OIG and CMS Voluntary Self Disclosures: Weighing the Risks and Rewards of Self Reporting

Transcription

1 Presenting a live 90-minute webinar with interactive Q&A OIG and CMS Voluntary Self Disclosures: Weighing the Risks and Rewards of Self Reporting WEDNESDAY, SEPTEMBER 24, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Renee M. Howard, Partner, Perkins Coie, Seattle Thomas S. Schroeder, Partner, Faegre Baker Daniels, Minneapolis Jesse A. Witten, Partner, Drinker Biddle & Reath, Washington, D.C. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

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5 Part I: OIG s Self-Disclosure Protocol September 24, 2014 Perkins Coie LLP 1201 Third Avenue, Suite 4900 Seattle, WA Presented By Renee M. Howard RHoward@perkinscoie.com

6 OIG Self-Disclosure Protocol (SDP) Purpose: provide guidance to health care providers that decide voluntarily to disclose irregularities in their dealings with the Federal health care programs. 6 perkinscoie.com

7 SDP History Launched in Open Letter: SDP may result in less burdensome compliance agreement with OIG; providers encouraged to report both kickback and Stark law violations 2008 Open Letter: Generally no compliance agreement will be required if providers fully cooperate during SDP process 7 perkinscoie.com

8 SDP History 2009: SDP no longer appropriate for Stark-only violations; minimum damages threshold for the SDP is $50,000 Stark-only disclosure protocol launched by CMS in September 2010 April 2013: OIG overhauls and updates SDP Product of past settlement experience and comments from health care community Over 800 disclosures and $280M recovered in 15-year history 8 perkinscoie.com

9 Eligibility for SDP Who may use it? Not just providers- anyone who might be subject to OIG s civil monetary penalty (CMP) authority What conduct may be disclosed? Must implicate CMP authority and must constitute a potential violation No Stark-only violations No advisory opinions 9 perkinscoie.com

10 SDP Procedure Points Six-year statute of limitations tolled as of the submission date If investigation or damages calculation incomplete, must complete within 90 days of submission Corrective action must be complete before disclosure (and kickback arrangements unwound within 90 days of submission) Electronic submission format now available Simultaneous Stark law disclosure may also occur 10 perkinscoie.com

11 Submission Content Disclosing party must acknowledge that the conduct is a potential violation and explicitly identify the laws that were potentially violated No general references to Federal laws, rules, or regulations or the Social Security Act 11 perkinscoie.com

12 Submission Content 11 categories of information required for all submissions as well as subject-matter specific information for false billing, excluded person, and AKS/Stark disclosures. Greater emphasis on identifying the precise nature of the violation and relevant facts supporting the potential legal violation. 12 perkinscoie.com

13 AKS/Stark Disclosures The submission might explain, for example: How FMV was determined and why in question; Why payments from referral sources (e.g. rent) not made or did not conform to agreements and how long such lapses existed; Why the arrangement was commercially unreasonable; Whether payments were made for services not performed or documented and if so, why. 13 perkinscoie.com

14 False Billing Disclosures Calculating Damages: Report must include damages calculations Damages can be measured by a sampling review minimum sample of 100 Cannot offset overpayments with underpayments 14 perkinscoie.com

15 Excluded Person Disclosures Must explain how excluded status was missed and what corrective action was taken OIG now recommends monthly screening Must screen all current employees and contractors against LEIE before making submission Damages for employment of excluded person calculated as employment costs discounted by payor mix 15 perkinscoie.com

16 SDP Resolutions Minimum settlement amounts $50,000 for AKS-related submissions $10,000 for all others (e.g., exclusion) Minimum multiplier of 1.5 x (damages) SDP approach does not dictate OIG position in non-sdp contexts 16 perkinscoie.com

17 So, How d It Go? 65 SDP settlements in the last 12 months 42 (65%) resolved employment of excluded individual(s) $10,000-$1.98M 16 (25%) resolved false billing issues Upcoding, lack of documentation, noncovered services, falsified certifications, etc. $10,000 - $1.97M 17 perkinscoie.com

18 So, How d It Go? 7 (10%) resolved kickback issues Commercially unreasonable compensation and other improper remuneration $50,000 - $1.69M Settlements are announced on OIG website: Fraud / Enforcement Actions / Civil Monetary Penalties and Affirmative Exclusions / CMP Categories / False and Fraudulent Claims OR / Kickback and Physician Self-Referral 18 perkinscoie.com

19 OIG/CMS Voluntary Self-Disclosures: Weighing the Risks and Rewards Part II: SRDP Update September 24, 2014 Tom Schroeder, Partner Faegre Baker Daniels LLP

20 Brief history of SRDP Mandated by 6409 of PPACA Issued by CMS on Sept Resolved longstanding tensions between CMS and OIG over the latter s authority to resolve Stark violations 20

21 SRDP is like the SDP except where it s not... Both toll applicable reporting deadlines SRDP tolls the 60-day reporting requirement under ACA 6402 Both require internal investigation and good faith report SRDP requires detailed analysis of Stark exception elements Both require financial analysis of govt s damages SRDP requires calculation of referral value ( amount due and owing ) by arrangement and year Both ask about corrective actions SRDP asks about existence and adequacy of a pre-existing compliance program Both ask about other govt inquiries. 21

22 Differences between SRDP and SDP SRDP is for Stark-only violations If the matter raises AK issues, use OIG s SDP CMS has not publicized its settlement formula No minimum settlement number (like OIG s $50,000) No multiplier formula (like OIG s minimum 1.5x damages) SRDP has very definite look-back period Based on 4-year reopening period in 42 CFR (b) (until the proposed rule at 77 FR 9179 is finalized) SRDP may take more time Resolution under SDP averages less than 12 months SRDP queue seems much slower 22

23 Recent CMS notice of expedited process CMS invited comments on expedited process Notice at 79 Fed Reg at (May 2, 2014) Not rulemaking Could be applied to pending submissions Possible criteria for expediting? Document-only deficiencies Absence of fmv issues Potential community impact Issuance date? 23

24 The Lady or the Tiger? 24

25 SRDP settlement experience to-date Settlements posted at: Disclosure-Protocol-Settlements.html 52 settlements to-date: High = $584, violations by hospital/hospice in NC (Oct. 2012) Low = $60 Single IOAS violation by physician practice in OH (Sept. 2012) Average = $110,000 Median = $67,000 Statistics unreliable because CMS seldom reveals number of violations or aggravating factors 25

26 Types of violations disclosed EMR consulting Test supervision services Call coverage Non-monetary comp limits Medical staff leadership Employed physician comp Office rent Residency program services Medical directorships Hospitalist coverage Professional services Recruitment arrangements Locum tenens Clinic coverage DME orders and more! 26

27 Settlement observations CMS has staunchly refused to disclose any settlement formulae however: So-called technical violations appear to be settling for nominal sums (e.g., < $15,000 per violation) Missing signatures Expired (but otherwise compliant) contracts Lack of written agreement (but otherwise compliant arrangement) Little/no relation to value of tainted referrals Outcomes seem consonant with pre-srdp lobbying by AHA and current proposals to amend Stark Law 27

28 Settlement Observations Large systems are batching disclosures Settlements above $250,000 have involved multiple disclosures Group discounts not apparent Largest settlements held the longest Office rental violations seem to be hot Settling for above-nominal sums Stand-in-shoes implicates all shareholders referrals FMV questions may exacerbate technical defects 28

29 Settlement observations CMS proposed resolution amount is communicated as non-negotiable No appeal rights for any claims resolved through the SRDP You can withdraw from the SRDP anytime you like, but you can never leave 29

30 Settlement release CMS form release is very limited no release from potential liability under: FCA CMP statute CMP provisions of the Stark statute Program Fraud Civil Remedies Act Mandatory/permissive exclusion authorities Common law claims (e.g., mistake, restitution, unjust enrichment or fraud) Reopening of paid claims, cost reports 30

31 CAHs and the SRDP Significant number of CAH settlements under SRDP CAHs are blessed and cursed Potential community impact seems to have curried prompt and reasonable settlements But less integration, fewer compliance resources means more Stark risks Calculating financial impact is more complicated Multiply charges by cost/charge ratio Include non-admitting physician s DHS orders for inpatients

32 Duty to update SRDP requires parties to disclose: Knowledge that the matter is under current inquiry by a Government agency or contractor Investigation or other inquiry for other matters related to a Federal health care program [A]ny matters [the disclosing party] has disclosed to other Government entities SRDP, Section IV(B)(1)(h). 32

33 Duty to update? Duty to supplement initial SRDP disclosure? CMS expects to receive information from the disclosing party that relate to the disclosed matter without the need to resort to compulsory methods. cooperation in providing additional information related to the disclosure is an express settlement criterion under the SRDP A disclosing party that fails to fully cooperate during the selfdisclosure process will be removed from the SRDP Consequence of removal: Removal from SRDP reinstates 60-day period back to the date of submission Failed self-disclosure suddenly becomes prima facie FCA violation 33

34 Duty to update scenarios Should you update CMS regarding A whistleblower suit is unsealed prior to Government intervention? Yes, if the suit is based on the Stark issue disclosed What if the suit is entirely unrelated to submission (e.g., alleges upcoding under FCA)? Client makes an unofficial self-disclosure to local US Attorney? Client discloses a reimbursement issue to MAC (e.g., cost report errors)? 34

35 Conclusions SRDP remains a promising option for resolving Stark Law violations Average recoveries in whistleblower and government FCA cases far exceed average SRDP settlements Releases in SRDP settlements are narrow you get what you pay for 35

36 OIG and CMS Voluntary Self Disclosures: Weighing the Risks and Rewards of Self Reporting Part III September 24, 2014 Strafford Publications Jesse Witten (202)

37 Risks in Failure to Disclose > Affordable Care Act Failure to report and return Medicare/Medicaid overpayments within 60 days of identifying them is basis for FCA liability, civil money penatlies and exclusion. > What is an overpayment? Impact of Fiscal Cliff legislation? Many cases distinguish conditions of participation versus conditions of payment. Express or implied certifications. Is sub-optimal medical records documentation necessarily equate to an overpayment? > What does identification mean? > CMS proposed regulation Ten-year lookback 60 days tolled during period of diligent investigation 37

38 First Enforcement of 60-Day Rule > U.S. ex rel. Kane v. Healthfirst, Inc., No (S.D.N.Y.) USA and NY intervene. > Test case? > Medicaid managed care company sent erroneous electronic remittances that triggered hospitals to erroneously submit claims to secondary payors, including Medicaid. Hospitals blameless. > NY Comptroller discovered and advised hospitals of certain improperly submitted claims. > Persisted from early 2009 until late

39 First Enforcement of 60-Day Rule > Defendants allegedly did not nothing further with Kane s analysis or the claims identified therein. > From 3/11 to 2/12, the NY Comptroller brought additional affected claims to defendants attention, and defendants reimbursed NY Medicaid in 30 batches. > Kane s list of 900 claims was allegedly a substantially accurate list. > Defendants only repaid the final 300 claims after DOJ served a civil investigative demand in June

40 First Enforcement of 60-Day Rule > Government did not intervene against the MCO or against dozens of other hospitals, and relator has voluntarily dismissed claims against them. > Defendants have informed the Court that they intend to move to dismiss on grounds of no identification because Kane s work was incomplete. 40

41 OIG SDP versus CMS SRDP > What is resolved? OIG civil money penalties & exclusion authority CMS Stark Law liability for overpayments > What laws may have been violated? Stark Law only Anti-Kickback Statute only Stark & AKS Stark and ambiguous AKS 41

42 OIG SDP versus CMS SRDP > How far back to calculate damages? See CMS FAQ on Stark Law Disclosure (4 years, citing 42 C.F.R (b)) OIG relies on six-year statute of limitations > How far back to disclose facts > How are damages likely to be measured? > Difference in process > Alternatives to SDP > Is there an alternative to the SRDP? 42

43 Defense or Bar to a Qui Tam Action > Will disclosure bar a qui tam case? > Public Disclosure Bar: The court shall dismiss [a qui tam action] unless opposed by the Government, if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed (i) in a Federal criminal, civil, or administrative hearing in which the Government or its agent is a party; (ii)in a congressional, Government Accountability Office, or other Federal report, hearing, audit, or investigation; or (iii) from the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information. 31 U.S.C. 3730(e)(4). > Rost v. Pfizer, Inc., 507 F.3d 720 (1st Cir. 2007). > U.S. ex rel. Whipple v. Chattanooga-Hamilton Cty. Hosp. Auth. (E.D. Tenn. 2013) 43

44 Defense or Bar to a Qui Tam Action > Will disclosure bar a qui tam case? > Pending CMP action: In no event may a person bring [a qui tam action] which is based upon allegations or transactions which are the subject of a civil suit or an administrative civil money penalty proceeding in which the Government is already a party. 31 U.S.C. 3730(e)(4). 44

45 Defense or Bar to a Qui Tam Action > Defense Disclosure creates inference that disclosing party did not act knowingly, i.e., with reckless disregard or deliberate ignorance of truth or falsity of the claim. Especially if part of an overall showing of an effective compliance program. But prevailing on this basis would occur at summary judgment stage or not until trial. 45