The False Claims Act: Hospital Strategies to Avoid Business Ending Fines

Transcription

1 The False Claims Act: Hospital Strategies to Avoid Business Ending Fines Past, Present and Future Impacts of the Law, Related Laws and Regulations SLIDE 1

2 Your Presenter Timothy Powell, CPA has over 30 years of reimbursement experience including working with the Big 4. His clients include McKesson Healthcare, PriceWaterhouseCoopers LLC. and Humana. Timothy Powell, CPA Moore Stephens Lovelace, PA (305) Extension 6630 SLIDE 2

3 Disclaimer Panacea has prepared this seminar using official Centers for Medicare and Medicaid Services (CMS) documents and other pertinent regulatory and industry resources. It is designed to provide accurate and authoritative information on the subject matter. Every reasonable effort has been made to ensure its accuracy. Nevertheless, the ultimate responsibility for correct use of the coding system and the publication lies with the user. Panacea, its employees, agents and staff make no representation, warranty or guarantee that this information is error-free or that the use of this material will prevent differences of opinion or disputes with payers. The company will bear no responsibility or liability for the results or consequences of the use of this material. The publication is provided as is without warranty of any kind, either expressed or implied, including, but not limited to, implied warranties or merchantability and fitness for a particular purpose. The information presented is based on the experience and interpretation of the publisher. Though all of the information has been carefully researched and checked for accuracy and completeness, the publisher does not accept any responsibility or liability with regard to errors, omissions, misuse or misinterpretation. Current Procedural Terminology (CPT ) is copyright 2011 American Medical Association. All Rights Reserved. No fee schedules, basic units, relative values, or related listings are included in CPT. The AMA assumes no liability for the data contained herein. Applicable FARS/DFARS restrictions apply to government use. CPT is a trademark of the American Medical Association. Copyright 2012 by Panacea. All rights reserved. No part of this presentation may be reproduced in any form whatsoever without written permission from the publisher Published by Panacea, 287 East Sixth Street, Suite 400, St. Paul, MN SLIDE 3

4 Regulation and Risk The False Claims Act State False Claims Laws Recovery Audit Contractors Zone Program Integrity Contractors SLIDE 4

5 The False Claims Act Signed in 1863 as a response to civil war profiteering. Allowed private citizens to file suit on behalf of the government. SLIDE 5

6 The False Claims Act Knowingly presenting, or causing to be presented a false claim for payment or approval. Knowingly making, using, or causing to be made or used, a false record or statement material to a false or fraudulent claim. Conspiring to commit any violation of the False Claims Act. SLIDE 6

7 The False Claims Act-1986 Changes Eliminated "government possession of information" bar against qui tam lawsuits. Expanded liability for "deliberate ignorance" and "reckless disregard" of the truth. Imposed treble damages and civil fines of $5,000 to $10,000 per false claim. Increased rewards for qui tam plaintiffs of between percent of the funds recovered from the defendant. Required defendant payment of the successful plaintiff's expenses and attorney's fees, and grants employment protection for whistleblowers including reinstatement with seniority status, special damages, and double back pay. SLIDE 7

8 The False Claims Act-2009 Changes Eliminated the presentment requirement. Redefined "claim" under the FCA to mean "any request or demand, whether under a contract or otherwise for money or property and whether or not the United States has title to the money or property" that is: (1) presented directly to the United States, or (2) "to a contractor, grantee, or other recipient, if the money or property is to be spent or used on the Government's behalf Amended the FCA's intent requirement, now requiring only that a false statement be "material to" a false claim. SLIDE 8

9 The False Claims Act-2010 Changes Changed to the Public Disclosure Bar. Dropped Original Source Requirement. Made Retention of Overpayments a Violation. Added Statutory Anti-Kickback Liability. SLIDE 9

10 The False Claims Act-Major Cases Essentially all Major Cases are Healthcare. University of Pennsylvania, 1995 $ 30 Million (The Gun Shot ). Hospital Corporation of America, 2003 $ 1.3 Billion. TAP Pharmaceuticals Products, 2001 $ 560 Million. Fresenius, 2000 $ 380 Million. Blue Cross Blue Shield Illinois, 1998 $144 Million. SLIDE 10

11 The False Claims Act-Major Cases DaVita Dialysis and the False Claims Act: Accused of billing for unused doses of Epogen (Yes Lance Armstrong s drug). Settled Texas suit for $ 55 Million. Dr. Alon Vainer, a medical director at dialysis clinics in Georgia, files whistleblower suit seeking $ 800 Million in November SLIDE 11

12 State False Claims Most States False Claims Mirror the FCA. The OIG Pay 10 Percent Incentive to qualified state plans. The OIG has reviewed state plans in 25 of 50 states. SLIDE 12

13 False Claims Act-Penalties Example Sample facts: A large Medicaid HMO has submitted billings to Florida Medicaid. The HMO is required to return premiums paid by the state if the medical spending is less than 80 percent of the premium paid. The HMO pads the expenses with non medical expenses to avoid repaying $ 40 million dollars in excess premium. The members reported total 30,000. Without FCA Excess Premium $ 40,000,000 Penalty $ 40,000,000 Total Penalty $ 80,000,000 With FCA Reported Claims 30,000 Per Claim Penalty 10,000 Total Penalty $ 300,000,000 SLIDE 13

14 Revenue Audit Contractors (RAC) Created through the Medicare Modernization Act of Divides the country into 4 districts. Competitive bids for RAC vendors. RAC s paid on an incentive basis. SLIDE 14

15 RAC-Statement of Work The Recovery Audit Program s mission is to reduce Medicare improper payments through the efficient detection and collection of overpayments, the identification of underpayments and the implementation of actions that will prevent future improper payments. SLIDE 15

16 Revenue Audit Contractors-Changes Expanded to Medicaid effective January 1, Expanded to Medicare Advantage effective January 1, SLIDE 16

17 Revenue Audit Contractors-Medicare Advantage Section 6411(b) of ACA expands the use of RACs to all of Medicare (Title XVIII) amending the existing FFS RAC statute at section 1893(h) of the Act. The amendments to 1893(h) of the Act provide us with general authority to enter into contracts with RACs to identify overpayments and underpayments and recoup overpayments in Medicare Part C and Part D. In addition to the identification of underpayments and overpayments and the recoupment of overpayments, section 6411 of ACA also establishes special rules for Part C and Part D that require RACs to Ensure that each MA plan and Part D plan has anti-fraud plans in place and to review the effectiveness of the anti-fraud plans; SLIDE 17

18 RAC AND MEDICAID Federal Register / Vol. 76, No. 180 / Friday, September 16, 2011 / Rules and Regulations Effective Date: These regulations are effective on January 1, Medicaid RACs will contract with states and territories to identify and collect overpayments, and will be paid on a contingency fee basis by the States. SLIDE 18

19 Zone Program Integrity Contractors On December 8, 2003, the Medicare Modernization Act (MMA) was signed into law. Section 911 of the MMA directed implementation of Medicare Fee-For-Service Contracting Reform. This required CMS to use competitive procedures to replace its current FIs and carriers with a uniform type of administrative entity, referred to as Medicare Administrative Contractors (MACs). As a result of these changes, seven program integrity zones were created based on the newly-established MAC jurisdictions. New entities entitled Zone Program Integrity Contractors (ZPICs) were created to perform program integrity functions in these zones for Medicare Parts A, B, Durable Medical Equipment Prosthetics, Orthotics, and Supplies, Home Health and Hospice and Medicare- Medicaid data matching. SLIDE 19

20 Zone Program Integrity Contractors SLIDE 20

21 Zone Program Integrity Contractors According to the Medicare Fee-For-Service 2010 Improper Payment Report: The Centers for Medicare & Medicaid Services (CMS) has identified the Medicare Fee-for- Service (FFS) program as a program at risk for significant erroneous payments. In 2010, the Medicare FFS paid claims error rate was 10.5 percent, or $34.3 billion in improper payments. SLIDE 21

22 ZPIC Targets Community Mental Health Centers. Comprehensive Outpatient Rehabilitation Facilities. Hospice organizations. Independent diagnostic and clinical laboratories. Private ambulance services suppliers. Home Health Agencies. Durable Medical Equipment suppliers. Skilled Nursing Facilities. SLIDE 22

23 ZPIC Source of Targets Unusual trends or changes in utilization over time Specific schemes noted by CMS that inappropriately maximize generated reimbursement. Referrals from law enforcement and other sources for possible fraud and abuse. High volume or high cost services that are being widely over-utilized. SLIDE 23

24 What Can I do to Reduce Risk? Implement a strong compliance plan. Regularly check compliance websites for news and hot issues: SLIDE 24

25 Elements of a Compliance Plan Reasonably capable of reducing fraud. Supervised by high level staff. Verified employees are not risks. Communicated to employees. Implemented monitoring and systems. Enforced disciplinary actions under the plan. Prevent further occurrences. Regularly updated and tested. SLIDE 25

26 THANK YOU FOR ATTENDING SLIDE 26

27 CONTACT INFORMATION Timothy Powell, CPA Moore Stephens Lovelace (305) SLIDE 27