Massachusetts Hospital Association 2011 Fraud and Abuse Update. What Does Health Care Reform Change for Hospitals and Their Physicians?

Transcription

1 Massachusetts Hospital Association 2011 Fraud and Abuse Update What Does Health Care Reform Change for Hospitals and Their Physicians? December 2, 2010 Colin J. Zick Ara B. Gershengorn Foley Hoag LLP (617) Foley Hoag LLP. All Rights Reserved

2 Criminal and Civil Health Care Fraud Enforcement Remains Active October 28, 2010, U.S. Attorney, Northern District of Iowa, Pharmacist Pays Triple Damages for Prescription Fraud October 26, 2010, Department of Justice, GlaxoSmithKline to Plead Guilty and Pay $750 Million to Resolve Criminal and Civil Liability Regarding Manufacturing Deficiencies in Puerto Rico Plant October 19, 2010, U.S. Attorney, Middle District of Pennsylvania, Pharmacy Owner Charged with $12 Million Health Care Fraud October 18, 2010, U.S. Attorney, District of Idaho, East Idaho Man Sentenced for Healthcare Fraud October 13, 2010, U.S. Attorney, Northern District of Texas, Local Ambulance Company Owner Sentenced to 15 Years in Federal Prison and Ordered to Pay $1.3 Million in Restitution for Running Health Care Fraud Scheme October 13, 2010, U.S. Attorney, Central District of California, Ten Indicted in Operation "Diagnosis Dollars" Where Defendants Allegedly Defrauded the U.S Medicare System in $17 Million Scheme - Several Defendants Charged Nationwide in Related Cases October 13, 2010, U.S. Attorney, District of Puerto Rico, Twenty Individuals Indicted for Violations of Controlled Substance Act, Identity Theft and Health Care Fraud October 13, 2010, U.S. Attorney, Northern District of Ohio, Six People Indicted as Part of International Organized Crime Ring that Stole Identities and Submitted $44 Million in Fraudulent Charges to Medicare October 13, 2010, U.S. Attorney, Southern District of New York, Manhattan U.S. Attorney Charges 44 Members and Associates of Armenian- American Organized Crime Enterprise with $100 Million Medicare Fraud October 13, 2010, Department of Justice, 73 Members and Associates of Organized Crime Enterprise, Others Indicted for Health Care Fraud, Crimes Involving More Than $163 Million October 7, 2010, U.S. Attorney, District of Arizona, Lake Havasu Physician to Pay $395,000 for False Medicare Billings October 6, 2010, U.S. Attorney, Central District of California, Los Angeles Medical Equipment Supplier Sentenced to 46 Months in Prison in Power Wheelchair Scheme to Defraud Medicare October 6, 2010, U.S. Attorney, Southern District of Georgia, Brunswick Resident Charged with Medicare Fraud Foley Hoag LLP. All Rights Reserved. Presentation Title

3 A Local Example of a Nation-wide Enforcement Initiative: Kyphoplasty What is kyphoplasty? Why are inpatient admissions a problem with this procedure? After settling with Medtronic for $75 million, government identifies new targets Enforcement at 2 levels: Medicare contractor U.S. Attorney s Office for the Western District of New York A number of settlements have already been reached with hospitals across the country: Range is from the low six figures to the low to mid seven figures Something you should review Why has this gotten momentum? $$$$$ Foley Hoag LLP. All Rights Reserved. Presentation Title

4 Federal Health Reform Has Arrived, and Has Brought with It More Enforcement Provisions Fulfilling what Senator Edward Kennedy described as the great unfinished business of our society, comprehensive health reform was adopted in the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act. The Patient Protection and Affordable Care Act (PPACA, P.L ), enacted on March 23, 2010, and the Health Care Reconciliation Act of 2010 (Reconciliation Act, P.L ), on March 30, Note that the new health reform law is not in one single document... rather, it is in 3 different places (PPACA, Manager s Amendment at the end of PPACA, and the Reconciliation Act). PPACA can be found at 111publ148/html/PLAW-111publ148.htm Foley Hoag LLP. All Rights Reserved. Presentation Title

5 And Before Health Reform, There Were Other New Initiatives: ARRA, FERA and HEAT Congress passed the American Recovery and Reinvestment Act of 2009 ( ARRA ) and the Fraud Enforcement and Recovery Act of 2009 ( FERA ). The government also created the Health Care Fraud Prevention and Enforcement Action Team ( HEAT ). While ARRA was an element of the stimulus package, it also contained whistleblower provisions for people who report suspected misuse or gross mismanagement of stimulus funds, much of which was allocated to health care projects. FERA substantially amended the False Claims Act by expanding liability to indirect recipients of federal funds, establishing liability for the willful retention of identified overpayments (even where there is no underlying false claim), adding a broadly defined materiality requirement, expanding protections for whistleblowers and providing relators with access to documents obtained by the government. The HEAT initiative is a joint effort between the Department of Justice ( DOJ ) and the Department of Health and Human Services ( HHS ). Under HEAT, more resources have been deployed to reduce skyrocketing health care costs and improve the quality of care by ridding the system of perpetrators who are preying on Medicare and Medicaid beneficiaries Foley Hoag LLP. All Rights Reserved. Presentation Title

6 Overview of Today s Program Discussion of Primary Fraud and Abuse Enforcement Tools Review of New Laws and Regulations that Impact Fraud and Abuse Enforcement False Claims Act and amendments Anti-kickback Statute and amendments, and its relation to the False Claims Act Civil monetary penalties law and amendment Stark and the new Stark Self-Disclosure Protocol Exclusion from federal health care programs Return of overpayments Revisions to the health care fraud criminal statute Exclusion statute changes Changes to the U.S. Sentencing Guidelines Areas of Focus for Hospitals from OIG s 2011 Work Plan and other program integrity initiatives Foley Hoag LLP. All Rights Reserved. Presentation Title

7 False Claims Act The civil FCA protects the Government from being overcharged or sold shoddy goods or services. It is illegal to submit claims for payment to Medicare or Medicaid that you know or should know are false or fraudulent. Filing false claims may result in fines of up to three times the programs loss plus $11,000 per claim filed. Under the civil FCA, each instance of an item or a service billed to Medicare or Medicaid counts as a claim, so fines can add up quickly. The fact that a claim results from a kickback or is made in violation of the Stark Law also may render it false or fraudulent, creating liability under the civil FCA as well as the AKS or Stark Law. Under the civil FCA, no specific intent to defraud is required. Knowing includes not only actual knowledge but also instances in which the person acted in deliberate ignorance or reckless disregard of the truth or falsity of the information. The civil FCA contains a whistleblower provision that allows a private individual to file a lawsuit on behalf of the United States and entitles that whistleblower to a percentage of any recoveries. Whistleblowers could be anyone -- current or ex-business partners, physicians, hospital or office staff, patients or competitors. There also is a criminal FCA (18 U.S.C. 287). Criminal penalties for submitting false claims include imprisonment and criminal fines. Physicians have gone to prison for submitting false health care claims. OIG also may impose administrative civil monetary penalties for false or fraudulent claims, as discussed below. Source: U.S. Department of Health and Human Services, Office of the Inspector General Foley Hoag LLP. All Rights Reserved. Presentation Title

8 False Claims Act (cont.) DOJ recovered $3 billion under the FCA in Of that, $2.5 billion was from health care cases. Whistleblowers received $385 million from False Claims Act recoveries. In May 2010, Health Alliance of Greater Cincinnati and one of its former member hospitals, The Christ Hospital, paid $108 million to settle Anti-Kickback Statute and False Claims Act allegations. This was the largest ever AKS health care settlement for a single hospital. The whistleblower in the case was a cardiologist who had formerly worked at The Christ Hospital. He received $23.5 million Foley Hoag LLP. All Rights Reserved. Presentation Title

9 False Claims Act Amendment Qui Tam Public Disclosure Bar Previously, FCA barred claims that were already publicly disclosed. Why? The purpose of the FCA was to have citizens bring false claims to the attention of the government. If the government already knows about the false claim, then a private FCA action only costs the government part of its recovery. Sometimes the public disclosure rule would stand in the way of suits that the government wanted the public to pursue The amendment now allows a private case to continue if the government wants it to. The actual process is a kind of double negative: if a motion to dismiss a private FCA case is made on these grounds, and the government opposes that motion, then the case won t be dismissed on those grounds Foley Hoag LLP. All Rights Reserved. Presentation Title

10 False Claims Act Amendment Qui Tam Public Disclosure Bar What does this mean for hospitals? More suits will be brought and more suits will survive. More U.S. Attorney s Office reviews of more matters. What can or should hospitals do about this? More vigilant efforts to respond to internal criticisms or complaints. Hospitals have to be careful though. FCA includes anti-retaliation provisions that protect whistleblowers Foley Hoag LLP. All Rights Reserved. Presentation Title

11 Anti-Kickback Statute The AKS is a criminal law that prohibits the knowing and willful payment of remuneration to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients). Remuneration includes anything of value and can take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies. In some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime. The statute covers the payers of kickbacks those who offer or pay remuneration as well as the recipients of kickbacks those who solicit or receive remuneration. Each party s intent is a key element of their liability under the AKS. Criminal penalties and administrative sanctions for violating the AKS include fines, jail terms, and exclusion from participation in the Federal health care programs. Under the CMPL, physicians who pay or accept kickbacks also face penalties of up to $50,000 per kickback plus three times the amount of the remuneration. Safe harbors protect certain payment and business practices that could otherwise implicate the AKS from criminal and civil prosecution. To be protected by a safe harbor, an arrangement must fit squarely in the safe harbor and satisfy all of its requirements. Some safe harbors address personal services and rental agreements, investments in ambulatory surgical centers, and payments to bona fide employees. Source: U.S. Department of Health and Human Services, Office of the Inspector General Foley Hoag LLP. All Rights Reserved. Presentation Title

12 Anti-Kickback Statute Amendments -- Intent AKS is an intent-based offense. Previously, to violate the AKS, an entity or individual had to have a specific intent to violate the AKS. This comes from a case called Hanlester. The Ninth Circuit held in Hanlester Network v. Shalala that the statute is not violated unless the defendant knew the law prohibited the giving or receiving of remuneration in return for referrals and acted with specific intent to violate the statute. While other courts may have expressly declined to follow the Hanlester decision, it created doubt and uncertainty. Now comes Section 6402(f)(2) of PPACA: (h) With respect to violations of this section, a person need not have actual knowledge of this section or specific intent to commit a violation of this section Foley Hoag LLP. All Rights Reserved. Presentation Title

13 AKS and False Claims AKS violations are never a good thing, but a finding of such a violation did not always lead to a clear path for repayment of the government. Some prosecutors started to argue that any claim made pursuant to a kickback was itself a false claim. The case law in this regard was mixed, with some courts holding that there was an implied certification in some situations where participating in a program like Medicaid impliedly certified compliance with all laws, including the AKS. A violation of the AKS would then result in a false statement that the hospital was complying with all laws, causing a potential violation of the FCA. Other courts rejected this idea Foley Hoag LLP. All Rights Reserved. Presentation Title

14 AKS FCA Amendment PPACA has clarified the law in this area. [A] claim that includes items or services resulting from a violation of [the AKS] constitutes a false or fraudulent claim for purpose of [the FCA].... What does this mean for hospitals? Impact on relationship with vendors; bad vendor behavior could lead to FCA liability for hospitals. What can or should hospitals do about this? Monitor and audit vendor relationships Cease dealings with questionable vendors Foley Hoag LLP. All Rights Reserved. Presentation Title

15 Civil Monetary Penalties Law OIG may seek civil monetary penalties and sometimes exclusion for a wide variety of conduct and is authorized to seek different amounts of penalties and assessments based on the type of violation at issue. Penalties range from $10,000 to $50,000 per violation. Some examples of CMPL violations include: presenting a claim that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent; presenting a claim that the person knows or should know is for an item or service for which payment may not be made; violating the AKS; violating Medicare assignment provisions; violating the Medicare physician agreement; providing false or misleading information expected to influence a decision to discharge; failing to provide an adequate medical screening examination for patients who present to a hospital emergency department with an emergency medical condition or in labor; and making false statements or misrepresentations on applications or contracts to participate in the Federal health care programs. Source: U.S. Department of Health and Human Services, Office of the Inspector General Foley Hoag LLP. All Rights Reserved. Presentation Title

16 CMP Amendment for Low Risk Matters In sum, CMPs are for civil violations of the AKS The amendment excludes certain items from the definition of remuneration. Effective March 23, 2010, PPACA provides further exceptions to the definition of remuneration under the CMP Law for the following types of programs: Other remuneration that promotes access to care and poses a low risk of harm to patients and federal health care programs. The transfer of items or services by a person (1) that consist of coupons, rebates, or other rewards from a retailer, (2) that are offered or transferred on equal terms available to the general public regardless of insurance status, and (3) that are not tied to the provision of other items or services reimbursed under a federal health care program. The transfer of items or services by a person (1) that are not offered as part of an advertisement or solicitation, (2) that are not tied to the provision of other items or services reimbursed under a federal health care program, (3) for which there is a reasonable connection between the items or services and the medical care of the individual, and (4) for which the person providing the items or services determines in good faith that the individual is in financial need.[6] Foley Hoag LLP. All Rights Reserved. Presentation Title

17 CMP Amendment for Low Risk Matters (cont.) What does this mean for hospitals? May be easier to enter into risk contracts; May be easier to offer: health and wellness services to the communities in which they are located. programs to provide health care services to the poor. incentives to current patients to encourage compliance with treatment regimes. What should you do? Let the dust settle a little on these to see how the amendment is being interpreted Foley Hoag LLP. All Rights Reserved. Presentation Title

18 Stark -- Physician Self-Referral Law The Physician Self-Referral Law, commonly referred to as the Stark law, prohibits physicians from referring patients to receive designated health services payable by Medicare or Medicaid from entities with which the physician or an immediate family member has a financial relationship, unless an exception applies. Financial relationships include both ownership/investment interests and compensation arrangements. For example, if you invest in an imaging center, the Stark law requires the resulting financial relationship to fit within an exception or you may not refer patients to the facility and the entity may not bill for the referred imaging services. The Stark Law is a strict liability statute, which means proof of specific intent to violate the law is not required. The Stark Law prohibits the submission, or causing the submission, of claims in violation of the law s restrictions on referrals. Penalties for physicians who violate the Stark Law include fines as well as exclusion from participation in the Federal health care programs. Source: U.S. Department of Health and Human Services, Office of the Inspector General Foley Hoag LLP. All Rights Reserved. Presentation Title

19 Stark: Designated Health Services Designated health services are: clinical laboratory services; physical therapy, occupational therapy, and outpatient speech-language pathology services; radiology and certain other imaging services; radiation therapy services and supplies; DME and supplies; parenteral and enteral nutrients, equipment, and supplies; prosthetics, orthotics, and prosthetic devices and supplies; home health services; outpatient prescription drugs; and inpatient and outpatient hospital services Foley Hoag LLP. All Rights Reserved. Presentation Title

20 Stark: New Self-Disclosure Protocol Because Stark is a strict liability statute, and the results of a violation are so draconian (forfeiting all claims related to the improper arrangement), people stayed underground with their violations. Compared to the AKS, there has been relatively little enforcement. Why? In part because the draconian penalties made it unattractive disproportionate to the wrong, especially if the error was an unsigned or expired agreement. Increasing concern about such arrangements among law enforcement and increasing settlements. All this resulted in pressure for a new way to address Stark issues Foley Hoag LLP. All Rights Reserved. Presentation Title

21 What is the New Self-Disclosure Protocol and How Does It Work? Section 6409 of the PPACA requires the Secretary of HHS, in cooperation with the Inspector General of HHS to establish a Medicare self-referral disclosure protocol that sets forth a process for providers of services and suppliers to self-disclose actual or potential violations of the physician self-referral statute (section 1877 of the Social Security Act). The protocol is available at: e_protocol.asp#topofpage Must be done in 60 days. It is at CMS s discretion as to whether you are accepted into the program or not Foley Hoag LLP. All Rights Reserved. Presentation Title

22 What is the New Self-Disclosure Protocol and How Does It Work? (cont.) The fact that a disclosing party is already subject to Government inquiry will not automatically preclude a disclosure. The disclosure must be made in good faith. The submission should include the following a. The name, address, national provider identification numbers (NPIs), CMS Certification Number(s) (CCN), and tax identification number(s) of the disclosing party. b. A description of the nature of the matter being disclosed. c. A statement from the disclosing party regarding why it believes a violation of the physician self-referral law may have occurred, including a complete legal analysis. d. The circumstances under which the disclosed matter was discovered and the measures taken upon discovery to address the issue and prevent future abuses. e. A statement identifying whether the disclosing party has a history of similar conduct, or has any prior criminal, civil, and regulatory enforcement actions (including payment suspensions) against it. f. A description of the existence and adequacy of a pre-existing compliance program that the disclosing party had g. A description of appropriate notices provided to other Government agencies. h. An indication of whether the disclosing party has knowledge of an inquiry by the Government.. CMS may use a disclosing party s submission(s) to prepare a recommendation to OIG and DOJ for resolution of False Claims Act, civil monetary penalty, or other liability Foley Hoag LLP. All Rights Reserved. Presentation Title

23 Return of Overpayments Everyone has overpayments. Under the prior law, you were not allowed to keep a known overpayment. There was, however, a certain lack of clarity about what to do. The resulted in different approaches to repayments: The big deal The over the transom To use a cover letter or not Overpayments became a big issue several years ago when several hospitals maintained substantial credit balances that were owed to CMS Foley Hoag LLP. All Rights Reserved. Presentation Title

24 Return of Overpayments: What is an overpayment? Has to be identifiable: Amount should not have been paid/was paid in erroneous amount You can identify what to return Calculations can be the hardest part, especially if a legitimate service was made do you refund all or part? Under the new law, you have 60 days to return the overpayment. Specific forms are used; they are found at: US&q=J14+MEDICARE+PART+A+OVERPAYMENT+REFUND+FORM&aq=f&aqi= m1&aql=f&oq=&gs_rfai Foley Hoag LLP. All Rights Reserved. Presentation Title

25 Return of Overpayments/The New Provision: Section 6402(d) (d) Reporting and Returning of Overpayments. (1) In general.--if a person has received an overpayment, the person shall (A) report and return the overpayment to the Secretary, the State, an intermediary, a carrier, or a contractor, as appropriate, at the correct address; and (B) notify the Secretary, State, intermediary, carrier, or contractor to whom the overpayment was returned in writing of the reason for the overpayment. (2) Deadline for reporting and returning overpayments. An overpayment must be reported and returned under paragraph (1) by the later of (A) the date which is 60 days after the date on which the overpayment was identified; or (B) the date any corresponding cost report is due, if applicable Foley Hoag LLP. All Rights Reserved. Presentation Title

26 The Healthcare Fraud Criminal Statute Did you even know there was a criminal statute for healthcare fraud? This was adopted in 1996 was part of HIPAA and covers government and private payors. At that time, several statutes aimed at healthcare fraud were added. These were seldom used because U.S. Attorneys did not understand them and they generally were not needed because the AKS and FCA are so effective when used as directed. Formerly, the intent that was required was specific intent to violate the statute, which is tough for a statute no one knows about. The Amended Healthcare Fraud Criminal Statute No longer need actual knowledge of the statute or specific intent to violate it. The definition of a healthcare offense has been changed. What does this mean for hospitals? While it is now a better tool for U.S. Attorney s Offices, it is unlikely that these changes will substantially increase the likelihood that you will be charged with violation of this law. What can or should hospitals do about this? Educate staff about the possibility of increased enforcement Foley Hoag LLP. All Rights Reserved. Presentation Title

27 Exclusion Statute OIG is legally required to exclude from participation in all Federal health care programs individuals and entities convicted of the following types of criminal offenses: (1) Medicare or Medicaid fraud, as well as any other offenses related to the delivery of items or services under Medicare or Medicaid; (2) patient abuse or neglect; (3) felony convictions for other health-care-related fraud, theft, or other financial misconduct; and (4) felony convictions for unlawful manufacture, distribution, prescription, or dispensing of controlled substances. OIG has discretion to exclude individuals and entities on several other grounds, including misdemeanor convictions related to health care fraud other than Medicare or Medicaid fraud or misdemeanor convictions in connection with the unlawful manufacture, distribution, prescription, or dispensing of controlled substances; suspension, revocation, or surrender of a license to provide health care for reasons bearing on professional competence, professional performance, or financial integrity; provision of unnecessary or substandard services; submission of false or fraudulent claims to a Federal health care program; engaging in unlawful kickback arrangements; and defaulting on health education loan or scholarship obligations. Source: U.S. Department of Health and Human Services, Office of the Inspector General Foley Hoag LLP. All Rights Reserved. Presentation Title

28 PPACA s Amendment of the Exclusion Statute SEC TERMINATION OF PROVIDER PARTICIPATION UNDER MEDICAID IF TERMINATED UNDER MEDICARE OR OTHER STATE PLAN. What does this mean? Amends the rules that link federal and state elements of Medicaid programs, to require that State Medicaid agencies exclude parent or other entities in the same corporate structure as an excluded entity. Individuals and entities excluded from Medicare might also be excluded from a state s Medicaid program. This provision becomes effective January 1, SEC MEDICAID EXCLUSION FROM PARTICIPATION RELATING TO CERTAIN OWNERSHIP, CONTROL, AND MANAGEMENT AFFILIATIONS. What does this mean? Amends the rules so that Medicaid agencies must exclude an entity if it owns or controls another entity that has failed to repay monies, has been suspended/excluded/terminated from participation in Medicaid, or is affiliated with an entity that has been suspended/excluded/terminated Foley Hoag LLP. All Rights Reserved. Presentation Title

29 U.S. Sentencing Guidelines What are the Sentencing Guidelines? How do they work? How do they relate to health care and hospitals? They are the source of the seven elements that must be in every effective compliance program. If those elements are present, they can help at sentencing (but we all hope never to get to sentencing!) Foley Hoag LLP. All Rights Reserved. Presentation Title

30 U.S. Sentencing Guidelines: Recent Changes The offense levels have been changed. What is an offense level? What was the change? The offense level was changed 20-50% where the loss involves more than $1 million. What does this mean for hospitals? Greater use of enforcement by example may result. What can or should hospitals do about this? Revisit the OIG compliance guidance for hospitals, available at and supplemented at Foley Hoag LLP. All Rights Reserved. Presentation Title

31 Program Integrity Provisions Sunshine Act Section 6402: Moving away from pay and chase Section 6001: Conflict of Interest Disclosures Section 6003: Physician disclosures regarding ancillary services. Section 6101: Nursing Home Ownership Final Rules regarding physician-owned hospitals Foley Hoag LLP. All Rights Reserved. Presentation Title

32 Sunshine Act: Questions and Answers Who does it apply to: pharmaceutical and medical device companies. What are they reporting? Payments to doctors, other health care professionals and teaching hospitals. When will we know the procedures for federal reporting? October 1, When does federal pre-emption start? January 1, When are the first federal reports due? March 31, What must be reported? Transfers of $10 or more and physician ownership interests. What is excluded? Product samples and discounts/rebates Foley Hoag LLP. All Rights Reserved. Presentation Title

33 Sunshine Act: Will the Federal Regulation (and Pre-emption) Come to Your Rescue? On reporting, this outcome resembles the federal health privacy regulations under HIPAA: the federal law will serve as a floor, but will not supersede more stringent state laws on reporting. The new federal law leaves virtually untouched state rules limiting types and amounts of payments and other industry interactions with health care professionals Foley Hoag LLP. All Rights Reserved. Presentation Title

34 Sunshine Act: Your Hospital s Resources Your own Code of Conduct regarding interactions with industry FAQs for personnel Policies, Procedures and Training Foley Hoag LLP. All Rights Reserved. Presentation Title

35 Section 6402: Moving away from pay and chase Suspension of Payments Pending Investigation of Credible Allegations of Fraud (1) In general. The Secretary may suspend payments to a provider of services or supplier under this title pending an investigation of a credible allegation of fraud against the provider of services or supplier, unless the Secretary determines there is good cause not to suspend such payments. (2) Consultation.--The Secretary shall consult with the Inspector General of the Department of Health and Human Services in determining whether there is a credible allegation of fraud against a provider of services or supplier. (3) Promulgation of regulations.--the Secretary shall promulgate regulations to carry out this subsection and section 1903(i)(2)(C) Foley Hoag LLP. All Rights Reserved. Presentation Title

36 Section 6001: Stark Conflict of Interest Disclosures Requirements for Hospitals To Qualify for Stark s Rural Provider and Hospital Exception to Ownership or Investment Prohibition. (C) Preventing conflicts of interest. (i) The hospital submits to the Secretary an annual report containing a detailed description of-- `(I) the identity of each physician owner or investor and any other owners or investors of the hospital; and (II) the nature and extent of all ownership and investment interests in the hospital. (ii) The hospital has procedures in place to require that any referring physician owner or investor discloses to the patient being referred, by a time that permits the patient to make a meaningful decision regarding the receipt of care, as determined by the Secretary (I) the ownership or investment interest, as applicable, of such referring physician in the hospital; and (II) if applicable, any such ownership or investment interest of the treating physician. (iii) The hospital does not condition any physician ownership or investment interests either directly or indirectly on the physician owner or investor making or influencing referrals to the hospital or otherwise generating business for the hospital. (iv) The hospital discloses the fact that the hospital is partially owned or invested in by physicians-- ``(I) on any public website for the hospital; and ``(II) in any public advertising for the hospital Foley Hoag LLP. All Rights Reserved. Presentation Title

37 Section 6003: Amendment to Stark to require physician disclosures regarding ancillary services. (a) In General.--Section 1877(b)(2) of the Social Security Act (42 U.S.C. 1395nn(b)(2)) is amended by adding at the end the following new sentence: ``Such requirements shall, with respect to magnetic resonance imaging, computed tomography, positron emission tomography, and any other designated health services specified under subsection (h)(6)(d) that the Secretary determines appropriate, include a requirement that the referring physician inform the individual in writing at the time of the referral that the individual may obtain the services for which the individual is being referred from a person other than a person described in subparagraph (A)(i) and provide such individual with a written list of suppliers (as defined in section 1861(d)) who furnish such services in the area in which such individual resides.' What does this mean: The Stark in-office ancillary services exception now requires that at the time of a referral, a written notice be given to the patient that he/she may receive the services from a supplier other than the referring practice and that informs the patient of alternative suppliers located in the area in which the patient resides. This provision is effective January 1, Foley Hoag LLP. All Rights Reserved. Presentation Title

38 Section 6101: Nursing Home Ownership (2) Information described.-- ``(A) In general.--the following information is described in this paragraph: (i) The information described in subsections (a) and (b), subject to subparagraph (C). (ii) The identity of and information on-- ``(I) each member of the governing body of the facility, including the name, title, and period of service of each such member; ``(II) each person or entity who is an officer, director, member, partner, trustee, or managing employee of the facility, including the name, title, and period of service of each such person or entity; and ``(III) each person or entity who is an additional disclosable party of the facility. (iii)the organizational structure of each additional disclosable party of the facility and a description of the relationship of each such additional disclosable party to the facility and to one another Foley Hoag LLP. All Rights Reserved. Presentation Title

39 Final Rules regarding physician-owned hospitals On November 2, 2010, CMS released final rules regarding the creation of new physician-owned hospitals. The practical effect of that prohibits new physician-owned hospitals. The actual provision prohibits new physician-owned hospitals from qualifying for certain exceptions to the Stark self-referral law. The new rules also requires disclose of all physician ownership on the hospital website. This new rules also implements a new element of the Stark law, which requires physicians to make disclosures in order to qualify for the in-office ancillary services exception Foley Hoag LLP. All Rights Reserved. Presentation Title

40 Your Questions What specific actions should organizations take to reduce exposure to unintended errors that might be discovered in billing issues? Foley Hoag LLP. All Rights Reserved. Presentation Title

41 Your Questions Are there changes or new issues related to a hospital s relationship with non-employed MDs, with particular interest around electronic medical record system collaboration; recruitment issues and issues around risk sharing/bonus distributions related to third party contracts? Foley Hoag LLP. All Rights Reserved. Presentation Title

42 Your Questions Are there any issues regarding relationships with vendors who collaborate with hospitals on services things to watch for, necessary contract provisions, specific prohibitions or limitations on the economic relationships, etc.? Foley Hoag LLP. All Rights Reserved. Presentation Title