11/10/2014. Nuts and Bolts of Proceedings related to Fraud, Recent Cases Update, and HIPAA Nuances. Objectives

Transcription

1 Nuts and Bolts of Proceedings related to Fraud, Recent Cases Update, and HIPAA Nuances Presented to: Health Care Compliance Association November 14, 2014 Objectives Background and General Trends on fraud cases generally (Medicaid/ Medicare) Understanding the investigative, review, and adversarial process Update on Recent Case Trends HIPAA versus State Law Case Examples Statistics are up Significant increase in amount of cases over the past two years In FY 2012 federal prosecutors had 2,032 health care fraud criminal investigations pending, up from 1,873 in FY 2011 and 1,787 in FY Ex.: Healthcare fraud investigations by IRS FY 2013 FY 2012 FY 2011 Investigations Initiated Prosecution Recommendations Indictments/Informations Sentenced

2 Why are cases going up? Enhanced statutory and regulatory framework CMS Guidelines Every $1 invested in combating Medicare/Medicaid fraud saves $1.55 Federal Budget increases 2012 Arizona Auditor General s Report regarding Medicaid fraud Processes to prevent fraud and abuse in place; training not updated regularly 72% of fraud cases not opened for over a year Other Trends in Enforcement Increased Investigations Pooling of resources cross-agency coordination - Licensing Board Investigations - International Implications? Data mining - Electronic medical records - Sharing of electronic medical records Coordination (and requirements) with private insurance companies Duty to disclose Self-Disclosures Qui Tam Lawsuits FERA Delegation of Civil Investigative Demands ACA Unannounced Visits to Providers Required Trend Example: Stark Self-Referral Act CMS (with OIG) developed self-referral disclosure protocol (SRDP) (Section 6409) For actual or potential Stark Violations Authorizes HHS discretion to compromise (reduce) Payments and penalties for violations Factors considered - Nature and extent of improper practice - Cooperation - Timelines - Other factors State Law mirroring Stark Law (ARS ) 6 2

3 Trends in Enforcement, Cont. Increased Enforcement Actions Increase in audits (not just laws, but provider agreements) Criminal cases Exclusions (death sentence) - Mandatory versus Permissive Civil cases (majority of qui tam cases are not taken, but still need to be reviewed) Harsher penalties - HHS OIG - $10,000 to $50,000 per violation Continued Attack on Privileged Communication in Governmental Investigations (watch using consultants) Trend Example: Coat-tail Litigation to Medicare Fraud August 2014, Aetna brings suit against laboratory and other facilities/ practitioners for fraud Raised the exact allegations raised in the Government s FCA suit, but related to private insurance Seeking: $15 million Take away: Government did all the work Good Defense by Going on the Offense? Future Trends (Arizona) Much larger population in the system = significant increase in cases; increase ID fraud. Integrated care (Arizona) = possible loopholes in the state system Change in RBHA Contractor(s) Licensed providers (billing eligible) shifting to non-licensed helpers (non-billable) or excluded individuals Accountable Care Organizations (waivers and loopholes; failure to have compliance program) 3

4 Understanding the Process The Man Understanding the Process Initiation of Investigation: Mandated Reporter Voluntary Disclosure Whistleblower Third Party Report (Competitor) Government Audit Record-keeping Data Mining Sting Operations OR you were overpaid and need to pay back Understanding the Process, Cont. Depending on point agency, several options: Interview (joint) whistleblower, reporter, or third-party Government request for records In-person audit of records/policies Coordination with the Licensing Boards as necessary Sting operation Whistleblower hires an attorney 4

5 Understanding the Process, Cont. If criminal activity suspected possible referral to other law enforcement or Attorney General s Office/DOJ for further guidance and investigation If civil, case will be continued to be reviewed for appropriate administrative action Multiple layers, eventual right to go to ALJ after exhaustion Government has right of first refusal Whistleblowers & Qui Tam Actions Whistleblowers in the CMS system is usually tied to a False Claim Act case But, Stark Law and Anti-Kickback violations fall under False Claims Act jurisdiction Civil War law 150 years old and updated in 2010 Greatly expanded Whistleblower rights under the ACA Wrong-doers can take advantage of Whistleblower rights $5 billion recovered; $3.3 billion via Whistleblowers in qui tam suits - Largest Industry: Healthcare - $3 billion (next was DoD with $427 million) 14 Qui Tam Basics Filed by a private person called a relator Filed under seal (no notice to the defendant) Copies sent to DOJ/AG with evidence to support claims Must have independent knowledge that materially adds to publicly disclosed allegations or transactions - Recent change: Legislative hearing is not public disclosure - Criminal Division is also going to review Government has 60 days to investigate, then: Intervene Dismiss or Decline to Intervene Decline to Intervene 15 5

6 Whistleblower Protections FCA protects a whistleblower who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of whistleblower activities authorized under the FCA Whistleblower only needs to have reasonably believed the violation had occurred to qualify (actual violation not necessary) National Whistleblower Center: % of whistleblowers tried to report internally first 16 Pre-Litigation Strategy Don t Wait For Litigation!! Investigate AND Preserve the Privileges! Cooperate (within the law) Understand the fraud Mandatory versus Voluntary Disclosure Track what is stated to various agencies If a target knows about case (likely does), then one can enter into pre-indictment negotiations with the government. Settlement Agreement (Civil) Deferred Prosecution Agreement Non-Prosecution Agreement Understanding Criminal Law Charging (police) Criminal Complaint/Criminal Information (prosecutor) Civil Complaint (Attorney General, Department of Justice, Qui Tam Relator) Conviction (Judge/Jury) 6

7 HIPAA versus State Law Both State Law and HIPAA = Control Protected Health Information HIPAA = Multiple exceptions & Multipliers (i.e., mental health, substance abuse) State Law = More strict than HIPAA and references are in multiple statutes/regulations Government Agencies = Using Out-Dated Forms Best Practice = Take Government form; but require that they fill out yours too Policy Review = Cross-Reference and Update! This is bad.but, it happens Case Example: Carondelet Health Network (AZ) (Aug. 2014) Whistleblower action from 2011 Allegation range 2004 through 2011 Billed Medicare, the Federal Employees Health Benefit Program, and AHCCCS for in-patient rehab services that were not properly reimbursable. Settlement: $33 Million 7

8 Case Example: U.S. v. St. Junius (5 th Cir. Nov. 2013) Facts: Equipment not medically necessary FCA Deliberate Ignorance overwhelming deficiencies could not go unnoticed. High probability of guilt (but, what about reasonable doubt?) Anti-Kickback Knowledge of the law irrelevant; act is what matters Case Example: America Therapeutic Corp. (Jan. 2013) Facts: Patient Recruiter who funneled mental health patients to various preferred services and received kickbacks $190 million fraud scheme Take Away: Can patient recruiters work under a different name? Arizona s Integrated System and ACA efforts for a team approach within a network Case Example: U.S. v. Omnicare (June 2014) Facts: Omnicare provided reduced prices in exchange for referrals, calling them prompt payment discounts Settlement: $214 million Whistleblower case: Relator s Portion: $17.24 million Take Away: Who also has an issue here? 8

9 Case Example: Optim Healthcare (GA) (Aug. 2014) Financially motivated Surgeries (i.e., lack of medical necessity) Numerous complaints but, initiated by Whistleblower (Competitor CEO!) Requirement to drive long distances to rural area center owned by Optim (Stark Law violations) Settlement: $4 million Case Example: U.S. v. Fractal Systems (Oct. 2014)(FL) Health care companies/hospitals that also perform R&D under federal funding; Scientists Fraudulently qualified for various grants (Fraud Only) Contract provisions about reporting Take Away: It is not just health services that are at issue it is ALL activities of the entity/agents Case Example: Community Health (TN) (Aug. 2014) Seven Whistleblower Lawsuits! Overbilling for inpatient services that should have been observation outpatient (not medically necessary) Involved 119 hospitals in the system (29 states) between 2005 and 2010 Physician incentives Settlement: $98 million 9

10 Case Example: Pharmacies (Jul. 31, 2014) (MO & RI) Whistleblower complaints and Part D Plan Audits Trying to comply with State and Federal Requirements (sales tax, etc. MO Health Care IT) Improper paperwork, failing to provide generics (or related savings), supplying fewer pills, billing wrong entity (or double-billing - CVS), misstating expiration dates, etc. Kickbacks (i.e. gift cards to customers or referral sources) Case Study: Pharma and Free Speech PhRMA Defense (CA) Integrilin Off Label FCA Claims Argument: Doctor s judgment to prescribe a medication is free speech, regardless of FDA interpretation Studies support Doctor s interpretation of the drug s use (so, not false ) Case Study: Urine Tests (Fl) Submitted claims for high complexity urine tests exceeding the number of units allowed and bypassed code that would have rejected the claims. Settlement: $197, Settlement: $334,

11 Case Study: Medicus Labs (TX) Feb Inappropriate coding Testing not medically necessary Settlement: $5 Million Case Example: U.S. v. Bayer Healthcare (Oct. 2013) Qui Tam Lawsuit. Since Bayer had made false representations about the drugs safety, Bayer had fraudulently induced DoD into included the drug in the federally financed health care program The individual claims for reimbursement were not false; rather all claims were false No longer an economic hard issue Case Example: Oklahoma (Dec. 2013) Mental health therapist volunteered at a school where children primarily qualified for Medicaid Obtained children s information Filed false claims for services never rendered Similar case in Virginia (Oct. 2013). Take Away: Multiple layers before false claim is made; children are key group. 11

12 Case Example: Michigan (Sep. 2013) Mental health provider did not follow CMS Guidelines regarding charting Left employment Other providers at clinic forged signature or entered electronic signature of former provider The failure to maintain records would have mandated a refund Take Away: Data mining Case Example: Michigan (Aug. 2014) $22 Million Medicare Fraud. Period: Home health care, but services never rendered and were not medically necessary Take Away: Data mining is key Case Example: Texas (Nov. 2013) Texas OIG loses several administrative cases related to the withholding of payments to dentists accused of fraud Only need to show reliable evidence to withhold Failure of employers and employees to cooperate Reliance on expert opinion alone (i.e. not meeting medical necessity) was not enough TX Response: Outside counsel, multiple expert review Coordination with the Licensing Boards? 12

13 Case Example: Nevada (Nov. 2013) Providers conspired with a patient s family members to use the patient s information to provide family members with services and medicine Failure to maintain adequate billing system No check on whether services were actually provided No documentation reflecting actual services (just billing codes) Case Example: New York (Nov. 2013) Hospital CEO accepted $420,000 for ensuring vendors landed business Under ACA, violation of Anti-Kickback is also a violation of FCA False statements Take away: Data mining; subcontractor invoice review; ACO impact Case Example: New York (Nov. 2013) Non-licensed medical assistant (licensed in Puerto Rico) providing services as another doctor Doctor billed Medicaid $19 million scheme Take Away: Other violations, including Board unprofessional conduct, unnecessary billing, and Social Security Violations 13

14 QUESTIONS? Brett W. Johnson (602)