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Archive for the ‘Self-Disclosure’ Category

Investment Interest in Radiation Therapy Anti-kickback Statute Settlement

Sunday, May 20th, 2018

Radiation Therapy Referral Kickback Arrangements with Investors.

Anti-kickback Statute Radiation Therapy InvestmentsA national operator of radiation therapy centers, has agreed to settle a False Claims Act action alleging that it submitted claims violated the Anti‑Kickback Statute by paying of $11.5 million and entering into a 5 year Corporate Integrity Agreement with the Office of Inspector General.  The arrangement involved payments to investors who were allegedly targeted because of their referral potential to the therapy centers.  The challenged arrangement involved a series of leasing companies that accepted investments from referring physicians.  The investment interests resulted in the payment of investment returns that the government considered to be remuneration for referrals in violation of the Anti-Kickback Statute.  The whistleblower who originally raised the issue will receive up to $1.725 million.

This case involves a garden variety claim of a kickback by investment interest.  The typical investment case involves targeting potential investors who are in a professional position to make referrals to the company in which they are asked to invest.  The referral source has a financial incentive to increase referrals.  This might be an excellent financial investment scenario, but the problem is that the investment return might well be an illegal kickback; which is potentially a federal felony.

Unnecessary Inpatient Admissions Results in Hospital DOJ Settlement

Thursday, May 17th, 2018

Unnecessary Inpatient Admissions – Hospital Fraud Settlement.

Hospital Admissions Fraud Risk AreaAn $18 million settlement was agreed by a hospital chain after allegations that claims were submitted to Medicare for patients who were admitted to an inpatient facility when they allegedly could have been treated on a less costly outpatient basis.  The government alleged that the hospital system billed Medicare for short-stay, inpatient procedures that should have been billed on a less costly outpatient basis.  The government also accused the hospital system of inflating reports to Medicare regarding the number of hours of outpatient observation care that was provided.

This is a fairly typical case where the allegation involved billing for services that were of a higher level than required by the patient.  In effect, the excess services are deemed to be medically unnecessary.  In this case, the services involved inpatient admissions that the government alleged could have been taken care of in a less costly outpatient setting.

A former employee was the whistleblower in the case and walks away with over $3.25 million from the settlement.

Whistleblower Settlements Increase Compliance Risk for Providers

Wednesday, May 16th, 2018

Recent Fraud Settlements Emphasize Risk of Whisttleblowers

Dermatology Risk Areas Fraud and AbuseOne of the reasons why compliance officers and health care attorneys read fraud settlements is to identify the issues that the government is focused on.  The cases that the government decides to pursue are very indicative of the areas of fraud enforcement that they feel are important.  These are not the only issues that should be considered, but government enforcement actions certainly tell us what types of arrangements the government considers important.

The misfortune of the defendants involved in these cases hold a potential learning experience for everyone else.  Others have an opportunity to focus on their own operations to identify whether they are at risk in any of the areas involved in these cases.

An ancillary lesson that these settlements hold is that each was initially raised by a whistleblower.  The False Claims Act gives whistleblowers a portion of the settlement in cases where the government decides to intervene.  This in effect creates a universe of potential claimants that can include almost anyone with original knowledge of the alleged practice.

Common whistleblowers include former or disgruntled employees.  It really does not matter of the employee is or was the worst employee in the world, they can still bring an action as a whistleblower.  Not only are they protected by a host of laws, they can also profit greatly if the claim is eventually decided in their favor.  Whistleblowers often receive awards in the millions of dollars.  This makes the area ripe for plaintiff’s attorneys who often take these cases on a contingency fee basis.  This makes it a relatively low-cost proposition for a whistleblower to bring a case forward, at least from the perspective of attorney fees.

Opioid Prescribing Results in Medicare Fraud Claim

Tuesday, May 15th, 2018

Overprescribing Opioids Without Demonstrated Medical Justification.

A settlement was recently announced by the Department of Justice that symbolizes another use of fraud enforcement by the government to combat the opioid epidemic.  Providers need to take notice of these enforcement actions as they indicate opioid related issues as significant compliance risk areas.

The government alleged that a chiropractor billed Medicare and a state Medicaid program improperly for painkillers, including Opioids. The case involved four managed pain clinics, all which were closed through the course of the case.  The settlement also required a nurse practitioner to pay $32,000 and surrender her DEA registration to settle allegations that she violated the Controlled Substances Act.

The Department of Justice issued a press release announcing the settlement that directly comments on the opioid issues involved in the case, leaving no ambiguity about what the government is up to.  The quotations are not part of the normal “canned” statements that are normally included in these settlements.  Every indication is that the opioid related language might be adopted a standard form as the government focuses in on these cases.

“More Americans are dying because of drugs today than ever before—a trend that is being driven by opioids,” said Attorney General Jeff Sessions. “If we’re going to end this unprecedented drug crisis, which is claiming the lives of 64,000 Americans each year, doctors must stop overprescribing opioids and law enforcement must aggressively pursue those medical professionals who act in their own financial interests, at the expense of their patients’ best interests.”

The government alleged that the defendants prescribed painkillers and caused pharmacy claims to be submitted where there was no legitimate medical purpose for the prescriptions.  Additionally, the government alleged that the clinics up-coded and billed Medicare for office visits that were not reimbursable at the levels sought.  In a demonstration of the commitment that the government has in this area, the clinics were also accused of billing for nurse practitioner services that were provided without the required collaboration arrangement in place.

The case was initially brought forward by a former office manager turned whistleblower who is set to earn $246,500 under the settlement.

Health Care Compliance Resource Portal Launched by OIG

Tuesday, May 1st, 2018

Office Inspector General Launches New Compliance Resource Portal

by John H. Fisher, II, JD, CHC, CCEP

At a recent Health Care Compliance Association (HCCA) compliance institute, the Office of Inspector General announced it had launched a new resource portal focused on compliance issues.  A trip to the OIG’s web site, and sure enough, there is a brand spankin’ new compliance portal.  You can check out the portal at OIG Portal.

On first brush through the portal, it appears most of the items that are accessible already existed prior to the launch of the portal.  The portal creates some organization that did not previously exist to guide providers to various compliance resources the OIG has made available.

 

Contents  Listing of the OIG Compliance Portal

  • Toolkits
  • Provider Compliance Resource and Training
  • Advisory opinions
  • Voluntary Compliance and Exclusions Resources
  • Special Fraud Alerts, Other Guidance, and Safe Harbors
  • Resources for Health Care Boards
  • Resources for Physicians
  • Accountable Care Organizations

This is a site that compliance officers will want to have bookmarked in their browser.  We are likely to see new developments in compliance posted on the portal.  For example, it already references a toolkit on identification of opioid misuse risk will be coming soon to the portal.

When you get a chance, check out the new OIG resource and the tools that are available on the site.  It is definitely something with which people in compliance should have familiarity.  As usual, if you have any questions regarding compliance or other health care legal issues, please don’t hesitate to contact your Ruder Ware health care attorney.

Health Law Firm Opens Green Bay Office

Tuesday, May 1st, 2018

Green Bay Health Care Lawyer – Opening Office in Green Bay Wisconsin

I just wanted to let readers of our health care blog know that Ruder Ware will be opening a Green Bay office and that three Green Bay attorneys will be joining our firm. This will provide us with a presence in the Green Bay/Appleton Markets that will enhance our community presence and enable us to better serve our client in eastern Wisconsin. Our health care and compliance practice with be greatly enhanced as a result of this move.

This move will provide a local platform through which we can better serve our health care clients.

Health Care Law Practice – Green Bay Health Lawyers Ruder Ware

Ruder Ware has a long history of representing health care clients.  The firm recognizes that the highly regulated and complex nature of the industry demands the attention of a team of attorneys who, as a group, monitor constantly evolving laws and regulations and their impact on our health care clients.  At Ruder Ware, we offer a full-service solution to clients as our focus team consists of health care, business, employment, and litigation attorneys with knowledge of the health care industry.   As a result, we are able to take best practices from other industries and apply them to the health care industry, thereby increasing the ability to respond promptly to the rapidly changing health care environment.

Members of the focus team have served on the governing bodies of various health care organizations.  This service has provided our attorneys with the opportunity to counsel the health care community.  

Our dedicated team of attorneys represents health care providers in various matters including:

 Health Care Business Transactions and Corporate Law

Our attorneys have substantial expertise representing various health care providers such as:

Below is the official press release:

Media Contact:
Jamie Schaefer
COO
Ruder Ware, L.L.S.C.
P: 715.845.4336
E: jschaefer@ruderware.com

For Immediate Release

Attorneys Ronald Metzler, Christopher Pahl, and Chad Levanetz to join
Ruder Ware at its new Green Bay Office

WAUSAU, WI – April 27, 2018 – Ruder Ware is pleased to announce the opening of its Green Bay office and that Attorneys Ronald Metzler, Christopher Pahl, and Chad Levanetz will be joining the firm. The new office will be located at 222 Cherry Street, Green Bay, Wisconsin, which is the current location of Metzler, Timm, Treleven, S.C.

Attorney Ron Metzler – Having practiced law for over 30 years, Ron is a well-respected and well-known commercial attorney with close ties to the banking industry.

Attorney Chris Pahl – With his strong ties to the Green Bay community, Chris has built his practice around real estate development and condominium law as well as commercial transactions and estate planning.

Attorney Chad Levanetz – A seasoned litigation attorney, Chad counsels clients in the areas of real estate, construction, and general business disputes.

Stew Etten, Ruder Ware managing partner, stated, “Ruder Ware is always looking for outstanding attorneys to join our firm. With the opportunity to add Attorneys Metzler, Pahl, and Levanetz, the time was right to open a Green Bay office. We’re very excited to have attorneys of their caliber join our team of professionals.”

About Ruder Ware
Founded in 1920, Ruder Ware is the largest law firm headquartered north of Madison. With offices in Wausau, Eau Claire, and Green Bay over 40 attorneys provide legal and business advice to clients with operations of all sizes. Areas of practice include: Employment, Benefits & Labor Relations, Litigation & Dispute Resolution, Business Transactions, Trusts & Estates, and Fiduciary Services. Ruder Ware, Business Attorneys for Business Success. www.ruderware.com

Media Contact:
Jamie Schaefer
COO
Ruder Ware, L.L.S.C.
P: 715.845.4336
E: jschaefer@ruderware.com

Health Care Leads in Fraud Recoveries in 2017

Thursday, December 28th, 2017

fraud recovery doj report 2017Health Care Leads With $2.4 Billion Fraud Recoveries in 2017

The United States Department of Justice recently released a summary of recoveries from False Claims Act cases for Fiscal Year 2017.  The report, which was released in late December 2017, indicates that the DOJ recovered over $3.7 billion in settlements and judgments from civil cases involving fraud and false claims during 2017.

One thing is evident when examining the report.  The lion’s share of recoveries come from the health care industry.  Almost $2.5 billion of the $3.7 billion in total recoveries involved health care providers and others in the health care industry.  This is not a new trend.  Health care has led in recoveries with over $2 billion per year for the past 8 years in a row.

The department’s health care fraud program is intended to restore assets to federally funded programs, such as Medicare, Medicaid, and TRICARE.  By all reports, health care fraud and abuse recovery is big business for the Federal government.  The details vary, but reports indicate that the government receives between seven and ten times return on every dollar it spends on pursuing health care fraud and abuse cases.  Recent revisions to Federal False Claims Act penalties increased the maximum penalty per claim from $11,000 to $22,000.  This increase is likely to result in even more aggressive enforcement and an even higher percentage return on the government’s investment in this area.

The high potential financial exposure is intended to deter others from committing health care fraud.  Additionally, the high potential exposure provides an incentive for providers to put in place proactive compliance programs to help identify errors and instances of noncompliance that could eventually result in unmanageable penalties if allowed to emerge through discovery by government audits or a whistleblower complaint.  It is generally much preferable for a provider to discover and correct a problem on its own initiative rather than exposing itself to draconian penalties.

Exercising Reasonable Care to Identify and Address Potential Overpayments

Monday, July 17th, 2017

When the Center for Medicare and Medicaid Services (CMS) finally issued final regulations under the 60-day repayment rule, it implemented a new standards that requires a provider to affirmatively exercise reasonable diligence to identify potential overpayments.  This was a change from the proposed regulations that held providers to a much lower affirmative duty to exercise diligence to find potential overpayments.  Now, when a provider receives “credible information” that indicates a potential overpayment, affirmative steps must be taken in a timely and good faith manner to investigate.  Failure to meet the standard of reasonable diligence can result in significant penalties under the False Claims Act.  In some cases criminal liability can attach as well; particularly when evidence strongly indicates a problem might exist and a deliberate decision is made not to investigate or repay amount due.

By now most health care providers are at least generally aware of the 60-day repayment rule.  That rule originated as part of the Affordable Care Act in 2010.  The rule provides that the failure to repay a known overpayment within 60 days after discovery results in potential penalties under the False Claims Act.  This means that a simple overpayment is multiplied by a factor of three.  Additionally, penalties can be assessed in amounts ranging from a minimum of $11,000 and a maximum of approximately $22,000 per claim.  Financial exposure under the FCA can be very substantial; particularly when there is a systematic billing error that impacts a large number of claims over a significant period of time.  The lookback period for imputed False Claims is 6 years, which amplifies the potential exposure when the “tip of the iceberg” is discovered in a current year audit.

The initial statutory provision left some ambiguity regarding application of the 60 day repayment rule.  One significant ambiguity related to when the 60 day time period begins to run.  The statute states that the 60 day period commences upon “identification” of the overpayment but included no clarification of when a provider is deemed to have identified an overpayment.  It was not clear whether identification occurred when there was an allegation that an overpayment exists, when an amount of overpayment was calculated, when the existence of the overpayment was verified, or at some other time.  It was also unclear whether actual knowledge of an overpayment was required or whether knowledge could be imputed in certain circumstances.

CMS provided clarification on the issue of identification in the final regulations, but the clarification places significant burdens on providers.  Under the final rules, the provider is deemed to have identified an overpayment, not when actual knowledge is obtained, but rather when the provider “should have” identified the overpayment through the exercise of “reasonable diligence.”  The new standard requires providers to conduct a timely and good faith investigation when it receives credible information that an overpayment might exist.  Failing to take reasonable steps to investigate will result in imputed knowledge and deemed “identification” of the overpayment.  In other-words, the 60 day clock starts to run when the investigation should have commenced.

It is useful at this point to mention what constitutes and overpayment that invokes the statutory requirement.  An overpayment exists when the provider receives any funds to which they are not entitled.  There is no amount threshold, substantiality or materiality requirement.  Any overpayment invokes the statute and becomes a potential false claim if not repaid within the 60 day period.  There are situations where the amount of overpayment is so small that the provider might determine it not to be worth the resources to identify, quantify and repay.  When making this determination, it should be kept in mind that the False Claims Act will apply if a whistleblower case is brought or a government investigation is commenced and finds the overpayment.  False Claims Act liability can result in large penalties; particularly where there are multiple claims involved.  It should also be kept in mind that criminal statutes impose felony penalties for the willful failure to return known overpayments.

Overpayments that are self-discovered and repaid before they become false claims are relatively easy to manage.  Once the False Claims Act potentially attaches, these situations become increasingly complicated to manage.  The OIG Self Disclosure process should be considered where the potential for significant penalties is present.  The SDP permits resolution at a minimum of 1.5 times the amount of the overpayment.  Full disclosure of the facts and investigation is required as part of the self-disclosure process.  Only civil penalties are subject to settlement under the protocol.  The wrong facts disclosed as part of the SDP process can lead to criminal charges against the entity or individuals.  Criminal charges cannot be settled using the SDP.

Where amounts are smaller, a provider may decide to repay without going through the protocol process.  A determination of which option is right in the specific situation should be made with the involvement of legal counsel that has experience with these issues.

Proper operation of a compliance program is the best defense to mitigating exposure under the 60 day rule.  Prompt investigation should be conducted whenever there is a credible allegation of an overpayment.  Compliance risk identification and proactive auditing can also help mitigate risk be identifying problems early and by demonstrating that compliance process is being effectively operated.  This will help avoid allegations that overpayments should have been discovered sooner through the exercise of a reasonable compliance program.  Most importantly, ignoring alleged overpayments is never an answer that mitigates risk.  All credible allegations must be investigated and appropriate repayment should be made using one of the available methods.  The requirements of the final rule should be baked into compliance program policies and procedures and staff should be educated on the need to investigate and return overpayments within required timeframes.

Using the Self Disclosure Protocols to Minimize Risk

Tuesday, June 27th, 2017

When to Use the OIG’s Self Disclosure Protocols

Self Disclosure Mitigate RiskThe HHS Office of Inspector General offers providers an opportunity to self-disclose certain violations in exchange for avoiding some of the more draconian penalties that may otherwise apply under applicable regulations.  Even though the OIG’s Provider Self-Disclosure Protocols (“SDP”) can be very compelling, the decision whether to utilize the OIG’s self-disclosure protocols is often very difficult.

To begin, the SDP is not available in all situations.  The SDP is limited to situations that potentially violate Federal criminal, civil, and administrative laws for which Civil Monetary Penalties are authorized.  The SDP requires the disclosing party to Continue

Credible Information Indicating Overpayment – Duty to Investigate

Tuesday, June 27th, 2017

Addressing Potential Over-payment Situations – Exercising Reasonable Care

known overpayment credible informationThe new final regulations under the 60-day repayment rule, require providers to affirmatively exercise reasonable diligence to identify potential overpayment situations. The obligations to further investigate is triggered when a provider receives “credible information” that indicates a potential overpayment.  Affirmative steps must be taken in a timely and good faith manner to investigate the situation further. Failing to use reasonable diligence can result in significant penalties under the False Claims Act (FCA). In some cases criminal liability can attach as well; particularly when evidence strongly indicates a problem might exist and a deliberate decision is made not to investigate or repay an amount due.

By now most health care providers are at least generally aware of the 60-day repayment rule. That rule originated as part of the Affordable Care Act in 2010. The rule provides that the failure to repay a known overpayment within 60 days after discovery results in potential penalties under the FCA. This means a simple overpayment is multiplied by a factor of three. Additionally, penalties can be assessed in amounts ranging from a minimum of $11,000 and a maximum of approximately $22,000 per claim. Financial exposure under the FCA can be very substantial; particularly when there is a systematic billing error that impacts a large number of claims over a significant period of time. The lookback period for imputed False Claims is 6 years, which amplifies the potential exposure when the “tip of the iceberg” is discovered in a current year audit.

The initial statutory provision left some ambiguity regarding application of the 60-day repayment rule. One significant ambiguity relates to when the 60-day time period begins to run. The statute states the 60-day period commences upon “identification” of the overpayment but included no clarification of when a provider is deemed to have identified the existence of an overpayment. It was not clear whether identification occurred when there was an allegation that an overpayment exists, when an amount of overpayment was calculated, when the existence of the overpayment was verified, or at some other time. It was also unclear whether actual knowledge of an overpayment was required or whether knowledge could be imputed in certain circumstances.

CMS provided clarification on the issue of identification in the final regulations, but the clarification places significant burdens on providers. Under the final rules, the provider is deemed to have identified an overpayment not when actual knowledge is obtained, but rather when the provider “should have” identified the overpayment through the exercise of “reasonable diligence.” The new standard requires providers to conduct a timely and good faith investigation when it receives credible information an overpayment might exist. Failing to take reasonable steps to investigate will result in imputed knowledge and deemed “identification” of the overpayment. In other words, the 60-day clock starts to run when the investigation should have commenced.

It is useful at this point to mention what constitutes an overpayment that invokes the statutory requirement. An overpayment exists when the provider receives any funds to which they are not entitled. There is no requirement of an amount threshold, substantiality, or materiality. Any overpayment invokes the statute and becomes a potential false claim if not repaid within the 60-day period. There are situations where the amount of overpayment is so small that the provider might determine it not worth the resources to identify, quantify and repay. When making this determination, it should be kept in mind the FCA will apply if a whistleblower case is brought or a government investigation is commenced and finds the overpayment. FCA liability can result in large penalties; particularly where there are multiple claims involved. It should also be kept in mind that criminal statutes impose felony penalties for the willful failure to return known overpayments.

Overpayments that are self-discovered and repaid before they become false claims are relatively easy to manage. Once the FCA potentially attaches, these situations become increasingly complicated to manage. The OIG Self Disclosure process should be considered where potential for significant penalties is present. The Self Disclosure Protocols permit resolution at a minimum of 1.5 times the amount of the overpayment. Full disclosure of the facts and investigation is required as part of the self-disclosure process. Only civil penalties are subject to settlement under the protocol. The wrong facts disclosed as part of the SDP process can lead to criminal charges against the entity or individuals. Criminal charges cannot be settled using the SDP.

Where amounts are smaller, a provider may decide to repay without going through the protocol process. A determination of which option is right in the specific situation should be made with the involvement of legal counsel that has experience with these issues.

Proper operation of a compliance program is the best defense to mitigating exposure under the 60-day rule. Prompt investigation should be conducted whenever there is a credible allegation of an overpayment. Compliance risk identification and proactive auditing can also help mitigate risk by identifying problems early and by demonstrating the compliance process is being effectively operated. This will help avoid allegations that overpayments should have been discovered sooner through the exercise of a reasonable compliance program. Most importantly, ignoring alleged overpayments is never an answer that mitigates risk. All credible allegations must be investigated and appropriate repayment should be made using one of the available methods. The requirements of the final rule should be baked into compliance program policies and procedures and staff should be educated on the need to investigate and return overpayments within required timeframes.

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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The Health Care Law Blog is made available by Ruder Ware for educational purposes and to provide a general understanding of some of the legal issues relating to the health care industry. This site does not provide specific legal advice and you should not use the information contained on this site to address your specific situation without consulting with legal counsel that is well versed in health care law and regulation. By using the Health Care Law Blog site you understand that there is no attorney client relationship between you and Ruder Ware or any individual attorney. Postings on this site do not represent the views of our clients. This site links to other information resources on the Internet; these sites are not endorsed or supported by Ruder Ware, and Ruder Ware does not vouch for the accuracy or reliability of any information provided therein. For further information regarding the articles on this blog, contact Ruder Ware through our primary website.