1 of 8 and Abuse and the Ability of Employees to Report Wrongdoing 1. Purpose The purpose of this policy is to provide information for combating fraud, waste and abuse and the ability of employees to report wrongdoing. 2. Scope This policy applies to all employees, management, contractors and agents of Kaiser Foundation Health Plan, Inc. (KFHP-Hawaii), the of Kaiser Foundation Hospitals (KFH), and Hawaii Permanente Medical Group, Inc. (HPMG) (collectively, Kaiser-Hawaii). 3. Definitions Abuse Incidents or practices of providers, physicians or suppliers of services that are inconsistent with accepted sound medical practices, directly or indirectly resulting in unnecessary costs to the program, improper payment or program payment for services that fail to meet professionally recognized standards of care or are medically unnecessary. Claims a formal request for reimbursement for services rendered (e.g., CMS-1500 for professional FFS Medicare and Medicaid claims and CMS-1450 or UB-92 for hospital FFS Medicare and Medicaid claims). Fraud Fraud is an intentional deception or misinterpretation that an individual knows to be false or does not believe to be true and makes, knowing that the deception could result in some unauthorized benefit to himself/herself or other person or entity. Knowledge can be: Actual knowledge, Deliberate ignorance of the truth, or Reckless disregard for the truth. 4. Policy It is the policy of Kaiser Hawaii to obey the law and to work to stop and eliminate fraud, waste and abuse with respect to payments to KFHP from federal or state programs providing payment for patient care.
2 of 8 This policy includes the following information concerning tools this organization, federal and state agencies and individuals use to fight fraud, waste and abuse in the administration of federal and state health programs at Kaiser-Hawaii. A detailed description of these points follows. A summary of the Federal False Claims Act A summary of administrative remedies found in the Program Fraud Civil Remedies Act A summary of laws of the state of Hawaii that impose civil or criminal penalties for false claims or statements A summary of protections for employees (whistleblowers) who report suspected violations of these federal and state laws. The role of such laws in preventing and detecting fraud, waste, and abuse in federal and state health care programs KFH existing policies and procedures for detecting and preventing fraud All information contained in this policy regarding federal and state statues is current as of December 2006. This policy will be reviewed annually and revised as necessary. This policy and the information contained in it shall be distributed to all current and new employees and to all current and future contractors of (KFHP-Hawaii), the of Kaiser Foundation Hospitals (KFH), and Hawaii Permanente Medical Group, Inc. (HPMG) (collectively, Kaiser-Hawaii). 4.1 The Federal False Claims Act The Federal False Claims Act (FCA) was first enacted during the Civil War to fight fraud in supplying goods to the Union Army. The law has undergone a number of changes since then and now applies to any federally funded contract or program, except tax fraud. The FCA was expanded to include Medicare and Medicaid programs in 1986. 4.1a Summary of Provisions: The FCA prohibits knowingly making a false claim against the government. False claims can take the form of overcharging for a product or service, delivering less than the promised amount or type of service, delivering less than the promised amount or type of goods or services, underpaying money owed to the government and charging for one thing while providing another. 4.1b Penalties: The FCA imposes civil penalties and is not a criminal statute. Therefore, no proof of specific intent as required for violation of a criminal statute is necessary. Persons (including organizations such as hospitals) may be fined a civil penalty of not less than $5,500 nor more than $11,000, plus three (3) times the amount
3 of 8 of damages sustained by the government for each false claim. The amount of damages in health care terms is the amount paid for each false claim that is filed. 4.1c Qui Tam (Whistleblower) Provisions of the FCA Any person may bring an action under this law (called a qui tam relator or whistleblower suit) in federal court. The case is initiated by causing a copy of the complaint and all available relevant evidence to be served on the federal government. The case will remain sealed for at least 60 days and will not be served on the defendant so the government can investigate the complaint. The government may obtain additional time to conduct its investigation, for good cause. The government on its own initiative may also initiate a case under the FCA. After the 60 day period, or any extensions, has expired, the government may pursue the matter in its own name, or decline to proceed. If the government declines to proceed, the person bringing the action has the right to conduct the action on their own in federal court. If the government proceeds with the case, the qui tam relator bringing the action may receive between 15 and 25 percent of any proceeds, depending upon the contributions of the individual to the success of the case. If the government declines to pursue the case, the qui tam realtor may be entitled to between 25 and 30 percent of the proceeds of the case, plus reasonable expenses and attorney s fees and costs awarded against the defendant. Any case must be brought within six years of the filing of the false claim. 4.1c.a. Antidiscrimination: Anyone initiating a qui tam case may not be discriminated or retaliated against in any manner by their employer. The employee is authorized under the FCA to initiate court proceedings to make themselves whole for any job related losses resulting from any such discrimination or retaliation. 4.2 Program Fraud Civil Remedies Act The Program Fraud Civil Remedies Act creates administrative remedies for making false claims separate from and in addition to, the judicial or court remedy for false claims provided by the Civil False Claims Act. The Act is quite similar to the Civil False Claims Act in many respects, but is somewhat broader and more detailed, with differing penalties. The Act deals with submission of improper claims or written statements to a federal agency. 4.2a Specifically, a person violates this act if they know or have reason to know they are submitting a claim that is:
4 of 8 False, fictitious or fraudulent; or, Includes or is supported by written statements that are false, fictitious or fraudulent; or, Includes or is supported by a written statement that omits a material fact; the statement is false, fictitious or fraudulent as a result of the omission; and the person submitting the statement has a duty to include the omitted facts; or For payment for property or services not provided as claimed. A violation of this prohibition carries a $6,000 civil penalty for each such wrongfully filed claim. In addition, an assessment of two times the amount of the claim may be made, unless the claim has not actually been paid. 4.2b A person also violates this act if they submit a written statement which they know or should know: Asserts a material fact which is false, fictitious or fraudulent; or, Omits a material fact and is false, fictitious or fraudulent as a result of the omission. In this situation, there must be a duty to include the fact and the statement submitted contains a certification of the accuracy or truthfulness of the statement. A violation of the prohibition for submitting an improper statement carries a civil penalty of up to $6,000. 4.3 Hawaii False Claims Act - FALSE CLAIMS TO THE Chapter 661, Hawaii Revised Statutes The Hawaii False Claims Act empowers individuals and organizations with knowledge of private fraud against the state to file lawsuits to recover damages and penalties for the state. Its express intent is to encourage whistleblower (qui tam) suits by giving consumers the tools and incentive to represent the state in actions against individuals and organizations that falsely bill for services not rendered or goods not delivered. 4.3a Summary of Provisions: The Hawaii False Claims Act prohibits any person who knowingly presents, or causes to be presented, to an officer or employee of the State a false or fraudulent claim for payment or approval; Knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the State; Conspires to defraud the State by getting a false or fraudulent claim allowed or paid; Has possession, custody, or control of property or money used, or to be used, by the State and, intending to defraud the State or willfully to conceal the property, delivers, or causes to be delivered, less property than the amount for which the person receives a certificate or receipt; Is authorized to make or deliver a document certifying receipt of property used, or
5 of 8 to be used by the State and, intending to defraud the State, makes or delivers the receipt without completely knowing that the information on the receipt is true; Knowingly buys, or receives as a pledge of an obligation or debt, public property from any officer or employee of the State who may not lawfully sell or pledge the property; Knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the State. A violation of the prohibition for submitting an improper statement carries a civil penalty of not less than $5,000 and not more than $10,000, plus three times the amount of damages that the State sustains due to the at of that person.. 4.4 Hawaii Whistleblower Protection Law Whistleblowers are generally employees who observe activities or behavior that may violate the law in some manner. These individuals report their observations either to management or to state agencies. Laws have been enacted to protect these individuals. Individuals have the right to not suffer from any adverse employment action because they participated in an investigation, hearing or inquiry conducted by a government agency or court of law. If the employer has violated this law, the individual may file a lawsuit in state court within 2 years after the occurrence of the alleged violation. Section 378-62, Hawaii Revised Statues. 4.5 The role of such laws in preventing and detecting fraud, waste, and abuse in federal and state health care program The laws described in this policy create a comprehensive scheme for controlling waste, fraud and abuse in federal and state health care programs by giving appropriate governmental agencies the authority to seek out, investigate and prosecute violations. Enforcement activities are pursued in three available forums: criminal, civil and administrative. This provides a broad spectrum of remedies to battle this problem. Moreover, whistleblower statutes and protections for individuals reporting fraud, waste and abuse in good faith encourage reporting of fraud, waste and abuse, creating broader opportunities to prosecute violators. Whistleblower statutes, such as the federal Civil False Claims Act and as found in Hawaii law, create reasonable incentives for this purpose. Employment protections create a level of security employees need to help in prosecuting these cases. 4.6 KFHP existing policies and procedures for detecting and preventing fraud The Principles of Responsibility is the organizational code of conduct that provides guidance to Kaiser-Hawaii personnel to assist in day-to-day work and to accomplish the mission in an ethical work environment. The Principles of Responsibility set forth Kaiser's values, expectations, and guidance for compliance, ethics, and integrity; and as such, the
6 of 8 principles form the foundation for the Compliance Program. Topics specifically addressed in the Principles of Responsibility are as follows: Non-Retaliation Respect for all Individuals Conflicts of Interest Ethics in Business Practices Protecting Kaiser Permanente Assets Accurate and Honest Recording and Reporting Confidentiality, Privacy and Information Security Process for Raising Issues and Reporting Violations Commitments to Quality, our Customers, our Employees, the Community, and Compliance, Ethics and Integrity The Principles of Responsibility details the fundamental principles of, and commitment to, ethical behavior expected of all Kaiser-Hawaii employees, physicians, students, residents, interns, and volunteers of Kaiser Permanente. Equally important, it reflects Kaiser-Hawaii s commitment to delivering high quality health care in a manner that is both responsible and responsive to the Kaiser-Hawaii membership as a whole, as well as to individual members. The al Compliance Office has overseen the development of, and will continue to monitor and oversee enforcement of Regional compliance policies and procedures aimed at achieving legal and regulatory compliance. Policies are accessible through the KP Hawaii Intranet Policy and Procedure Database. Some of the relevant policies include: Compliance Plan Organizational Ethics and Code of Conduct Principles of Responsibility and Compliance Training Responsible Reporting of and Responding to Compliance/Ethics Concerns Prevention, Detection and Correction of Fraud and Abuse Fraud, Waste and Abuse Control Plan A 24-hour confidential, national disclosure line is available to all personnel who wish to report compliance and ethics concerns. The Kaiser Permanente Compliance Connection provides a safe responsive, independent, and anonymous method to report possible wrongdoing, without fear of retaliation. The line enables the organization to identify and promptly address unethical, illegal, or questionable behavior in the workplace. The line is a toll free number that is available 24 hours a day, seven days a week. The National Compliance Office (NCO) has contracted with an independent company to take the caller s detailed report. NCO and Human Resources Compliance staffs work in conjunction with regional points of contact to investigate the allegations and report back to the line. The response is then reviewed nationally to monitor that issues are
7 of 8 investigated and addressed appropriately. Callers can call back to obtain the status of the complaint and the outcome once the investigation is concluded. 5. Responsibilities The Compliance Department shall be responsible for implementing and maintaining this policy. 6. Maintenance This policy shall be reviewed annually and revised as necessary. 7. References Deficit Reduction Act of 2005 False Claims to the State Chapter 661, Hawaii Revised Statutes False Claims to the County Chapter 661, Hawaii Revised Statutes False Claims Act 31 U.S.C 3729-3733 Program Fraud Civil Remedies Act - 31 U.S.C. 3801-3812 Civil Monetary Penalties Law 42 U.S.C. 1320a-7a Kaiser Permanente s Code of Conduct PRINCIPLES OF RESPONSIBILITY al Compliance Plan 2006 KP Hawaii Intranet - http://hon-ds1.hi.kp.org/kp/policies/policies.nsf/home KP Hawaii Policy and Procedure Database KP Hawaii Intranet - http://hon-ds1.hi.kp.org/kp/policies/policies.nsf/home 8. Implementation A. Effective Dates This policy becomes effective upon approval by the approving authorities.
8 of 8 B. Distribution Upon approval, this policy shall be distributed to all process stakeholders and the affected entities and departments. As applicable, affected entities, departments, and individuals may prepare and implement procedures consistent with this policy and as necessary conduct appropriate education to assure consistent and uniform implementation. This policy is accessible on the KP Hawaii Intranet. 9. Endorsement and Approval Contact Person: Susan VonEssen al Compliance Officer Date: 12/11/2006 Approved by: Compliance Committee Date: Next Review Date: 12/11/07 12/11/2006