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Archive for the ‘Hospital Governance’ Category

Telemedicine Credentialing By Proxy

Tuesday, February 12th, 2013

Telemedicine Credentialing By Proxy and Hospital Policies

telemedicine policies credentialing telehealthProvider Credentialing requirements raise important considerations in any telemedicine arrangement. The facility where care is received, renders a diagnosis, or otherwise provides clinical treatment to a patient, must assure that a telemedicine practitioner is appropriately credentialed and privileged in compliance with their credentialing process, CMS rules, and the requirements of applicable accreditation organizations.  The process for credentialing telemedicine providers should be addressed by the governing body and reflected in medical staff bylaws and formal credentialing policies.

Credentialing standards have been somewhat streamlined since CMS adopted new regulations that were effective in June of 2011.  CMS rules now permit “credentialing by proxy” provided that several conditions are met.  It remains the responsibility of the board to determine when or if it wishes to rely on “credentialing by proxy” or whether it should apply full credentialing requirements on remote providers of telemedicine services.  Even though the process has been simplified, credentialing of providers who perform telemedicine services to patients of a hospital is still an extremely important responsibility of the hospital board.

Responsible Corporate Officers Doctrine – New Focus On Health Care

Tuesday, February 14th, 2012

Responsible Corporate Officer Doctrine – New Focus On Application To Health Care

Recent enforcement actions and public comments by enforcement officials make it clear that parties who are responsible for health care fraud enforcement plan, to focus more on the Responsible Corporate Officer Doctrines (“RCO Doctrine”) as a tool to fight health care fraud.  Comments by Wisconsin Bar Health Law Seminar are just one example of the new focus on the RCO Doctrine.

            The RCO Doctrine was derived from the United States Supreme Court’s decision of U.S. v. Park.  The RCO Doctrine permits corporate officers to be held personally responsible for the criminal acts committed at the corporate level.  The RCO Doctrine is a draconian measure that can hold corporate officers liable as long as they were in a position to prevent a legal violation.  Park permits application of the doctrine even in cases where the corporate officer does not have actual knowledge of, or has not actually participated in, the alleged violation.

            Health care is one area where the RCO Doctrine is being increasingly used as an enforcement tool.  The doctrine is being actively used to pursue corporate officers who are in a position of authority regarding the alleged violation.  Some cases have even upheld the application of the RCO Doctrine against a corporate officer even when the corporation itself is acquitted of the charges.

            The RCO Doctrine can be used against virtually any corporate officer, including the CEO, president, vice president, secretary, treasurer, general counsel or virtually any other management-level functionary.  Health care is particularly susceptible to the use of the RCO Doctrine.  In many cases, enforcement officials do not want to take action that could adversely affect availability of health care services to the community.  This causes officials to focus on individuals in management.  In fact, some officials take the position that where health care fraud occurs, someone must be criminally charged.  This is a growing enforcement trend that makes health care management particularly vulnerable.  In fact, some recent cases have gone so far as to charge legal counsel with criminal violations, raising issues regarding the role of in-house legal counsel in compliance roles.

            The emergence of the RCO Doctrine places a spotlight on the duty of corporate officers to be certain that systems are in place to ensure that legal violations do not occur.  Systems should also focus on promptly remedying compliance concerns before they spin out of control.

            Health care organizations are actively using compliance programs to minimize compliance risk.  These programs should be a continued focus of health care organizations as a method to reduce legal risk.  The programs should be flexible to address areas of risk that apply to the specific organization.  Policy changes, training and actions should be taken where areas of risk are identified.

            The Affordable Care Act creates mandatory compliance program obligations on most health care organizations.  Organizations that receive $5 million or more of Medicaid revenues must adopt most elements of a compliance program.  Nursing homes will need to certify that they have compliance programs in place by 2013, with other provider types following thereafter.  Many institutions have already implemented compliance policies, but should take the opportunity to audit their programs for effectiveness.  Smaller providers such as physician practices will need to adopt compliance programs for the first time in response to the Affordable Care Act.

            A well-designed, effective compliance program may be your best defense to the possible application of the RCO Doctrine, in view of the increased focus on that doctrine by law enforcement.  When it comes to the RCO Doctrine, it is what you do not know that can hurt you.  For this reason, it is critical to develop compliance systems to ferret out possible problems and solve them before they grow into larger problems.

Anti-kickback Statutes Safe Harbor Regulations

Thursday, December 8th, 2011

Anti-kickback Statutes and Safe Harbor Regulations

Medicare Antikickback Statute Safe HarborsOverview: On the books since 1972, the federal anti-kickback law’s main purpose is to protect patients and the federal health care programs from fraud and abuse by curtailing the corrupting influence of money on health care decisions. Straightforward but broad, the law states that anyone who knowingly and willfully receives or pays anything of value to influence the referral of federal health care program business, including Medicare and Medicaid, can be held accountable for a felony. Violations of the law are punishable by up to five years in prison, criminal fines up to $25,000, administrative civil money penalties up to $50,000, and exclusion from participation in federal health care programs.

Because the law is broad on its face, concerns arose among health care providers that some relatively innocuous — and in some cases even beneficial — commercial arrangements are prohibited by the anti-kickback law. Responding to these concerns, Congress in 1987 authorized the Department to issue regulations designating specific “safe harbors” for various payment and business practices that, while potentially prohibited by the law, would not be prosecuted.

Compliance Officer and Legal Counsel Dual Role

Sunday, February 20th, 2011

Health Care Compliance Officer and Legal Counsel Relationships

Should Compliance and Counsel Functions Be Separated?

There is a current debate within the health care industry about the relative roles of the Chief Compliance Officer (CCO) and Legal Counsel.  More specifically, questions are raised regarding whether the Legal Counsel should serve the dual role of legal counsel and compliance officer and whether the primary compliance officer can report through legal counsel.  There are arguments on both sides.  This is an extremely important issue to many organizations.  As such, I will be devoting several articles to the various aspects of this issue over the next several weeks.

In all but the very smallest organizations that clearly cannot absorb the cost of two separate functions, it presents increased compliance risk to the organization for the legal counsel to also be the prime individual responsible for compliance within the organization.

Dividing the compliance and legal counsel functions is clearly the “best practice” when it comes to organizational compliance. This conclusion is supported by comments from the Office of Inspector General (OIG), a consistent reading the the Federal Sentencing Guidelines (FSG), the position taken by the government in Corporate Integrity Agreement fraud and abuse settlements, and by the general ethical standards that apply to the general counsel.

The case for dividing the functions of legal counsel and compliance officer and creating a separate Compliance Office with direct line of authority to the Board or a Committee of the Board is quite compelling.  In fact, many organizations who had previously run the compliance role through the office of general counsel are now reviewing that practice and are making changes to their organizational structure and compliance plans.

A study done by the American Health Lawyers Associations and the Office of Inspector General in 2004 found that at that time, only 20% of the health care organizations that were polled had their compliance function under the authority of the Legal Counsel’s office.  It is safe to say that in view of more recent pronouncements by the OIG and by comments made in the Compliance Guidance for Hospitals that was released in 2005, the percentage of “dual role” organizations is now less than that figure.

The first source to be examined when defining the role of the compliance officer within an organization is the Federal Sentencing Guidelines.  The FSG do not specifically mention a compliance officer per se, but require that the compliance and ethics program be assigned to “high-level” personel.  When organizations first began creating compliance programs in response to the Federal Sentencing Guidelines, oftentimes the responsibility was assigned to the legal counsel.  This seemed to be a natural outgrowth of the function of the office of legal counsel.  In that regard, it made organizational sense because the office of legal counsel had resources and personnel in place to implement the compliance program without creating an entire new organizational division.

Over time, the assignment of compliance functions to the legal counsel began to raise questions.  Concerns were raised as to whether the legal counsel was in fact a “high level” personnel.  Additionally, questions were raised as to the degree that giving the legal counsel the dual role of compliance officer and legal counsel sufficiently conveyed the appearance of the importance that the organization placed on compliance.  As a result, some lawyers and compliance experts began to question whether creating a “dual role” compliance officer put the organization at risk of not receiving the benefits afforded under the Federal Sentencing Guidelines if the organization was ever in a position to need these benefits.

The Office of Inspector General has made its position clear that legal counsel should not exercise a dual role.  An examination of many of the recent Corporate Integrity Agreements that have been entered between providers and the OIG clearly demonstrate the OIG’s position on this matter.  Most CIAs outline the role and position of the compliance officer in the organization.  The standard language being used by the OIG is as follows:

“The Compliance Officer shall be a member of senior management of [Provider], shall make periodic (at least quarterly) reports regarding compliance matters directly to the Board of Directors of [Provider], and shall be authorized to report on such matters to the Board of Directors at any time.  The Compliance Officer shall not be or be subordinate to the General Counsel or Chief Financial Officer. [Emphasis Added]

Although the Sentencing Guidelines do not affirmatively address dual role situations, Commentary to the Sentencing Guidelines state that “applicable industry practice or the standards called for by any applicable governmental regulations” are factors to be considered.  Failure to follow these standards “weighs against a finding of an effective compliance and ethics program.”

At the same time, both the Sentencing Guidelines and the OIG Compliance Guidance recognize that the size of the organizations a factor in judging the level of compliance.  This recognizes that in cases where the organization is small and fewer resources are available, the organization can meet its obligations without necessarily creating a structure that separates the roles between the legal counsel and the compliance office.  However, there is no precise definition as to whether an organization is a “small organization” that can fulfill its compliance functions in less formal ways or a “large organization” which will be expected to devote suitable resources to create a completely separate compliance function.

This uncertainty leave an organization’s board of directors without precise guidance concerning an appropriate structure given the size and nature of its organization.  At the same time, best practices, given available resources, is to separate the compliance and legal counsel functions.  The potential consequences of failing to use an appropriate structure for the size of the organization is increased penalties in the event of an event of organizational criminal misconduct; so the consequences can be quite serious.

John H. Fisher

Health Care Counsel
Ruder Ware, L.L.S.C.
500 First Street, Suite 8000
P.O. Box 8050
Wausau, WI 54402-8050

Tel 715.845.4336
Fax 715.845.2718

Ruder Ware is a member of Meritas Law Firms Worldwide

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