claims Act 31 U.S.C. 3729(a).1. Prohibits the submission of false or fraudulent claims to the Government The FCA is not violated merely by submitting a false claim, but rather by submitting (or causing to be submitted) a false claim with knowledge that it is false. Section 3729 b.1 defines the terms knowing and knowingly such that a person must act in deliberate ignorance of the truth or falsity of the relevant information, or acts in reckless disregard of the truth or falsity of the information; however, the Act states that a violation may occur even if there no intent to defraud. Examples: Falsifying a medical chart notation Submitting claims for services not performed, not requested, or unnecessary Submitting claims for expired drugs Upcoding and/or unbundling services Submitting claims for physician services performed by a non-physician provider (NPP) without regard to Incident-to guidelines 6 3

4 Federal False Claims Act Qui Tam Provision The Department of Justice obtained more than $3.5 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year ending Sept. 30, Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department s Civil Division, announced today. This is the fourth year in a row that the department has exceeded $3.5 billion in cases under the False Claims Act, and brings total recoveries from January 2009 to the end of the fiscal year to $26.4 billion. Most false claims actions are filed under the Act s whistleblower, or qui tam, provisions that allow individuals to file lawsuits alleging false claims on behalf of the government. If the government prevails in the action, the whistleblower, also known as the relator, receives up to 30 percent of the recovery. Whistleblowers filed 638 qui tam suits in fiscal year 2015 and the department recovered $2.8 billion in these and earlier filed suits this past year. Whistleblower awards during the same period totaled $597 million. 7 Federal False Claims Act Qui Tam Rewards Blue Cross Blue Shield of Massachusetts paid $2.75 million after putting in false Medicare reports, inflating the number of claims it processed and exaggerating the speed with which claims were processed. Because of this fraudulent activity, it received larger Government reimbursements than it was entitled to. The relator was a former employee of BCBS Massachusetts and recovered $550,000. Blue Cross Blue Shield of Michigan paid $27,600,000 in a Qui Tam action for submitting false documentation and fraudulent billing. The fraud occurred when the Government tried to review a specific set of audits and BCBS backdated their audits to hide what it had done. Mr. Flynn, a man who had performed audits for Blue Cross Blue Shield, blew the whistle and was rewarded $5,500,

5 Federal False Claims Act Qui Tam Rewards For Unnecessary Tests, False Billings, Medicare Fraud Damon Clinical Laboratories, Inc. fraudulently billed Medicare, Medicaid and CHAMPUS by bundling medically unnecessary tests not knowingly ordered by doctors. The Government recovered $83,700,000 and Jeanne Byrne, one of three whistleblowers, received $9,000,000. For Laboratory Billing Practices; Medicare/Medicaid Fraud In another Medicare/Medicaid case involving GlaxoSmithKline and a whistleblower in which a man named Merena blew the whistle on fraudulent laboratory billing practices the Department of Justice received $333 million. After a seven day evidentiary hearing to determine the relator s share, Mr. Merena was awarded $52,049, Federal False Claims Act False Claims Act Penalties The statute originally provided for a civil penalty of not less than $5,000, and not more than $10,000, per claim, plus three times the amount of the Government damages if FCA liability was found. This amount is occasionally increased based on the Federal Civil Penalties Inflation Adjustment Act (FCPIA). Current penalties are $5,500 to $11,000 per claim. The person in violation will also be liable for the costs of the civil action brought to recover any such penalty or damages. Example: A company was found to have submitted 554 false and fraudulent claims to Medicare, totaling approximately $309, claims x $11,000 = $6,094,000 Loss to government $309,456 x 3 = $928,368 $6,094,000 + $928, 368 = $7,022,368 total fines 10 5

6 Federal False Claims Act False Claims Act Penalties The FCA allows for reduced penalties (mitigation) if the person committing the violation selfdiscloses a.2 states that the court may assess not less than two times the amount of damages (as opposed to three times), which the Government sustains because of the act of that person, if: the person responsible furnishes officials of the United States responsible for investigating false claims violations with all information known to such person about the violation within 30 days after the date on which the defendant first obtained the information; such person fully cooperates with the investigation of such violation; and at the time such person furnishes the information about the violation, no criminal prosecution, civil action, or administrative action has commenced under this title with respect to such violation, and the person did not have actual knowledge of the existence of an investigation into such violation. 11 Physician Self-Referral Law 42 U.S.C. 1395nn Bans referrals to entities for a DHS The Physician Self-Referral law is also known as the Stark law as it was named after Pete Stark. This law prohibits physicians from referring patients to receive designated health services from entities with which the physician or an immediate family member has a financial relationship, with a few exceptions. This law applies to services payable by Medicare or Medicaid. Proof of specific intent to violate the law is not required. Penalties for physicians who violate the Stark law include fines as well as exclusion from participation in the federal health care program. $15,000 per service Three times the amount claimed Designated Health Services (DHS) clinical laboratory services; physical therapy services; occupational therapy services; radiology services; radiation therapy services; durable medical equipment and supplies; parenteral and enteral nutrients, equipment, and supplies; prosthetic and orthotic devices and supplies; home health services; outpatient prescription drugs; and inpatient and outpatient hospital services 12 6

7 Examples of Violations of Stark Law $237,454,195 judgment against Tuomey Healthcare System (Tuomey), a small, nonprofit hospital in Sumter, South Carolina, on July 2, The heart of the case involves 19 part-time physician employment agreements that Tuomey entered into with surgeons on its medical staff. The impetus for these arrangements apparently arose from a concern that these physicians were increasingly performing outpatient surgeries at their offices or at ambulatory surgery center (ASC) facilities, rather than as outpatient hospital surgeries, and thus Tuomey was losing revenue it would otherwise receive from the facility fees generated by outpatient hospital services. According to the whistleblower and the government, Tuomey entered into these part-time employment agreements in order to stem the loss of this business. 13 Anti-Kickback Law 42 U.S.C. 1320a-7b(b) Prohibits remuneration to induce or reward patient referrals The Anti-Kickback law is similar to the Stark law but imposes more severe penalties, making it a felony to receive payment or remuneration in return for referring a patient to another entity. This law requires proof of intention, and states that the person must knowingly and willfully violate the law. This law applies to referrals from anyone, not just physicians and applies to any items or services. Penalties include criminal fines of up to $25,000 per violation and up to a 5 year prison term per violation. In addition, civil penalties may be applied including: False Claims Act liability Civil monetary penalties and program exclusions Potential $50,000 CMP per violation Civil assessment of up to three times the amount of kickback 14 7

8 Anti-Kickback Law 42 U.S.C. 1320a-7b(b) Example: Medicare and Medicaid programs require patients to pay copays for service. Physicians are required to collect the copays due from the patients. When these copays are routinely waived, the physician could violate the Anti-Kickback law. You may waive a copy if an individual determination is made that the patient cannot afford to pay, or if you have made reasonable collection efforts and they have failed. 15 Waive Amounts Owed by Medicare Beneficiaries for Self-Administered Drugs OIG Policy Statement Regarding Hospitals That Discount or Waive Amounts Owed by Medicare Beneficiaries for Self-Administered Drugs Dispensed in Outpatient Settings Ordinarily, routine discounts or waivers of costs owed by Medicare beneficiaries, including cost-sharing amounts, potentially implicate the Federal anti-kickback statute,6 the civil monetary penalty and exclusion laws related to kickbacks,7 and the Federal civil monetary penalty law prohibiting inducements to beneficiaries.8 Nonetheless, in the limited circumstances described in this Policy Statement, hospitals will not be subject to OIG administrative sanctions if they discount or waive amounts that Medicare beneficiaries owe for Noncovered SADs (including Noncovered SADs that may be covered under Medicare Part D) the beneficiaries receive in outpatient settings, subject to the following conditions: This Policy Statement applies only to discounts on, or waivers of, amounts Medicare beneficiaries owe for Noncovered SADs that the beneficiaries receive for ingestion or administration in outpatient settings;9 Hospitals must uniformly apply their policies regarding discounts or waivers on Noncovered SADs (e.g., without regard to a beneficiary s diagnosis or type of treatment); Hospitals must not market or advertise the discounts or waivers; and Hospitals must not claim the discounted or waived amounts as bad debt or otherwise shift the burden of these costs to the Medicare or Medicaid programs, other payers, or individuals. 16 8

9 The Exclusions Statute 42 U.S.C. 1320a-7 Requires the OIG to exclude providers from federal healthcare programs for certain violations The Exclusion Statute legally requires the OIG to exclude individuals or entities from participation in all federal health care programs who have been convicted of: Medicare or Medicaid fraud or other offenses related to the delivery of items or services under Medicare or Medicaid. Patient abuse or neglect Felony convictions for other health care related fraud, theft, or other financial misconduct Felony convictions for unlawful manufacture, distribution, prescription or dispensing of controlled substances Exclusion can be mandatory or permissive. The exclusion will not be less than five years, but could be longer if aggravating factors exist. 17 Civil Monetary Penalties Law 42 U.S.C. 1320a-7a Allows the OIG to seek Civil Monetary Penalties for a wide variety of conduct The Social Security Act authorizes the Secretary of HHS to seek civil monetary penalties, assessments, and exclusions for many types of conduct. The Secretary of HHS has delegated many of these authorities to the OIG. The Civil Monetary Penalties Law (CMPL) contains many of the OIG s civil monetary penalties (CMPs). One of the reasons the OIG may seek CMPs against a person is for improper filing of claims. The law states that any person is in violation if he or she knowingly presents, or causes to be presented, a claim to any Federal or State agency that the Secretary determines: is for a medical service or other item or service that the person knows or should know was not provided as claimed, including any person who engages in a pattern or practice of presenting or causing to be presented a claim for an item or service that is based on a code that the person knows or should know will result in a greater payment to the person than the code the person knows or should know is applicable to the item or service actually provided (upcoding, miscoding, etc); is for a medical or other item or service and the person knows or should know the claim is false or fraudulent; is presented for a physician s service, or item or service incident to a physician s service, by a person who knows or should know that the individual who furnished or supervised the service was not a licensed physician, was a licensed physician but with a license obtained through a misrepresentation of material fact, or represented to the patient at the time the services was furnished that the physician was certified in a medical specialty by a medical specialty board when they individual was not so certified; is for a medical or other service that was furnished during a period in which the person was excluded from the Federal health care program under which the claims was made; is for a pattern of medical or other items or services that a person knows or should know are not medically necessary. 18 9

10 Civil Monetary Penalties Law 42 U.S.C. 1320a-7a Process The OIG will initiate the case by sending a demand letter outlining the CMP, assessment, and/or exclusions sought by the OIG, and the facts supporting the sanction. If the subject of the action disagrees, he/she can request a hearing before an HHS administrative law judge (ALJ). The OIG will seek to settle the allegations before proceeding to action. If a settlement is not reached, the law provides for the method of proceeding. There is also a provision for review by a court of appeals that a defendant may file within 60 days of a determination of guilt. 19 Civil Monetary Penalties Law 42 U.S.C. 1320a-7a Penalties CMPs may range from up to $10,000 to $50,000 per violation, depending on the type of violation and the entity. They may also include an assessment of up to three times the amount claimed for each item or service, or up to three times the amount of remuneration offered, paid, solicited, or received. For example, for fraudulent claims, the OIG may seek a penalty of up to $10,000 for each item or service improperly claimed, and an assessment of up to three times the amount of the improperly claimed. Example The OIG investigates a provider for billing for services that were not rendered. It is determined the provider submitted 25 fraudulent claims, resulting in $20,000 in over-payments made to the provider. The maximum penalty the OIG may seek for fraudulent claims is $10,000 per item or services and an assessment of up to three times the amount of the over-payments. Calculation of maximum penalty: 25 claims x $10,000 = $250,000 $20,000 in overpayments x 3 = $60,000 $250,000 + $60,000 = $310,000 maximum penalty that can be assessed

11 Office of Inspector General U.S. Department of Health & Human Services OIG Work Plan Sets forth various projects to be addressed during the fiscal year by the Office of Audit Services, Office of Evaluation and Inspection, Office of Investigations, and Office of Counsel to the Inspector General. Corporate Integrity Agreements Negotiated as part of a settlement of federal health care program investigations arising under a variety of civil false claims statutes. Compliance Plans Compliance program guidance to encourages development and use of internal controls to monitor adherence to applicable statutes, regulations, and program requirements. OIG Work Plan Example NEW Physician home visits reasonableness of services We will determine whether Medicare payments to physicians for evaluation and management home visits were reasonable and made in accordance with Medicare requirements. Since January 2013, Medicare made $559 million in payments for physician home visits. Physicians are required to document the medical necessity of a home visit in lieu of an office or outpatient visit. Medicare will not pay for items or services that are not "reasonable and necessary." (Social Security Act, 1862(a)(1)(A)) (OAS; W ; expected issue date: FY 2016) 22 11

12 OIG Work Plan Example NEW Prolonged services reasonableness of services We will determine whether Medicare payments to physicians for prolonged evaluation and management (E/M) services were reasonable and made in accordance with Medicare requirements. Prolonged services are for additional care provided to a beneficiary after an evaluation and management service has been performed. Physicians submit claims for prolonged services when they spend additional time beyond the time spent with a beneficiary for a usual companion evaluation and management service. The necessity of prolonged services are considered to be rare and unusual. The Medicare Claims Process (MCP) manual includes requirements that must be met in order to bill a prolonged E/M service code. (MCP manual, Pub , Ch. 12, Sec (OAS; W ; expected issue date: FY 2016) 23 Corporate Integrity Agreements Negotiated as part of a settlement of federal health care program investigations arising under a variety of civil false claims statutes Most CIAs have the same core requirements, along with specific steps for the individual or entity that are related to the conduct that led to the settlement. The core requirements are as follows for an individual or entity engaged in a corporate integrity agreement: Hiring a compliance officer/appointing a compliance committee; Developing written standards and policies; Implementing a comprehensive employee training program; Retaining an independent review organization (IRO) to conduct annual reviews; Establishing a confidential disclosure program; Restricting employment of ineligible persons; Reporting overpayments, reportable events, and ongoing investigations/legal proceedings; and Providing an implementation report and annual reports to the OIG on the status of the entity s compliance activities

13 Corporate Integrity Agreements Independent Review Organization (IRO) Retaining an independent review organization (IRO) to conduct annual reviews The CIA will contain the details of the IRO and the responsibility of the individual or entity in respect to the IRO Discover Sample 50 sampling units Error rate exceeding 5% prompts Full Sample Statistical sampling program RAT STATS 25 Compliance Plans Compliance plan core elements The OIG has identified seven elements that should be present in every compliance plan based on criteria adopted by the federal government in the federal sentencing guidelines. The OIG lists seven fundamental elements for an effective compliance program, which are: 1. Implementing written policies, procedures and standards of conduct; 2. Designating a compliance officer and/or compliance committee; 3. Conducting effective training and education; 4. Developing effective lines of communication; 5. Enforcing standards through well-publicized disciplinary guidelines; 6. Conducting internal monitoring and auditing; and 7. Responding promptly to detected offenses and developing corrective action 26 13

14 Compliance Plans Non-compliance The compliance guidance also indicates that whenever non-compliance is identified by the compliance staff, corrective action must be taken, although there can be varying degrees of disciplinary action. Any finding of non-compliant conduct must be documented in the compliance files and should include: date of incident name of the reporting party name of the person responsible for taking action the follow-up action taken 27 Compliance Plans Potential benefits Increasing accuracy of documentation; Increasing the speed and optimization of proper payment of claims; Minimizing billing mistakes; Reducing the chances that an audit will be conducted by CMS or the OIG; and Avoiding conflicts with the self-referral and anti-kickback statutes

15 Compliance Plans CMS five practical tips for creating a culture of compliance: 1. Make compliance plans a priority now. 2. Know your fraud and abuse risk areas. 3. Manage your financial relationships. 4. Just because your competitor is doing something doesn t mean you can, or should. 5. When in doubt, ask for help. 29 Centers for Medicare & Medicaid Services CMS Guidelines CoP/CfC Conditions of Participation and Conditions for Coverage RACs Recovery Audit Contractors NCCI & MUE National Correct Coding Initiative and Medically Unlikely Edits 15

16 Conditions of Participation/Conditions for Coverage Standards that must be met in order to participate The Federal Register sets forth standards in Conditions of Participation (CoP) and Conditions for Coverage (CfC) that must be met to participate in Medicare and Medicaid Programs. The standards include guidelines for documentation and apply to both hospitals and ambulatory surgery centers. 42 CFR outlines the Conditions of Participation for medical record services. The conditions include that each patient should have a medical record; medical records must be organized to allow for prompt completion, filing, and retrieval; record must be retained for at least five years; and, patient confidentiality should be protected. Although there are not Conditions of Participation specifically for providers, an auditor should understand the CoPs exist, and often define medical record standards for facilities. 31 Conditions of Participation/Conditions for Coverage Condition of participation: Medical record services. (4) All records must document the following, as appropriate: (i) Evidence of (A) A medical history and physical examination completed and documented no more than 30 days before or 24 hours after admission or registration, but prior to surgery or a procedure requiring anesthesia services. The medical history and physical examination must be placed in the patient's medical record within 24 hours after admission or registration, but prior to surgery or a procedure requiring anesthesia services. (B) An updated examination of the patient, including any changes in the patient's condition, when the medical history and physical examination are completed within 30 days before admission or registration. Documentation of the updated examination must be placed in the patient's medical record within 24 hours after admission or registration, but prior to surgery or a procedure requiring anesthesia services. (ii) Admitting diagnosis. (iii) Results of all consultative evaluations of the patient and appropriate findings by clinical and other staff involved in the care of the patient. (iv) Documentation of complications, hospital acquired infections, and unfavorable reactions to drugs and anesthesia. (v) Properly executed informed consent forms for procedures and treatments specified by the medical staff, or by Federal or State law if applicable, to require written patient consent. (vi) All practitioners' orders, nursing notes, reports of treatment, medication records, radiology, and laboratory reports, and vital signs and other information necessary to monitor the patient's condition. (vii) Discharge summary with outcome of hospitalization, disposition of case, and provisions for follow-up care. (viii) Final diagnosis with completion of medical records within 30 days following discharge

17 National Correct Coding Initiative (NCCI) Background Implemented to: promote correct coding methodologies; and control improper assignment of codes that result in inappropriate reimbursement. Based on: Standard medical and surgical practice; Coding conventions included in CPT; Coding guidelines developed by national medical societies; Local and national coverage determinations; and Review of current coding practices. 33 National Correct Coding Initiative (NCCI) NCCI Policy Manual Occasionally a provider may perform two procedures that should not be reported together based on an NCCI edit. If the edit allows use of NCCIassociated modifiers to bypass it and the clinical circumstances justify use of one of these modifiers, both services may be reported with the NCCIassociated modifier. However, if the NCCI edit does not allow use of NCCI-associated modifiers to bypass it and the procedure qualifies as an unusual procedural service, the physician may report the column one HCPCS/CPT code of the NCCI edit with modifier 22. The Carrier (A/B MAC processing practitioner service claims) may then evaluate the unusual procedural service to determine whether additional payment is justified

18 Medically Unlikely Edits (MUE) Edits based on units of service Lower the Medicare Fee-For-Service Paid Claims Error Rate Define maximum units of service that a provider would report: Under most circumstances For a single beneficiary One a single date of service For a specific HCPCS/CPT code 35 Recovery Audit Contractors (RACs) Overview Recovery Audit Contractors by region: Region A: Performant Recovery Region B: CGI Federal, Inc. Region C: Connolly, Inc. Region D: HealthDataInsights, Inc. RAC Requirements: Maintain 95% accuracy rate Maintain overturn rate of less than 10% 36 18

19 Recovery Audit Contractors (RACs) What do RACs audit? CMS approved issues Examples include: Cataract surgery-complex Inpatient rehab-complex Incorrect billing of hydration therapy-automated Major joint replacement-automated Incorrect billing of E/M-Complex 37 Recovery Audit Contractors (RACs) Types of review Automated - no medical record needed. Improper payments are determined based solely on the submitted claims and regulatory guidelines such as National Coverage Determinations, Local Coverage Determinations, and the CMS Manuals. Semi-Automated - claims review using data and potential human review of a medical record or other documentation. Medical records are supplied at the discretion of the provider to support a claim identified by data analysis as an improper payment. Complex - medical record required

20 Recovery Audit Contractors 39 Recovery Audit Contractors 40 20

21 Recovery Audit Contractor (RAC) RAC identifies improper payment Provider agrees: - Submit payment - request recoupment - extended payment plan Provider disagrees: - submit a discussion period request - submit a rebuttal - redetermination request 41 21