The Push and Pull of Legal Compliance: The Odd Couple. Ohio Hospital Association. Annual Meeting June 14, 2016

Transcription

1 The Push and Pull of Legal Compliance: The Odd Couple Ohio Hospital Association Annual Meeting June 14, 2016 Anthea R. Daniels Baker Donelson, Bearman, Caldwell & Berkowitz 211 Commerce Street, Suite 800 Nashville, TN Hawksmoor Way Cleveland, Ohio (615) I. Introduction: To self-report, how to self-report, when to self-report, and to whom to self-report that is the question. This issue continues to build momentum as more and more federal guidance, warnings and settlements continue to be published concerning self-reporting. Within a health care institution, often there are various constituents involved in deciding whether, how and when to self-report. Typically, compliance, legal, finance, the c-suite and Board committees all weigh in on an audit and eventual self-disclosure. This presentation addresses the issues of getting all on board as to whether self-reporting is appropriate, the making of a qui tam relator and the diffusing of potential qui tam relators. Also discussed is the delicate dance between legal's oversight and compliance's cleanup of a matter gone bad. What are the best practices to help with this relationship? What policies and procedures can be implemented to assist with this matter? Background Information: II. The Anti-Kickback Statute (42 U.S.C. 1320a-7B(b)) "Whoever knowingly and willfully solicits or receives any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind 1

2 (A) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal healthcare program, or (B) in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a federal healthcare program. Shall be guilty of a felony and upon conviction thereof, shall be fined not more than $25,000 or imprisoned for not more than five years, or both. Additional part of Statute addresses those that offer or pay any remuneration. III. AKS Penalties A. Criminal Criminal and civil/administrative penalties Imprisonment of up to 5 years $25,000 per violation B. Civil/Administrative: Civil monetary penalties False Claims Act Liability Exclusion Potential $50,000 CMP per violation Civil assessment of up to three times amount of kickback C. Key Points Broad Application -- All types of healthcare providers and persons -- All types of remuneration. Intent and One Purpose Rule. 2

3 Voluntary Safe Harbors. Facts and Circumstances Analysis. D. Statutory Exceptions and The Safe Harbors Statutory Exceptions: For example, employment, discounts, managed care plans, group purchasing, etc. Safe Harbors: Not like a Stark Exception. No need to comply with each term in a Safe Harbor. Weighing the situation of falling outside of a Safe Harbor. -- Arrangement could be legal or illegal E. The Safe Harbors Investments in publicly traded and small entities. Referral services. Discounts. Warranties. Employees. Space rentals. Equipment rentals. Personal services/management agreements. Group purchasing organizations. Co-insurance waivers. Sale of professional practices. 3

4 E-prescribing, EHRs. Increased coverage, reduced cost-sharing, or reduced premiums offered by health plans. Price reductions offered to health plans, eligible managed care organizations. Practitioner recruitment. Obstetrical malpractice insurance subsidies. Investments in group practices. Cooperative hospital service organizations. Ambulatory surgical centers. Ambulance replenishing. IV. Stark Law -- Background A. Ethics in Patient Referral Act of 1989 Florida studies Clinical labs 1992 B. Omnibus Budget Reconciliation Act of 1993 Expansion to 10 DHS C. Stark Regulations Stark I -- Final Regulations: August 14, 1005 Stark II -- Phase I Final Regulations: January 4, Phase II Final Regulations: March 26,

5 -- Phase III Final Rule: September 5, FY 2009 IPPS Final Rule: August 19, Medicare Physician Fee Schedule Final Rule: November 16, 2015 D. Basics of Stark Law A physician or immediate family member, who has a financial relationship with an entity, cannot make referrals of Medicare/Medicaid beneficiaries to such entity for the furnishing of a designated health service. What is a referral? A referral to an entity for a DHS for which payment is made under Medicare. Includes ordering an item or service. Includes referral to another physician to perform or supervise service. E. Basics of Stark Law Who is an immediate family member of a physician? Spouse Parents Child Sibling Stepparent, stepchild, stepsiblings Father-in-law, son-in-law, brother-in-law Grandparent/grandchild Spouse of grandparent or grandchild F. Basics of Stark Law What is a financial relationship? 5

6 Ownership -- Equity -- Debt -- Indirect and direct Compensation -- Direct -- Indirect G. Designated Health Services Clinical lab Physical therapy/occupational therapy Radiology Radiation therapy Durable Equipment Parenteral and enteral nutrients, equipment and supplies Prosthetics and orthotics Home health Outpatient prescription drugs Inpatient and outpatient hospital services *Definitions in Regulations. List of CPT/HCPCS codes used to describe certain DHS. Posted on CMS website H. Penalties for Violating Stark Per se illegal. 6

7 Refund of Improperly Paid Claims. Civil Monetary Penalty -- $15,000 per referral. Circumvention Scheme -- $100,000. Exclusion From Medicate Program. No Criminal Penalties. Stark Self-Disclosure Protocol. I. Stark Exceptions Exceptions for Ownership/Investment Interests. Exceptions for Compensation Arrangements. Exceptions for Ownership and Compensation Arrangements. J. HEAT Provider Compliance Training Comparison of the Anti-Kickback Statute & Stark Law* Prohibition The Anti-Kickback Statute (42 USC 1320a-7b(b)) Prohibits offering, paying, soliciting or receiving anything of value to induce or reward referrals or generate Federal health care program business The Stark Law (42 USC 1395nn) Prohibits a physician from referring Medicare patients for designated health services to an entity with which the physician (or immediate family member) has a financial relationship, unless an exception applies Prohibits the designated health services entity from submitting claims to Medicare for those services resulting from a prohibited referral Referrals Referrals from anyone Referrals from a physician Items/Services Any items or services Designated health services 7

8 Intent Intent must be proven (knowing and willful) No intent standard for overpayment (strict liability) Intent required for civil monetary penalties for knowing violations Penalties Criminal: Fines up to $25,000 per violation Up to a 5 year prison term per violation Civil/Administrative: False Claims Act liability Civil monetary penalties and program exclusion Potential CMP per violation Civil assessment of up to three times amount of kickback Civil: Overpayment/refund obligation False Claims Act liability Civil monetary penalties and program exclusion for knowing violations Potential $15,000 CMP for each service Civil assessment of up to three times the amount claimed Exceptions Voluntary safe harbors Mandatory exceptions Federal Health Care Programs All Medicare/Medicaid *This chart is for illustrative purposes only and is not a substitute for consulting the statutes and their regulations. V. The OIG Provides Self Disclosure Protocol Originally Issued October 30, 1998 by HHS (63 Fed Reg 58399) Updated April 17, 2013 A. Why Report Right Thing to Do Avoid Exclusion from Programs Decrease Potential Penalty 8

9 Avoid Corporate Integrity Agreement? B. Biggest Dilemma of Self-Disclosure Intent Based Conduct (potential violation of federal criminal, civil or administrative law for which CMPs are authorized) vs. Mistake Thus, OIG self-disclosure or treat as overpayment/refund. C. Disclosure of..... False Billing Excluded Persons Anti-Kickback Statute and Physician Self-Referral Law violations VI. The Self-Referral "Stark" Disclosure Protocol ("SROP") A. Established and Implementation - September 23, 2010 Prior to ACA, HHS Secretary had limited authority to compromise or minimize an overpayment regarding Stark. B. Disclosing Party Submits: information about Parties; description of matter being disclosed; duration of violation; how matter was discovered and measures taken to prevent future abuse; statement identifying history of similar conduct; description of compliance program; notices to other government agencies, if any; whether matter is under current inquiry by government; legal analysis of how statute was violated; 9

10 analyze the time period in question; provide financial analysis of total amount potentially due, how amount was calculated, total amount physician received; summary of the audit activities; and certification that disclosure contains truthful information. VII. The Qui Tam Relator A. The Basics A qui tam relator files a complaint under seal with the Clerk of Courts and must give copies to the Department of Justice and local U.S. Attorney. Must serve upon Department of Justice full evidence in the whistleblower's possession regarding allegations in the Complaint. Complaint and evidence remains under seal for 60 days (or longer if requested). B. Government Intervention After 60 days, Department of Justice can intervene and proceed with case. If Department of Justice does not intervene, whistleblower may proceed on behalf of the United States. C. Show Me the Money.... If Department of Justice intervenes, whistleblower can get 15-25% of recovery or settlement depending on contribution. Can be as little as 10% of whistleblower depending on evidence provided. If Department of Justice does not intervene, whistleblower can get 20-30%. Whistleblower also gets reasonable attorney's fees and expenses. VIII. The Government's Most Recent Guidance A. Individual Accountability for Corporate Wrongdoing. 10

11 Sally Quillian Yates - Deputy Attorney General. To AUSA's in civil, criminal and other divisions. Outcome of a working group's discussion of AUSAs with experience in the area. B. Focus of Memorandum seeking accountability from the individuals who perpetrate the wrongdoing. Some of these measures are new, while others reflect best practices that are already employed by many federal prosecutors. 6 steps to pursue individual corporate wrongdoing C. The Six Steps 1. Disclose all Facts To get any cooperation credit, provide to Department of Justice all relevant facts about individuals involved in corporate wrongdoing. Can't pick and choose which facts to disclose. Applies to criminal or civil matters. All info is disclosed if it is sufficient to identify the individuals responsible. 2. Focus on Individuals at Beginning Help ferret out the full extent of corporate misconduct. Increase individual cooperation with investigation to provide information about "higher up" individuals. Increase civil or criminal charges against individuals too. 3. Criminal and Civil Attorneys Should Communicate Regularly Parallel development of civil and criminal proceedings. 11

12 4. Preserve Ability to Go After Individuals No letting officers or employees off. 5. Resolve All Cases Together Don't resolve corporate case without resolution of individual cases. Use of tolling agreements to preserve cases. 6. Civil AUSAs should focus on individuals too Twin aim: recovering as much money as possible and accountability/deterrence of individual misconduct. Result in significant long-term deterrence. D. To Self-Report, Repay as an Overpayment or Bury Your Head in the Sand... Hmmm E. The Making of the Qui Tam Relator Arcadian Regional Health System is a non-profit hospital tax exempt entity with two acute care facilities, a rehab hospital and a nursing home. For years it has been aligned with the Adams Clinic, a 100 doctor multi-specialty group that is the predominant physician organization in the area. Arcadian and Adams have cooperated on contracting activities with health plans and Adams physicians are the most important source of patients for both of the Arcadian hospitals Who? 2. Why? 3. When? 4. How? F. The Delicate Dance Between Legal's Oversight and Compliance's Clean Up G. Best Practices for a Working Relationship H. Policies and Procedures I. Hypotheticals Hypothetical 1

13 Recently, Horizon Health Services, a for profit company, has acquired the neighboring Mission Hospital and is attempting to establish itself by offering services that have not been available in the area, such as a complex imaging center and a modern cardiac catheterization lab. Horizon has approached the Adams Clinic about working together on new facilities and is willing to have the Adams Clinic co-invest in new ventures and acquire an interest in Mission Hospital. The Adams Clinic leadership is interested in these proposals due to concerns among many of its specialists that Arcadian s facilities are falling behind modern developments in technology and they are seeing declining reimbursement because they cannot perform certain specialty services and need to make referrals out of the area. Arcadian gets wind of the conversations between Horizon and Adams Clinic and its leadership goes into full panic mode. Arcadian quickly puts together a proposal under which it will commit to the following: (a) investment in a cardiac center of excellence that will include new state of art equipment for which the cardiologists and surgeons at Adams Clinic will have priority rights, (b) development of a new ambulatory surgery center in which qualifying Adams clinic physicians may have an investment interest and (c) restructuring of certain managed care contracts to provide improve reimbursement for certain primary care services and risk pools to reward good performance by the Adams Clinic physicians. As part of its plans, Arcadian plans to add several medical directorships to which Adams Clinic physicians will be appointed and compensated. Adams Clinic s leadership approves the plan, subject to final documentation of the agreements. As part of documenting the proposed deals, Arcadian retains Value R Us, a recognized consulting firm to provide a fair market value analysis of: (a) the proposed surgery center investment interests to be acquired by the Adams Clinic physicians, (b) the proposed managed care contracting arrangements and (c) the compensation rates for the new medical directorships. Issues: 1. Is the entire Arcadian proposal a possible kickback arrangement, motivated by preserving the existing referrals from the Adams Clinic? 2. Since Arcadian is non-profit and tax exempt are there considerations for it which would not affect the Horizon/Mission proposal to Adams Clinic? What about ownership interests in Mission Hospital? 3. Can non-monetary rights granted to the Adams Clinic physicians, such as priority use of equipment be considered an inducement? 4. Can physicians lawfully invest in the surgery center? Can the entire group hold an interest in the center on behalf of all of the Adams Clinic physicians so the non- 13

14 surgeons can get a benefit? What parameters govern the terms of the physician investment and what does the fair market value study have to say? 5. What about negotiations of improved terms in managed care contracts? Assuming that the objective is improved rates for physician services and does not shift money from the hospital is there any risk? What about adjustments to risk pools to reward efficiency and improved quality of care? 6. What are the issues around creation of new medical directorships? Assuming the compensation conforms to market value are there other considerations that limit Arcadian s plans? Hypothetical 2 City Hospital's compliance officer receives an anonymous call on the Hospital's hotline alleging that Dr. Bones has recently not been appropriately documenting medical records, (e.g., lack of signatures, lack of documentation justifying medical necessity for surgeries). He has been employed by the Hospital for over 5 years. Compliance calls outside counsel and, through legal counsel, engages billing/audit company to review Dr. Bones' charts for the last 3 months. The Compliance Officer is informed that legal was also notified of this issue a year ago but the General Counsel told Compliance "she had bigger fish to fry." The audit reveals that for the three month period reviewed, it sets forth that Dr. Bones' charts are a mess - lots of missing physician signatures and lack of physician documentation. They also noted that most of his office visits are coded as 4s or 5s. As Compliance Officer, you have to report on this matter to the Board Compliance Committee tomorrow. The General Counsel will be at that meeting. What is your game plan? 14