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 Leveraging Tools for Resolving Stark Law or Anti-Kickback Statute Violations THURSDAY, SEPTEMBER 15, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Samuel C. Cohen, Esq., Arent Fox, Washington, D.C. Anjali N.C. Downs, Esq., Epstein Becker and Green, Washington, D.C. Jacob J. Harper, Esq., Morgan Lewis & Bockius, 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 OIG and CMS Voluntary Self-Disclosures Weighing the Risks and Rewards of Self Reporting September 15, 2016

6 Presented by Jacob J. Harper Associate, Morgan Lewis (202) Anjali N.C. Downs Partner, Epstein Becker Green (202) Samuel C. Cohen Associate, Arent Fox (202)

7 CMS Self-Referral Disclosure Protocol ( SRDP ) Timeline Affordable Care Act significantly expanded CMS authority and required the Secretary to create a Medicare self-referral disclosure protocol (ACA 6409) SRDP posted on CMS website on September 23, 2010; revised May 6, 2011 On May 17, 2012, CMS published four SRDP FAQs addressing: Look Back Period Calculating Amount Due & Owning Calculating Total Remuneration Section 6402(a) of the ACA (60 day rule) 7

8 SRDP Timeline On March 4, 2015, CMS issued special instructions for SRDP submissions solely involving noncompliance with 42 CFR (b)(3)(ii)(C) (requiring physician-owned hospitals and rural providers to disclose on any public website and in any public advertisement that the hospital is owned or invested in by physicians) 2016 Physician Fee Schedule and clarification of the in writing requirement : a collection of documents, including contemporaneous documents evidencing the course of conduct between the parties, may satisfy the writing requirement of the exceptions that require that an arrangement be set out in writing. 8

9 SRDP Timeline On February 12, 2016, CMS publishes the final 60 Day Rule that, among other things, extends the look back period from 4 years to 6 years beginning March 14, On May 6, 2016, CMS publishes a revised SRDP form to streamline and simplify the SRDP process and reduce the burden on disclosing parties (as well as CMS). Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing- Items/CMS html Revised SRDP form currently under review at OMB 9

10 SRDP Basics Open to all persons who received an overpayment as a result of a violation of the Stark Law Current government audit or investigation is not a bar to disclosure under SRDP Disclosures must be in good faith Applicable only to physician self-referral violations Does not supersede OIG Self-Disclosure Protocol (SDP) Violations falling under both SRDP and SDP should be disclosed only to OIG Comply with CIA/CCA disclosure obligations. 10

11 SRDP Basics Disclosing party should make submission to the SRDP with the intention of resolving overpayment liability as a result of noncompliant conduct Separate from the CMS Advisory Opinion Process New requirement included in revised SRDP protocol; disclosing party must certify to noncompliance Coordination with OIG and DOJ CMS reserves right to refer matters to OIG or to DOJ CMS may use a disclosing party s submission to prepare a recommendation to OIG or DOJ. CMS admonition: decision to disclose a matter involving noncompliance with the Stark Law should be made carefully. 11

12 SRDP Basics Stay of ACA 6402 overpayment return requirement until settlement, withdrawal, or removal Do not make interim payments to CMS Submission to DOJ does not satisfy a provider s obligations under the 60 Day Rule 12

13 Highlights of Revised SRDP Protocol Review the proposed SRDP form not required now, but it will be once approved by OMB Three components: SRDP Disclosure Form Solicits information about the disclosing party Physician Information Form solicits information about each physician involved in the non-compliant arrangement Financial Analysis Worksheet must be in Excel format and contain date overpayment was identified and overpayments going back 6 years 13

14 Highlights of Revised SRDP Protocol Pervasiveness of Noncompliance how frequent is the noncompliance in comparison with similar financial arrangements May report based on type of noncompliance (e.g., lease arrangements) or in the aggregate, but must explain how determined. For example: Hospital has numerous compensation arrangements and only 3% disclosed herein were noncompliant Six of the hospital s 30 call coverage arrangements (20%) were noncompliant The group failed to provide the required notice 150 times over the last six months, which amounts to 10% 14

15 Highlights of Revised SRDP Protocol Physician Information Form must complete separate form for each physician involved in a noncompliant arrangement and multiple forms if there are multiple noncompliant arrangements Narrative explanation of the arrangement nature of the noncompliant arrangement (compensation arrangement or ownership) and nature of the noncompliance Must certify either: (a) the financial relationship was noncompliant (or that services failed to satisfy an applicable exception at ); or (b) because entity cannot certify compliance with the Stark Law, it is certifying noncompliance with the Law 15

16 Highlights of Revised SRDP Protocol Financial Analysis Worksheet must be in Excel Physician name NPI Date overpayment was identified Calculated overpayments covering the entire calendar year going back 6 years, even if the disclosing party did not receive an overpayment during a particular calendar year Total overpayment column Use a text box to describe the methodology used to calculate the overpayment and whether estimates were used 16

17 SRDP Process Preparation of Materials by Disclosing Party SRDP Form (not yet required) Cover Letter Financial Analysis Worksheet Certification Statement Disclosure Submission ( , original, & one copy) Must submit electronically for automatic stay Obligation to update (e.g., change of ownership, change of designated representative); must also submit electronically but include update in subject line Certification statement must be sent through hard copy with original signature of the certifying official 17

18 SRDP Process Acceptance/Request for Additional Information Verification of the disclosure information Access to supporting documentation without assertion of privileges Will not request information subject to attorney/client privilege, but may discuss ability to gain access to information without waiving privilege 18

19 Resolutions Under the SRDP CMS is not bound by disclosing party s conclusions CMS is not obligated to resolve a disclosure in any particular manner No appeal rights for disclosed claims resolved through the SRDP If removed/withdraw, disclosing party may appeal any subsequent overpayment demand Resolutions are only of CMS authorities No CMP or FCA release via the SRDP 19

20 Resolutions Under the SRDP Reductions are based on facts and circumstances of disclosed actual or potential violation(s), including: The nature and extent of the improper or illegal practice The timeliness of the self-disclosure The cooperation in providing additional information related to the disclosure Failure to update CMS regarding changes affecting the disclosing party The litigation risk associated with the matter disclosed The financial position of the disclosing party Should you make a settlement offer? 20

21 Resolutions Under the SRDP Do not make repayments relating to the disclosed matter to Medicare contractors until the matter is resolved without CMS s consent We remind disclosing parties that section 1877(g)(2) requires that any amounts collected from individuals that were billed in violation of [the Stark Law]must be refunded to the individuals on a timely basis. 21

22 Tips on Disclosure Submissions Not required to use the proposed SRDP forms, but nothing prevents you from drafting the disclosure based on the forms Present the overpayment calculation based on Financial Analysis Worksheet Can still provide information for CMS to consider when evaluating the disclosure (e.g., details/context the help CMS evaluate pervasiveness of noncompliance) But get to the point a shorter disclosure could potentially expedite process 22

23 Tips on Disclosure Submissions Let CMS know upfront about any timing issues (e.g., CHOWs, Mergers, & Acquisitions) Assignment of the provider agreement the liability moves with the provider agreement Provide legal analysis for each noncompliant arrangement and provide the information requested on the proposed Physician Information Form for compensation arrangements set in advance, signed writing, volume or value of referrals/other business generated, FMV, commercial reasonableness, compliance with federal and state laws, etc. 23

24 Tips on Disclosure Submissions Who will sign the certification ( to the best of my knowledge, the information provided contains truthful information ) keep him/her informed Manage expectations the process takes a long time May need to deal with financial auditors regarding establishing reserve amounts Can resolve overpayment liability by refunding overpayments to the contractor; don t need to utilize the SRDP when amounts at issue are small 24

25 Number of Settlement under the SRDP by Year Calendar Year Number of Disclosures Settled Range of Amounts of Settlements $60 - $579,000 $709,060 Aggregate Amount of Settlements $1,600 - $584,700 $1,236, $760 - $317,620 $2,468, $3,322 - $463,473 $5,175, $5,081 - $815,405 $6,706,458 Totals 131 $60 - $815,405 $16,295,234 As of December 31, 2015, an additional 56 disclosures to the SRDP were withdrawn or settled by CMS law enforcement partners. Because disclosures of actual or potential violations of the physician self-referral law include proprietary, confidential, or otherwise nondisclosable information, CMS presents settlement information on an aggregate basis. 25

26 Changes in How CMS Reports Settlements CMS no longer provides short summaries of the conduct being settled, location of the provider and amount of the settlement Even more difficult for providers to understand the basis for any particular settlement or the methodology used by CMS to arrive at settlement amounts Largest settlement yet was announced in 2015 at $815,405 26

27 OIG Self-Disclosure Protocol ( SDP ) First published in 1998 to establish a process for health care providers to voluntarily identify, disclose and resolve instances of potential fraud involving the Federal health care programs Subsequent open letters provided additional guidance In April 2013, the OIG updated the SDP As of April 2013, the OIG has had recoveries of more than $280 million For reporting period October 1, 2015 March 31, 2016 the OIG recovered over $48.1 million 27

28 Why Self-Disclose? Reduced damages and/or penalties Less likelihood government will pursue criminal action or adverse administrative actions Decreased risk of whistleblower action Coordination among agencies to resolve self-disclosed matters Demonstrates commitment to compliance 28

29 Disclosure Importance and Benefits [G]ood faith disclosure of potential fraud and cooperation with the OIG s review and resolution process are typically indications of a robust and effective compliance program. Tolling of the Statute of Limitations Presumption against requiring CIAs Lower multiplier generally a minimum of 1.5 Timing expedited resolution (less than 12 months from acceptance of SDP) Electronic submission 29

30 Challenges Tightened timeframe Internal investigations and damages calculations must be submitted within 90 days from initial submission (previously 90 days from acceptance into protocol) Resources Time Staff Expensive 30

31 Who Can Participate in the SDP? All health care providers, supplier, or other individuals/entities subject to OIG s CMP authorities (42 C.F.R. Part 1003), including: Presenting or causing to be presented claims to a Federal health care program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent Violating the anti-kickback statute (42 U.S.C. 1320a-7b(b)) by knowingly and willfully: (1) offering or paying remuneration to induce the referral of Federal health care program business; or (2) soliciting or receiving remuneration in return for the referral of Federal health care program business Presenting or causing to be presented a claim that the person knows or should know is for a service for which payment may not be made under the Stark Law Not limited to specific industries, specialties, types of services Those already under government inquiry or subject to a CIA are not precluded from submitting under the SDP 31

32 What Type of Conduct Can Be Disclosed? Conduct that potentially violates Federal criminal, civil or administrative laws for which CMPs are authorized Disclosing party must acknowledge that the conduct is a potential violation and must identify the specific laws that are implicated Disclosing parties should not refer broadly to, for example, Federal laws, rules, and regulations or the Social Security Act. Statements such as the Government may think there is a violation, but we disagree raise questions about whether the matter is appropriate for the SDP. If conduct is Stark only, then must go to CMS Cannot request an opinion from OIG regarding whether a violation has occurred SDP is not available for a matter that does not involve potential violations of Federal criminal, civil, or administrative law for which CMPs are authorized 32

33 What Goes Into a Disclosure Requirements for All Disclosures Internal investigation and written submission General information related to provider Background and details related to conduct being disclosed Types of claims, period of noncompliance, relevant personnel and their roles What laws were violated Damages estimate, or quantification Corrective action Knowledge of government inquiry Certification 33

34 Requirements for Conduct Involving False Billing Must conduct a review to estimate the improper amount paid ( damages ), consisting of a review of either: All the claims affected by the disclosed matter, or A statistically valid random sample of the claims (at least 100 items) that can be projected to the population of claims affected by the matter Damages estimates may not include reductions OIG will verify the calculation of damages The report of findings must include, at a minimum: Review objective Population Sources of data Personnel qualifications Characteristics measured 34

35 Requirements for Conduct Involving Excluded Persons In addition to the general information, the disclosure must include: The identity of the excluded individual and any provider identification number The job duties performed by that individual The dates of the individual s employment or contractual relationship A description of any background checks that the disclosing party completed A description of the disclosing party s screening process and any flaw or breakdown in the process A description of how the conduct was discovered A description of any corrective action Calculating damages: Items or services separately billed must include total amounts claimed and paid Items or services not billed separately estimate using total costs of employment/contracting during the exclusion multiplied by the disclosing party s revenue-based Federal health care program payor mix 35

36 Requirements for Conduct Involving the AKS and Stark Law Narrative must include a concise statement of all details directly relevant to the disclosed conduct and a specific analysis of why each disclosed arrangement potentially violates the AKS and Stark Laws, including: Participant s identities; Their relationship to one another to the extent the relationship effects potential liability; The payment arrangements; and The dates during which each suspect arrangement occurred Types of information OIG finds helpful: How FMV was determined and why now in question Why required payments from referral sources, under leases or other contracts, were not timely made or collected or did not conform to the negotiated agreement and how long such lapses existed Why the arrangement was arguably not commercially reasonable 36

37 Calculating Damages for Conduct Involving the AKS and Stark Law Must submit an estimate of the amount paid by Federal health care programs for the items or services associated with potential violations May use the methodology described for conduct involving false billing to calculate an estimate or identify another reliable methodology to calculate the claims-based estimate The methodology must be described in the report Must include the total amount of remuneration involved in each arrangement OIG generally exercises its broad discretion by compromising [their] CMP authorities for an amount based upon a multiplier of the remuneration conferred by the referral recipient to the individual or entity making the referral. 37

38 Resolution Cooperation is essential OIG coordination with DOJ Civil matters Criminal matters OIG Coordination with SRDP Minimum settlement amounts For kick-back related submissions accepted into the SDP, OIG will require a minimum $50,000 settlement amount to resolve the matter. Financial inability to pay Overpayment reconciliation FOIA Implications of disclosure 38

39 Examples of Recent Settlements The Kroger Company Issue: Employing excluded individuals and filling prescriptions written by excluded prescribers Settlement Amount: $21,523, Pacifica Hospital of the Valley Issue: Violating provisions applicable to AKS and Stark Settlement Amount: $764, Planned Parenthood Health System, Inc. Issue: Submitting claims with various billing errors Settlement Amount: $1,572,

40 Best Practices for Self-Disclosure Timing Determining whether self-disclosure is appropriate Potential benefits and risks of making a self-disclosure Preserving privileged communications To whom should the self-disclosure be made? 40

41 Timing 60 Day Rule 2009: FERA imposed False Claims Act liability for failing to meet an obligation to return money to the government 31 U.S.C. 3729(a)(1)(G): Any person who knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government (emphasis added) Obligation defined as an established duty, whether or not fixed, arising from an express or implied contractual, grantor-grantee, or licensorlicensee relationship, from a fee-based or similar relationship, from statute or regulation, or from the retention of any overpayment (emphasis added) 41

42 Timing 60 Day Rule ACA 6402(a) Person who has received an overpayment must: o Report and return the overpayment to the appropriate person (e.g., CMS, State, contractor, etc.); and onotify the person to whom the overpayment was returned of the reason for the overpayment in writing Deadline for reporting and returning is the later of: othe date which is 60 days after the date on which the overpayment was identified; or othe date any corresponding cost report is due, if applicable 42

43 Timing 60 Day Rule Results of combining FERA and ACA 6402(a) Failure to report and return an identified overpayment within 60 days creates an obligation under the FCA Thus, FCA liability created for knowingly retaining (i.e., not reporting and returning) any overpayment within 60 days of the date on which the overpayment was identified 43

44 Timing 60 Day Rule 60 Day Rule Final Regulations (Medicare Parts A &B) identified 81 Fed. Reg. 7,654 (Feb. 12, 2016) Overpayment is identified when the person has, or should have through the exercise of reasonable diligence: Determined that the provider or supplier has received an overpayment, and Quantified the amount of the overpayment Reasonable Diligence Proactive compliance activities Timely, good faith investigation of credible information of a potential overpayment May require reviewing six years of claims (per six-year lookback period) even if initially find only a single overpaid claim 44

45 Timing 60 Day Rule Timely investigation Investigation typically must be completed within six months Time period may be extended under extraordinary circumstances oe.g., unusually complex investigations, such as certain Stark Law violations 60 day repayment deadline begins: When the reasonable diligence is completed On the day the provider received credible information of a potential overpayment if the provider fails to conduct reasonable diligence In most cases, maximum of 8 months to return overpayments 6 months to investigate, 2 months (60 days) to return 45

46 Timing 60 Day Rule 60 Day Rule Final Regulations relaxed rule created by earlier court decision U.S. ex rel. Kane v. Health First Inc., 2015 WL (S.D.N.Y. Aug. 3, 2015) o Overpayment is identified when a provider is put on notice of a potential overpayment, rather than the moment when an overpayment is conclusively ascertained o Congress intended FCA liability to attach where there is an established duty to pay money to the government, even if the precise amount due has yet to be determined Final rule timing for providers who do not conduct reasonable diligence can be viewed as incorporating the Kane rule 46

47 Timing 60 Day Rule Operational issues: Are you able to properly investigate (and quantify, if necessary) credible reports of potential overpayments within 6 months? Are you able to decide the following issues within 60 days of having identified an overpayment: o Whether to report the overpayment to a Medicare contractor or to make a self-disclosure? o To whom the self-disclosure should be made? Are you able to make the required self-disclosure within 60 days of having identified an overpayment? 47

48 Is Self-Disclosure Appropriate? Is the matter a potential violation of the law? Is there an alternative to disclosure? Matters exclusively involving overpayments or errors that do not suggest that violations of law have occurred should be brought to the attention of the Medicare Administrative Contractor Operating under a Corporate Integrity Agreement? 48

49 Is Self-Disclosure Appropriate? Considerations Scope Isolated or systemic Circumstances surrounding intent Explanations and defenses Dollars involved Effectiveness of compliance program review Trust for, and relationship with, local and national enforcement people vs. Medicare contractors Benefits/risks of disclosing vs. not disclosing 49

50 Potential Benefits & Risks of Self-Disclosure Potential Benefits Reduced repayment amount compared to repayment amount if government identifies the overpayment Government unlikely to impose a CIA Releases received from government as part of settlement agreement will protect against certain types of liability Government is less likely to conduct its own, more intrusive investigation Decreased exposure for individuals 50

51 Potential Benefits & Risks of Self-Disclosure Potential Risks Tension between government s and provider s perspective of appropriate level of cooperation Government looks for candor, flexibility, demonstrated attitude of compliance Government follow-up investigation uncovering non-disclosed compliance Repayment may not be enough settlement with multiplier Referral to DOJ Government enforcement trends Criminal liability Individual liability Self-disclosure to one agency may not resolve liability to another agency Self-disclosure potentially not a public disclosure under FCA 51

52 Potential Benefits & Risks of Self-Disclosure Potential risks of self-disclosure Self-disclosures may take a significant amount of time to resolve OIG v. CMS Is company okay with uncertainty/extended process? Complexity of fraud and abuse laws resulting in unnecessary disclosures What is company s risk tolerance? FOIA implications 52

53 Preserving Privileged Communications Consideration of Waiver of Attorney-Client Privilege and Work Product Protection Legal files re: investigation Materials previously designated as privileged/protected Witness interviews Consultants' and auditors' work papers Internal audit materials 53

54 Who Should Receive the Self-Disclosure: OIG SDP vs. CMS SRDP Who can use each Protocol? ISSUE OIG SDP CMS SRDP What Conduct is Eligible? Options for Disclosing Estimating Liability Any health care provider Any matter that potentially violates federal criminal, civil or administrative laws DOJ may choose to participate in settlement or provider may request FCA release Some guidance in OIG s Open Letters and elsewhere regarding OIG s general methodology on arriving at a settlement amount based on the conduct at issue DHS entity with overpayment liability Only actual or potential Stark Law Violations (no colorable AKS issue) CMS only and only if seeking a release of (g)(1) overpayment liability Very little understanding of CMS approach to arriving at a settlement amount 54

55 Who Should Receive the Self-Disclosure: OIG SDP vs. CMS SRDP Timing of Disclosure Anticipated Releases ISSUE OIG SDP CMS SRDP 60 day rule Can disclose and conclude investigation and damages calculation within 90 days of initial submission Civil Monetary Penalties Program Exclusion False Claims Act (DOJ) Program Fraud Civil Remedies (DOJ) 60-day rule Consider a rolling disclosure Overpayment Liability What about disclosing to the Department of Justice (Main Justice, local AUSAs)? 55

56 Thank You