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 THURSDAY, OCTOBER 1, 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. Albert W. Shay, Partner, 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

6 Presented by Albert W. Shay Partner, Morgan Lewis (202) Anjali N.C. Downs Associate, Epstein Becker Green (202) Samuel C. Cohen Associate, Arent Fox (202)

7 CMS Self-Referral Disclosure Protocol ( SRDP ) Historically, CMS had limited authority to compromise or waive physician self-referral sanctions (or any other claims liability) under the Stark Law 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 web site on September 23, 2010; revised May 6, rotocol.asp#topofpage 7

8 SRDP Basics 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. For resolution of actual and potential violations of the physician self-referral law Separate from the physician self-referral advisory opinion process. 8

9 SRDP Basics Open to all health care providers & suppliers Current government audit or investigation is not a bar to disclosure under SRDP CMS reserves right to refer matters to OIG or to DOJ Stay of ACA 6402 overpayment return requirement until settlement, withdrawal, or removal Do not make interim payments to CMS 9

10 SRDP Process Preparation of Materials by Disclosing Party Disclosure Submission ( , original, & one copy) Must submit electronically for automatic stay Acceptance / Request for Additional Information Law enforcement screening process CMS Review & Assessment Settlement Process Ability to pay consideration 10

11 Tips on Disclosure Submissions CHOWs, Mergers, & Acquisitions Clearly Identify Timing Issues & Contact CMS Assignment of Provider Agreement o Remember: Liability remains with Provider Agreement Provide a complete legal analysis for each disclosed noncompliant arrangement/relationship Group noncompliant events ( Clean House Disclosure) Provide certifications & supporting documentation 11

12 Tips on Disclosure Submissions Demonstrate cure or termination of noncompliant arrangement/relationship Remember period of disallowance rules Provide an appropriate financial analysis Use definition of Referral at 42 C.F.R Provide amounts due and owing by (1) disclosed arrangement/relationship; (2) referring individual/entity; and (3) year Describe methodology used; a comment about estimates See SRDP FAQs 12

13 SRDP FAQs 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) SRDP FAQs (pdf): Abuse/PhysicianSelfReferral/Downloads/FAQsPhySelfRef.pdf Physician Self-Referral FAQs: 13

14 SRDP FAQs Look Back Period Period during which the disclosing party may not have been in compliance Calculating Amount Due & Owing Will satisfy Section IV.B.2.a of the SRDP by submitting a financial analysis setting forth total amount actually or potential due & owing for claims improperly submitted and paid within the time frame for reopening determinations at 42 C.F.R (b) Calculating Total Remuneration Will satisfy Section IV.B.2.c of the SRDP by disclosing total remuneration received by a physician based upon the time frame for reopening determinations at 42 C.F.R (b) 42 C.F.R (b) A contractor may reopen an initial determination on its own motion within 4 years from the date of the determination for good cause 14

15 SRDP FAQs Section 6402(a) of the ACA Combined with the Fraud Enforcement and Recovery Act of 2009 ( FERA ), creates FCA liability for knowingly retaining (i.e., not reporting and returning) any overpayment within 60 days of the date on which the overpayment was identified Proposed rule implementing Section 6402(a) included proposed revisions to the reopening regulations However, until the proposed rule [see 77 FR 9179] is finalized, providers and suppliers of services disclosing actual or potential violations... under the [SRDP] may perform the financial analyses required under section IV.B.2 of the SRDP using the applicable time frame and requirements for reopenings established in the existing reopening regulations at 42 C.F.R (b). 15

16 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 16

17 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 The litigation risk associated with the matter disclosed The financial position of the disclosing party Should you make a settlement offer? 17

18 Number of Settlement under the SRDP by Year 2011: : : : : 4 (as of 9/16) Why such small numbers in 2015? 18

19 Settled SRDP Disclosures Since establishing the SRDP, 69 settlements Average settlement by year: o 2011: approximately $242,353 (but skewed) o 2013: approximately $78,000 o 2013: approximately $195,000 o 2014: approximately $125,000 o 2015 (as of 09/16): approximately $200,000 Largest Settlement: $584,700 Smallest Settlement: $60.00 More Information about SRDP settlements: Abuse/PhysicianSelfReferral/Self-Referral-Disclosure-Protocol- Settlements.html 19

20 SRDP Challenges and Developments Increasing number of self-disclosures and increasing backlogs In 2014, CMS updated its estimates - doubled the average number of self-disclosures it anticipated receiving annually and doubled the estimated time for review of each disclosure submission CMS requested comments on establishing expedited SRDP review process for certain disclosures that have no indicia of fraud and that involve common arrangements, such as leasing and personal service arrangements 20

21 New SRDP Instructions On March 4, 2015, CMS issued special instructions for SRDP submissions involving solely 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) Abuse/PhysicianSelfReferral/Downloads/Disclosures-Noncompliance- Instructions.pdf The information to be submitted with the disclosure includes identifying information for the hospital, period(s) of noncompliance, and certifications regarding the hospital s period of noncompliance Requested information does not include Medicare referral calculations 21

22 2016 Physician Fee Schedule Proposed Rule Notable proposals included: Clarifications In Writing Requirement: formal agreement or a single document not required. 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. 42 C.F.R (a), (b), (d), (e), (h), (l), (p), (r), (t), (v), and (w). Term requirement in Comp Arrangements: exceptions requiring a term of at least one year may be met so long as the arrangement clearly establishes a business relationship that will last for at least 1 year. A formal agreement that sets forth the term of the agreement is not necessary. 42 C.F.R (a), (b), and (d). 22

23 2016 Physician Fee Schedule Proposed Rule Clarifications Holdover Policy: extends the holdover period perhaps even indefinitely provided the holdover continues on the same terms and conditions as the original arrangement and continues to meet FMV requirements. 42 C.F.R (a), (b), and (d). New Exceptions Timeshare Arrangements: protect instances when a hospital or physician organization leases on a timeshare basis to a physician and permits predominantly evaluation and management services, and certain CLIAwaived tests. 42 C.F.R (y). 23

24 Stark and Medicaid All Children s Health System Decision Since pediatric environment, nearly all Federal health care program claims were paid by Medicaid Original Stark Law applied only to Medicare claims, but has since grown to (potentially) encompass Medicaid Federal government pays Federal Financial Participation (FFP) to states when they pay a Medicaid claim Court ruled that All Children s caused, through its tainted Stark claims, the State of Florida to improperly claim and receive FFP, thus violating the Stark Law and FCA In other words, CMS cannot pay FFP for services provided under Medicaid if the payment would be prohibited under Medicare due to an illegal referral in violation of the Stark Amendment. 24

25 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, 2014 March 31, 2015 the OIG recovered over $19.5 million 25

26 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 26

27 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 27

28 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 28

29 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 29

30 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 30

31 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 31

32 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 32

33 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 33

34 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 34

35 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. 35

36 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 36

37 Examples of Recent Settlements Abode Healthcare, Inc., Issue: Documentation did not support hospice eligibility Period: October 1, 2009 April 30, 2013 Settlement Amount: $2,674,895 Physicians Immunodiagnostic Laboratory, Inc. Issue: Billing for services provided by an excluded individual Period: May 20, 2008 November 9, 2012 Settlement Amount: $1,386,816 37

38 Examples of Recent Settlements (continued) Arrowhead Cardiology Medical Group, Inc. Issue: Submitting improper claims for telemetry services Period: December 6, 2006 July 9, 2013 Settlement: $485,217 St. Agnes Healthcare, Inc. d/b/a St. Agnes Hospital Issue: Lease arrangement potentially violating AKS and Stark Law Period: December 1, 2001 September 30, 2009 $1,414,248 38

39 Best Practices for Self-Disclosure Timing Determining whether self-disclosure is appropriate To whom should the self-disclosure be made? Potential risks of making a self-disclosure Preserving privileged communications 39

40 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) 40

41 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 41

42 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 42

43 Timing 60 Day Rule Determining when an overpayment has been identified 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 Operational Issue: Are you able to decide if and to whom a self-disclosure is required (and to make the required self-disclosure) within 60 days of becoming aware of a potential overpayment? 43

44 Is Self-Disclosure is 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? 44

45 Considerations Scope Isolated or systemic Circumstances surrounding intent Explanations and defenses Dollars involved Effectiveness of review of compliance program Trust for, and relationship with, local and national enforcement people vs. MAC Risks of disclosing vs. Risks of not disclosing 45

46 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 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 46

47 Who Should Receive the Self-Disclosure: OIG SDP vs. CMS SRDP Timing of Disclosure Anticipated Releases ISSUE OIG SDP CMS SRDP 60 day overpayment refund 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 repayment refund rule Consider a rolling disclosure Overpayment Liability What about disclosing to the Department of Justice (Main Justice, local AUSAs)? 47

48 Potential Risks of Self-Disclosure 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 potentially not a public disclosure under FCA 48

49 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 49