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Posts Tagged ‘Fraud and Abuse’

Medigap PHO Discount Program Receives OIG Approval

Tuesday, June 23rd, 2015

OIG Releases Yet Another Advisory Opinion 15-08

Medigap Arrangment Involving PHO Discounts

Medigap PHO Discount ProgramSomeone must be busy at the Office of Inspector General’s Office. Last week they released two new advisory opinions and a Special Fraud Alert. This week they released another Advisory Opinion, this time addressing sharing savings from a preferred hospital network between a Medigap insurer and its policy beneficiaries. The program at issue provided a premium credit of $100 toward the policyholder’s next renewal premium for participating in a discount program involving price reductions from a physician-hospital organization.

The second part of the program involved negotiated service rates with a physician-hospital organization (PHO). The PHO agreed to discounts of up to 100% of the Medicare Part A inpatient deductibles which would normally be paid by the Medigap plan. The PHO received an administrative fee from the Medigap plan for each discount that was provided by the PHO.

The OIG analysed the program under the civil monetary penalty (CMP) provisions and the Anti-Kickback Statute (AKS) and concluded that the arrangement would not constitute grounds for civil monetary penalties or administrative sanctions.

The OIG found that discounting of the inpatient deductible created a low risk of fraud or abuse because the Medicare Part A payments are fixed and the discount would not impact reimbursement amounts. Additionally, the OIG observed that patients would not generally haveknowledge of the discount and would not be encouraged to seek additional care. The program did not offerfinancial rewards to the physicians involved in the patient’s care and the program was open to all providers who agreed to the discount program through participation in the PHO.
The OIG also found that the premium credits that were provided to beneficiaries created minimal risk of program abuse.

The OIG also noted that the proposed arrangement has the potential of lowering costs for policyholder under the Medigap plan and that the savings would be reported to the state regulatory agency.

Wednesday, April 2nd, 2014

From HCCA Compliance Institute – False Claims Act Developments

I am in the morning session of HCCA Compliance Institute covering False Claims Act issues.  Some interesting items being covered.  I will summarize a few of the major points being made and will provide some additional analysis and observations on some of these points.  Forgive my typos or poor writing.  I am blogging live from within the session on my handheld device.

  • This discussion is in the context of the False Claims Act and determining whether there is an obligation to self disclose or take other remedial action.  The following points are made:
  • Ambiguities in the law will be identified that cast doubt on whether or not a violation exists.  A provider cannot bury its head in the sand.  If relying on a legal interpretation on whether and overpayment or self disclosure should take place, make certain to document the process you took to make a reasonable determination on how a law applies.  Reasonable efforts should be documented to indicate that a reasonable assessment was made and a reasonable determination was made concerning interpretation.
  • I always advise providers to completely document their investigation of issues regarding application of specific laws.  The process taken should be documented to memorialize that a reasonable decision was made concerning potential legal application.
  • Reasonable steps should be taken to reach an answer.  If guidance is sought from an FI or state agency, the contact and results should be documented in the investigation process.  Many ambiguous cases of legal interpretation come through my office.  I tend not to see the easy cases.  I get the cases where the answer is not entirely clear or well defined under legal authorities.  Response from legal review should be provided to you in writing as privileged communication.  If there are any false assumptions made in the legal analysis, make certain they are properly addressed and that the opinion is properly modified to be based on the correct assumptions.
  • You should never chose to simply ignore legal advice and opinion on interpretation of a legal issue.  Failing to follow a legal opinion or analysis can create very bad evidence in your files.  If there is disagreement or a false assumption in the legal opinion, it is fair to address the issue and ask for a correction.  But you should never put yourself in a position of putting your head in the sand when you have a legal opinion or analysis that you simply do not like.

More on false claims act coming.

Annual Health Care Fraud and Abuse Control Program Report

Tuesday, March 11th, 2014

Record Recovery for Health Care Fraud and Abuse

The U.S. Department of Justice (DOJ) and the U.S. Department of Health and Human Services (HHS) recently released its annual Health Care Fraud and Abuse Control Program (HCFAC) report. This report indicates that in the last three years for every dollar spent on health care related fraud and abuse investigations through HCFAC and other government programs, the government recovered $8.10. This is a record high for the 17-year old program.  HCFAC focuses on eliminating fraud, waste, and abuse in the health care industry.

A few notes on the report’s numbers:shutterstock_1766714

•      The federal government recovered a record-breaking $4.3 billion in fiscal year 2013 alone.
•      Over the last five years, the federal government recovered $19.2 billion—this is more than double the previous five-year period.
•      In fiscal year 2013, the DOJ and HHS strike force team filed 137 cases, charged 345 individuals with crimes, secured 234 guilty pleas, and achieved 46 convictions.
•      Defendants sentenced in fiscal year 2013 served an average of 52 months in prison.
•      Centers for Medicare and Medicaid Services (CMS) have banned 225,000 individuals and entities from billing Medicare between March 2011 and September 2013.

Attorney General Eric Holder states that, “With these extraordinary recoveries, and the record-high rate of return on investment we’ve achieved on our comprehensive health care fraud enforcement efforts, we’re sending a strong message to those who would take advantage of their fellow citizens, target vulnerable populations, and commit fraud on federal health care programs,” said Attorney General Eric Holder.

The return on investigation investment suggests that the federal government’s interest in investigating and prosecuting health care fraud and abuse is substantial. In short, health care compliance is more important than ever.

Annual Health Care Fraud and Abuse Control Program Report

Monday, March 10th, 2014

The U.S. Department of Justice (DOJ) and the U.S. Department of Health and Human Services (HHS) recently released its annual Health Care Fraud and Abuse Control Program (HCFAC) report.  This report indicates that in the last three years for every dollar spent on health care related fraud and abuse investigations through HCFAC and other government programs, the government recovered $8.10. This ishutterstock_1766714s a record high for the 17-year old HFAC program. The HFAC program focuses on eliminating fraud, waste, and abuse in the health care industry.

A few notes on the report’s numbers:

• The federal government recovered a record-breaking $4.3 billion in fiscal year 2013 alone.
• Over the last five years, the federal government recovered $19.2 billion—this is more than double the previous five-year period.
• In fiscal year 2013, the DOJ and HHS strike force team filed 137 cases, charged 345 individuals with crimes, secured 234 guilty pleas, and achieved 46 convictions.
• Defendants sentenced in fiscal year 2013 served an average of 52 months in prison.
• Centers for Medicare and Medicaid Services (CMS) have banned 225,000 individuals and entities from billing Medicare between March 2011 and September 2013.

Attorney General Eric Holder states that, “With these extraordinary recoveries, and the record-high rate of return on investment we’ve achieved on our comprehensive health care fraud enforcement efforts, we’re sending a strong message to those who would take advantage of their fellow citizens, target vulnerable populations, and commit fraud on federal health care programs,” said Attorney General Eric Holder.

The return on investigation investment suggests that the federal government’s interest in investigating and prosecuting health care fraud and abuse is substantial. In short, health care compliance is more important than ever.

False Claims Act Basics – Health Care False Claims

Thursday, February 6th, 2014

False Claims Act Basics

Overpayment Repayment 60 Day RuleThe False Claims Act (“FCA”) provides a very strong enforcement tool to the federal government.  The FCA also provides the opportunity for whistleblowers to bring “qui tam” cases and collect a portion of the recovery where false claims are proved against the federal government.

FCA recovery was originally intended to provide a remedy against unscrupulous civil war profiteers.  Penalties were enhanced when the FCA was dragged off the shelf in the 1980s in reaction to some of the overpricing of government contracts selling supplies to the federal government.

Recently, the FCA has become one of the government’s prime enforcement tools t o deter fraud in the federal health care programs.  Historically, the FCA has been available when a health care provider falsely bills for covered services.  Triple damages and an $11,000 per claim penalty provide a strong deterrent in an industry that may make hundreds of claims per day.

Recent legislation has expanded FCA liability to claims that the provider knows resulted in an overpayment if the provider does not make repayment within 60 days of obtaining knowledge of the wrongfully billed amount.  Some of the potential applications of this that makes a simple overpayment a false claim has generated much discussion among health care lawyers and compliance officers alike.  When an organization is deemed to have knowledge of the overpayment has been the subject of much speculation due to the ambiguities that exist in the new rule.

It may be helpful to frame this discussion by touching on the general requirements that must be met in order to prove any claim under the Federal False Claims Act.  The three general elements that must be proved include:

1.         The submission of a claim to the federal government.  In the health care context, the claim will normally be submitted to a government health program.

2.         The claim must be false.

3.         The claim must have been submitted knowingly.  Actual knowledge that the claim was false will always prove the knowledge requirement.  However, a FCA case can also be built around the submission of a claim with “reckless disregard” for its truth or falsity.

Recent health care legislation, in particular the Fraud Enforcement Recovery Act of 2009, greatly expanded the scope of the FCA.  The FCA is now applicable to a wide variety of situations that would not have previously been covered.  For example, the failure to return an identified overpayment now becomes a false claim.  The potential remedies that a provider may face for not promptly repaying known overpayments creates a strong incentive for health care providers to monitor and audit their claims and set up processes that will catch improper billing that could ripen into the FCA.

Reckless disregard or hiding your head in the sand like an ostrich is no longer a way to avoid massive potential FCA liability.

Compliance programs need to be amended appropriately to address the new potential legal and financial risk presented by these new penalties.

Anesthesia Service Profit Centers – OIG Advisory Opinion 13-14

Monday, November 25th, 2013

Anesthesia Billing Arrangements – New OIG Advisory Opinion 13-14

anesthesia billing advisory opinionThe Office of Inspector General has released a new advisory opinion addressing the implications of a contract for anesthesia services between an anesthesiology group and a psychiatry group.  OIG Advisory Opinion No. 13-15 was published on November 15, 2013.  The opinion illustrates the OIG’s difficulty with arrangements between existing anesthesiology groups who are forced to forego the right to bill for their professional fees in order to provide anesthesia services for patients of a provider who is not historically in the business of providing anesthesia services.  This type of arrangement seems to be arising more frequently as provider groups search for ways to capitalize on additional revenue streams from their existing patient base.

Opinion 13-15 involved a psychiatry group who proposed a  contract with an anesthesiology group to provide additional anesthesia coverage for patients of the psychiatry group who were undergoing electroconclusive therapy procedures.  Under the contract, the anesthesiology group reassigned its rights to bill and collect for its anesthesia services to the psychiatry group.  The anesthesia group agreed to accept a fixed per diem rate for providing anesthesia services for the psychiatry group’s patients.  The arrangement permitted the psychiatry group to profit from the difference between anesthesia billings and the per diem fee paid to the anesthesia group.

The OIG found that this arrangement created a risk of violating the Anti-Kickback Statute.  The OIG noted that the per diem amounts the psychiatry group would pay to the anesthesia group would not qualify for protection under the safe harbor for personal services and management contracts for a number of reasons, including the aggregate compensation to be paid over the term of the agreement would be neither set in advance nor consistent with fair market value.  Additionally, the safe harbor protects only payments made by a principal (here, the psychiatry group) to an agent (here, the anesthesia group).  The safe harbor does not protect the remuneration from the anesthesia group to the psychiatry group that is of issue in this case.

After determining that there was no safe harbor available to protect the arrangement, the OIG went on to analyze the risk that the arrangement would present under the Anti-Kickback Statute.  The OIG concluded that the arrangement appears to be designed to permit the psychiatry group to indirectly receive compensation, in the form of a portion of requestor’s anesthesia services revenues, in return for the psychiatry group’s referrals of patients to the anesthesia group.  The OIG concluded that the arrangement presents a significant risk that the opportunity to generate profit on anesthesia services would be in return for referrals.

Advisory Opinion 13-15 is just the latest in a long line of releases that casts a shadow on attempts of one provider group to profit from captive referrals for services that it does not ordinarily provide.  The OIG seems to permit the legitimate extension of services by groups like the psychiatry group at issue in 13-15.  The OIG had no difficulty with the psychiatry providing anesthesia services by a psychiatrist member of the psychiatry group who was also qualified to provide anesthesia services.  To contrast, the OIG is obviously suspicious of arrangements that permit the non-anesthesia group to profit from the services of the anesthesia group.  The consequences of a violation under the Anti-Kickback Statute can include both criminal and civil damages.  As a result, providers need to be extremely cautious about entering into the type of arrangement that appears contrived to permit a profit to be made from services that are normally billed by an anesthesia provider.

Please feel free to contact John Fisher, CHC, CCEP, in the Ruder Ware Health Care Industry Focus Group for more information.

Fraud Risks In Nursing Home/Hospice Relationships

Wednesday, October 30th, 2013

Fraud Risks Between Nursing Homes and Hospice Providers

Hospice Nursing Home Fraud and AbuseRelationships between hospices and nursing homes are a particular area of concern.  OIG is inherently suspicious of benefits that hospices may provide to nursing homes in order to gain hospice referrals of nursing home patients.  For example, if a hospice provides services to nursing home patients that are normally provided by the nursing home, the benefit could be deemed to be a “kickback” for referrals.  Hospices should have clear policies and procedures regarding the scope of services to be provided to nursing home patients.  Any formal agreement with a nursing home should be carefully scrutinized to assure compliance and provision should be added agreeing to the appropriate scope of care that is to be provided to nursing home patients.

Government focus on hospice providers should heighten awareness to these issues.  Hospices must make certain that they have formal compliance programs in place and that the compliance program is actively operated to identify and address risk.  Certainly, the risks identified above should be addressed by all hospice providers.  There are a broad range of additional items that should be actively addressed.  Additionally, all elements of the compliance program should be fully operationalized.  Even the most robust compliance program will not necessarily detect all compliance problems.  It is important that hospice providers are able to demonstrate that they are continually monitoring risk and operating their program.  When undetected programs come to light, the hospice provider will be able to show that reasonable steps are routinely taken to identify and correct problems.  This will go a long ways toward reducing potential exposure, even in cases where risk is not detected through the program.

Hospice and Home Health Areas of Review Risk

Wednesday, September 18th, 2013

Home Health and Hospice Review Areas

home health hospice fraud reviewsThere are several areas applicable to home health and hospice that are susceptible to review.  Hospice reviews have tended to focus on whether patients actual meet criteria to be eligible to receive hospice benefits.  The focus on hospice arises, at least in part, due to the expansion of this segment of health care industry and the relatively rapid increase in spending for hospice care.  The government’s audit and enforcement trends indicate a deep suspicion that hospice are admitting patients who are not terminal or do not otherwise meet eligibility criteria.  The government points to the relatively large number of hospice patients who are discharged from hospice care alive.

In order to qualify for hospice benefits, a Medicare patient must have an illness that is terminal.  A physician must certify that the patient is terminal and is unlikely to live longer than six months if the illness runs its expected course.  The patient must also waive their right to receive curative treatment for the terminal condition in order to qualify for benefits.  Physician certification must be provided at two 90-day intervals following hospice admission.  After the first 180 days of hospice care, the patient must be seen “face-to-face” by a nurse practitioner who determines continued eligibility for coverage.  This process of certification and admission qualification creates several obvious pouts of risk for providers.  The government seems to be keying in on a few of these points of risk as evidenced by recent enforcement actions.

Payments to physicians for administrative duties should be carefully scrutinized to assure that the compensation arrangement does not create a referral inducement.  Medical director agreements must be analyzed under the Anti-Kickback Statute and applicable Stark Law exceptions.  Compensation should be at fair market value, cannot take into account he volume or value of referrals, and must meet other regulatory requirements.

False Claims Act and Medicare Conditions of Participation

Monday, April 29th, 2013

Sixth Circuit Finds Limits to False Claims Act 

False Claims Act LimitationsThe sixth circuit court of appeals has found that there are limits to how the False Claims Act can be used to attach health care providers.  The court ruled that the future of an Independent Diagnostic Testing Facility to assure appropriately qualified providers supervised diagnostic tests could not form the basis for a claim under the False Claims Act.

The suit has been in the courts since it was filed by a qui tam complainant in 2006.  The lower court had found that the failure of the facility to assure appropriate supervision made claims for services “false claims” to which the extreme penalties of the Federal False Claims Act could be applied?

The appellate court found that even though the provider’s activities may have violated the conditions of participation for IDTFs, they did not amount to a violation of a “condition of payment.”  Based on the distinction between conditions of participation and conditions of payment, the court refused to apply the False Claims Act.

The extent that other courts will adopt similar reasoning in other types of cases is yet to be determined.  For now, providers can take some assurance in the fact that courts may be willing to find some limitation on the ability of the government to use the rather extreme penalties under the False Claims Act to prosecute every failure to comply with a condition of participation.  Had the court upheld the lower court’s ruling, it could have resulted in significant potential exposure to health care providers who could have been subject to False Claims Act exposure for every nonconformity with conditions of participation.

OIG Work Plan New Hospital Issues Added For 2013

Thursday, October 4th, 2012

 

OIG 2013 Work Plan – Hospital Issues Aded To OIG Work Plan

Hospitals—Inpatient Billing for Medicare Beneficiaries (New)

Hospitals—Diagnosis Related Group Window (New)

Hospitals—Non-Hospital-Owned Physician Practices Using Provider-Based Status (New)

Hospitals—Compliance With Medicare’s Transfer Policy (New)

Hospitals—Payments for Discharges to Swing Beds in Other Hospitals (New)

Hospitals—Payments for Canceled Surgical Procedures (New)

Hospitals—Payments for Mechanical Ventilation (New)

Hospitals—Quality Improvement Organizations’ Work With Hospitals (New)

Hospitals—Acquisitions of Ambulatory Surgical Centers: Impact on Medicare Spending (New)

Critical Access Hospitals—Payments for Swing-Bed Services (New)

Long -Term-Care Hospitals—Payments for Interrupted Stays (New)

 

Issues That Continue To Be On OIG Radar

Hospitals—Same-Day  Readmissions

Hospitals—Acute-Care Inpatient Transfers to Inpatient Hospice Care

Hospitals—Admissions With Conditions Coded Present on Admission

Hospitals—Inpatient and Outpatient Payments to Acute Care Hospitals

Hospitals—Inpatient Outlier Payments: Trends and Hospital Characteristics

Hospitals—Reconciliations of Outlier Payments

Hospitals—Duplicate Graduate Medical Education Payments

Hospitals—Occupational-Mix Data Used To Calculate Inpatient Hospital Wage Indexes

Hospitals—Inpatient and Outpatient Hospital Claims for the Replacement of Medical Devices

Hospitals—Outpatient Dental Claims

Hospitals—Outpatient Observation Services During Outpatient Visits

Critical Access Hospitals— Variations in Size, Services, and Distance From Other Hospitals

Inpatient Rehabilitation Facilities—Transmission of Patient Assessment Instruments

Inpatient Rehabilitation Facilities—Appropriateness of Admissions and Level of Therapy

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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