Fraud, Waste and Abuse

Transcription

1 Fraud, Waste and Abuse Understanding and Avoiding Liability Kentucky Pharmacists Association 2015 Annual Meeting Anne-Tyler Morgan, Esq. McBrayer, McGinnis, Leslie & Kirkland, PLLC Fraud & Abuse 1

2 Goals of Presentation Part I: Identify Fraud & Abuse Topics and Discuss Implications Part II: Analyze Scope of Fraud & Abuse Restrictions and Discuss Implications Fraud & Abuse 2

3 Goals of Presentation cont. Part III: Discuss How to Avoid Fraud & Abuse Liability Part IV: Discuss Basic Rules of Responding to Fraud & Abuse Inquiry Fraud & Abuse 3

4 Part I Identify Fraud & Abuse Topics and Discuss Implications Fraud & Abuse 4

5 Why Understanding Fraud & Abuse is Important Civil Penalties Criminal Penalties Exclusion from / Ineligibility for Payor Reimbursement Fraud & Abuse 5

6 What is Fraud? Examples: Billing for nonexistent prescriptions Billing for brand when generics are dispensed Billing for non-covered items as covered Billing for prescriptions never picked up Inappropriate use of dispense as written( DAW ) codes Fraud & Abuse 6

7 What is Waste? Practices resulting in unnecessary cost: Overuse, underuse and misuse of care Non-value-added services Medication errors Prescription refill errors Fraud & Abuse 7

8 What is Abuse? Unnecessary, inappropriate care Care doesn t meet professionally recognized standards Provider conduct inconsistent with acceptable business and/or pharmacy practices resulting in greater reimbursement Fraud & Abuse 8

9 Part II Analyze Scope of Fraud & Abuse Restrictions and Discuss Implications Fraud & Abuse 9

10 Scope: Gov t Business Medicare o Part B o Part C (Medicare Advantage) o Part D Medicaid CHIPs TRICARE Federal Employee Health Benefit Programs Fraud & Abuse 10

11 Scope: Private Business CMS exclusionary authority extends to providers convicted under federal or state law of fraud or other misconduct in connection with the delivery of health care items or services. A fraud & abuse mistake with a private payor may carry over into government business. Fraud & Abuse 11

12 Regulatory Regimes HIPAA Federal/State Anti-Kickback Laws Federal/State Anti-Inducement Laws Federal/State False Claims Laws Fraud & Abuse 12

13 Health Care Fraud 18 U.S.C (a) Whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice (1) to defraud any health care benefit program; or (2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program, in connection with the delivery of or payment for health care benefits, items, or services, shall be fined under this title or imprisoned not more than 10 years, or both.[ ] (b) 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. Fraud & Abuse 13

14 Health Care Fraud If the health care fraud resulted in someone s death, imprisonment may be for a term of years or for LIFE. Fraud & Abuse 14

15 False Claims Act Prohibits: Presenting a false claim for payment or approval; Making or using a false record or statement in support of a false claim; Conspiring to violate the False Claims Act; Falsely certifying the type/amount of property to be used by the Government; Certifying receipt of property without knowing if it s true; Buying property from an unauthorized Government officer; and Knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay the Government. 31 United States Code Fraud & Abuse 15

16 False Claims Act Penalties Minimum of $5,500 but no more than $11,000, plus three times the amount of damages the government sustains because of the act The penalty is incurred per violation, which can add up. Fraud & Abuse 16

17 False Claims Act For example, assume a false claim for $100 one fraudulently-claimed prescription. Gov t recovery could be 3x $100 for the damages, and the maximum penalty of $11,000 = $11,300 penalty for that one claim. If there were 100 false claims for prescriptions over ten year statute of limitations under the FCA, however, the maximum penalty would be $1,130,000 for an average of only ten fraudulent prescription claims a year less than one a month. Fraud & Abuse 17

18 Risk of Enforcement Two Words: Qui Tam - means that anyone, anywhere can be a false claims watchdog. o Heightened Gov t Enforcement o Disgruntled Employees o Jealous Competitors o Qui Tam Hobbyists Fraud & Abuse 18

19 Anti-Kickback Statute 18 USC 1320a-7b(b) Prohibits knowingly or willingly: Inducing or rewarding referrals of business payable under a federal health program Falsely applying for benefits or payments Concealing or failing to disclose knowledge Fraud & Abuse 19

20 Anti-Kickback Statute Felony conviction Imprisonment up to five years and/or Maximum of $25,000 fine Potential exclusion from federal health care programs Fraud & Abuse 20

21 Anti-Kickback Statute OIG issued a notice of proposed rulemaking October 2, 2014 Codifies existing safe harbors to the AKS and adds new ones Fraud & Abuse 21

22 Anti-Kickback Statute Changes/codification of existing safe harbors: Part D Cost-Sharing Waivers by Pharmacies: Protects certain cost-sharing waivers that are generally prohibited by the AKS, including pharmacy waivers for needy Medicare Part D participants Pharmacies would need to meet three criteria: (1) the waiver/reduction is not advertised or part of a solicitation; (2) the pharmacy does not routinely wave cost-sharing; and (3) before waiving a cost-sharing obligation, the pharmacy determines in good faith that either the beneficiary has a financial need or the pharmacy fails to collect cost-sharing amounts after making a reasonable effort to do so. Fraud & Abuse 22

23 Anti-Kickback Statute New safe harbor: Retailer rewards programs: The offer or transfer of items or services for free or less than fair market value by a person, if (i) the items or services consist of coupons, rebates, or other rewards from a retailer; (ii) the items or services are offered or transferred on equal terms available to the general public, regardless of health insurance status; and (iii) the offer or transfer of the items or services is not tied to the provision of other items or services reimbursed in whole or in part by the program under title XVIII or a State health care program (as defined in section 1128(h)). Fraud & Abuse 23

24 Anti-Kickback Statute Subsection (iii) precludes the use of rewards only to get federal reimbursement. For instance, a drugstore program that offered a $20 coupon to customers, including Medicare beneficiaries, who transferred their prescriptions to the drugstore would not meet this criterion because the $20 coupon would be tied to the drugstore s getting the recipients Medicare Part D prescription drug business. On the other hand, a program that awarded a $20 coupon once a customer spent $1,000 out-of-pocket in the store even if a portion of that $1,000 included copayments for prescription drugs would likely meet the criterion. Fraud & Abuse 24

25 Exclusion from Federal Health Care Programs OIG can exclude businesses/individuals that pose a business risk to the government through violations of rules that protect against fraud, waste and abuse. This will prevent companies/individuals from participating in government programs, and a payment ban applies to all methods of federal program reimbursement. Fraud & Abuse 25

26 Exclusion from Federal Health Care Programs 42 CFR 1001 Mandatory exclusions from federal health care programs for conviction of crimes involving delivery of services under Medicare or other serious criminal convictions related to fraud, health care abuse, or controlled substances. Fraud & Abuse 26

27 Exclusion from Federal Health Care Programs 42 CFR 1001 Permissive exclusions for fraud, waste, abuse and violations of other laws, such as False Claims Act. Fraud & Abuse 27

28 Exclusion from Federal Health Care Programs Items/services furnished or ordered by an excluded provider Items/services furnished to a hospital inpatient or outpatient based on an excluded provider s order Administrative and management services not directly related to patient care but necessary to provision of care and items. Fraud & Abuse 28

29 Exclusion from Federal Health Care Programs Services reimbursed through prospective payment or bundled physician group Processing of claims submitted to a Medicare fiscal intermediary Services by an excluded administrator, billing agent, accountant, claims processor or utilization reviewer Items or equipment sold by an excluded manufacturer or supplier and used to treat or care for beneficiaries Fraud & Abuse 29

30 Exclusion from Federal Health Care Programs No Federal health care program payment may be made for any item or service furnished, ordered, or prescribed by an individual or entity excluded by the Office of Inspector General, which means there s a prohibition on hiring excluded individuals. There s a civil monetary penalties for $10,000/claim submitted for services/items furnished during exclusion ƒ Knew or should have known person excluded Affirmative duty to check employees exclusion status 42 U.S.C. 1395(e)(1) 42 C.F.R Fraud & Abuse 30

31 Part III Discuss How to Avoid Fraud & Abuse Liability Fraud & Abuse 31

32 Indicators of Potential Fraud, Waste, Beneficiary Issues and Abuse Does the prescription look altered or possibly forged? Have you filled numerous identical prescriptions for this beneficiary, possibly from different doctors? Is the person receiving the service/picking up the prescription the actual beneficiary(identity theft)? Is the prescription appropriate based on beneficiary s other prescriptions? Does the beneficiary s medical history support the services being requested? Fraud & Abuse 32

33 Indicators of Potential Fraud, Waste, Provider Issues and Abuse Does the provider write for diverse drugs or primarily only for controlled substances? Are the provider s prescriptions appropriate for the member s health condition (medically necessary)? Is the provider writing for a higher quantity than medically necessary for the condition? Is the provider performing unnecessary services for the member? Fraud & Abuse 33

34 Purchasing Arrangements Direct from Manufacturer/Wholesaler o Purchase Agreements o Supply Agreements Group Purchasing Organization o Participation Agreement Fraud & Abuse 34

35 Purchasing F&A Laws Fraud & Abuse Law Implicated by Purchasing: o Anti-Kickback Law Anti-Kickback laws generally prohibit payment or receipt of payment in exchange for referrals for health care paid for by the Government. Fraud & Abuse 35

36 Purchasing F&A Problem Fraud & Abuse in Purchasing o Discounts offered in exchange for referrals to products reimbursed by Government payors Fraud & Abuse 36

37 Purchasing Direct In Manufacturer/Wholesaler Purchase/Supply Agreements Watch for: o Sliding-scale discounts o Discounts based on prior periods o Retroactive agreements o Rebates in the form of incentive payments Fraud & Abuse 37

38 Purchasing GPO In GPO Agreements Watch For: o Sliding-scale discounts o Discounts based on prior periods o Reporting Fraud & Abuse 38

39 Prohibited Kickback? Pharmaceutical Supply Agreement permits pharmacy to purchase 1000 $5/unit, but if the pharmacy purchases 10,000 units, the charge will be only $2/unit. Prohibited Kickback or Permitted Discount? Fraud & Abuse 39

40 Prohibited Kickback? Pharmaceutical Supply Agreement gives pharmacy a $5/unit price for the first 1000 units the pharmacy dispenses, and $2/unit price if the pharmacy dispenses 10,000 units in one year. Prohibited Kickback or Permitted Discount? Fraud & Abuse 40

41 Advertising Pharmacy Signage o Inside and outside signage Voice and Print Ads o Television o Radio o Newspaper o Mail Fraud & Abuse 41

42 Advertising F&A Laws Fraud & Abuse Law Implicated by Advertising: o Anti-Inducement Law Anti-Inducement laws typically prohibit giving anything of value to an individual that is likely to influence that individual to make a government-funded purchase from a particular provider. Fraud & Abuse 42

43 Advertising F&A Problem Fraud & Abuse in Advertising: o Discounts or gifts offered to influence an individual to purchase an item or service paid for by the government. Fraud & Abuse 43

44 Advertising F&A Problem Cont. Watch for these Incentives, if Aimed at Government Beneficiaries o Coupons o Rebates o Buy-One-Get-One o Gifts o Prizes Fraud & Abuse 44

45 Sanctioned Incentives Safe harbor for retail rewards: Exceptions: Nominal Value - $10 or less ($50 annually), no cash or cash equivalent (e.g., gift card). Value to promote Government-identified Preventive Services Fraud & Abuse 45

46 Sanctioned Incentives Cont. New Health Reform Exception: o Retailer Coupons, Rebates and Rewards o Available to General Public o Not Tied to Government-Reimbursed Services Fraud & Abuse 46

47 Prohibited Inducement? Real-Life Example: Pharmacy advertises $5 off flu shot (regularly $29.95) to the first 100 Medicare Part D plan members. Prohibited inducement? Fraud & Abuse 47

48 Prohibited Inducement? Real-Life Example: Pharmacy ad in the Sunday paper offers flu shots for $15, if the patient signs-up for Rewards Card. Prohibited Inducement? Fraud & Abuse 48

49 Pricing Focusing on pharmaceutical items and services reimbursable by the government. Often reimbursement arrangements provide that the pharmacy will receive the lesser of discounted rate or pharmacy s U&C. Fraud & Abuse 49

50 Pricing cont. U&C means Usual & Customary Cost and is the amount that a cash-paying customer would expect to pay without the benefit of discounts or insurance. How is U&C different from MFN? Fraud & Abuse 50

51 Pricing F&A Law Fraud & Abuse Law Implicated by Pricing: o False Claims Act False Claims Act generally penalizes the submission of inaccurate or otherwise noncompliant claims for health care services to be paid for by the Government. Fraud & Abuse 51

52 Pricing F&A Problem Pricing Fraud & Abuse Issues Comes into Play if the Pharmacy: Bills a Government program the wrong price Receives too much reimbursement from the Government Fraud & Abuse 52

53 Protecting Price Watch for U&C Erosion Discounts, special offers and other reductions in price may erode a pharmacy s U&C price. In addition to lowering reimbursement, submitting a claim to the Government for more than the allowable amount may be a false claim and can result in exclusion and/or significant fines. Fraud & Abuse 53

54 Protecting Price Cont. Commercial payors also commonly use the lesser of reimbursement methodology - meaning that reduced U&C may have a significant negative financial impact beyond Government reimbursement. Fraud & Abuse 54

55 Price Protectors Barrier to entry (e.g., PSC card) Discounted or free items/services to persons without insurance coverage for those items/services and who would not otherwise be able to afford them. Third party covers discount off item/service Fraud & Abuse 55

56 Real Life Example: False Claim? Pharmacy offers PSC for an annual fee. Medicaid changes definition of U&C to include prices available under PSC. Medicaid reimburses pharmacy the lesser of (i) contract rate, (ii) Government-imposed rates, or (iii) pharmacy s U&C. Fraud & Abuse 56

57 False Claim? Real-Life Example: Pharmacy ad in the Sunday paper offers flu shots for $15, but, unbeknownst to pharmacy, the billing system still submits claims for $29.95 to the Government for each flu shot. False Claim? Fraud & Abuse 57

58 Part IV Discuss Basic Rules of Responding to Fraud & Abuse Inquiry Fraud & Abuse 58

59 Investigations Anatomy of a Fraud and Abuse Investigation: The federal Health and Human Services Office of Inspector General (OIG) receives complaints alleging fraud or abuse, thousands each year. If OIG determines that a complaint contains a credible allegation, OIG may pursue additional information by formal or informal means. Fraud & Abuse 59

60 Investigations Cont. Before responding to a request for information about alleged fraud or abuse: o Take a Deep Breath o Call Trusted Legal Advisor o Complaint is an Allegation, Not a Conviction Fraud & Abuse 60

61 Investigations Cont. You can begin defending against an allegation of fraud and abuse before it starts: o Establish, maintain and update a comprehensive compliance plan o Maintain records that all pharmacy personnel are trained and retrained on the pharmacy s compliance policies o Maintain complete and accurate records of services provided Fraud & Abuse 61

62 Your Responsibilities Know/follow applicable laws, regulations, policies, procedures Report known/suspected violations Do annual compliance/specialized Medicare compliance training Establish and adhere to your Code of Conduct Do not retaliate against whistleblowers Fraud & Abuse 62

63 Disclaimer Nothing in this presentation shall be construed as a legal approval or disapproval of any particular proposal/activity/ad. Further, nothing in this presentation is intended to be a legal opinion regarding whether any particular proposal/activity/ad is legal or illegal. Independent legal review of each proposal/activity/ad is necessary before giving legal guidance due to the highly factdependent nature of laws and regulations. Fraud & Abuse 63

64 The End QUESTIONS? Fraud & Abuse 64

65 Contact Information Anne-Tyler Morgan, Esq. (859) , ext Fraud & Abuse 65