Federal Fraud and Abuse Laws: Civil Monetary Penalties

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Civil Monetary Penalties LawKim C. Stanger

(2/13)

Overview

Civil Monetary Penalties Law (“CMPL”)– Prohibitions– Penalties– Exceptionsp

Applying CMPL to common situations Responding to potential CMPL problems Action items Questions?

Preliminaries

Written materials.– .ppt slides– Civil Monetary Penalties Law, 42 USC 1320a-7a.– OIG Supplemental Compliance Program Guidance for

HospitalsHospitals

– Stanger, Health Care Transactions: Beware Stark, Kickbacks, and More

Presentation will be recorded and available for download at www.hhhealthlawblog.com.

If you have questions, please submit them using chat line or e-mail me at [email protected].

Copyright © 2013, Holland & Hart LLP Kim C. Stanger 208-383-3913 [email protected] www.hollandhart.com www.hhhealthlawblog.com

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Preliminaries

This program provides an overview of the relevant law. Read the law, regulations and advisory opinions or consult

with a qualified expert when applying the law to facts. Consider other applicable laws, e.g.,

– Ethics in Patient Referrals Act (“Stark”)Ethics in Patient Referrals Act ( Stark )– Anti-Kickback Statute– State laws– Managed care contracts

This program does not establish an attorney-client relationship.

This program does not constitute the giving of legal advice.

Civil Monetary Penalties Law(42 USC 1320a-7a)

Civil Monetary Penalties Law

Prohibits certain specified conduct:– Submitting false or fraudulent claims or misrepresenting

facts relevant to services.– Offering inducements to program beneficiaries.– Offering inducements to physicians to limit services.g p y– Submitting claims for services ordered by, or contracting

with, an excluded entity.– Failing to report and repay an overpayment.– Failing to grant govt timely access.

Penalties depend on specific conduct involved.(42 USC 1320a-7a)


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Civil Monetary Penalties:Regulations

Implementing regulations are found at 42 CFR 1001 et seq.– 1001: Exclusion from Medicare– 1002: Exclusion from Medicaid– 1003: Civil Monetary Penaltiesy

Regulations establish:– Bases for action.– Penalties.– Administrative process for penalties.

Review both the statute and regulations when applying the laws.

Fraudulent Activities

False or Fraudulent Claims

Cannot knowingly present or cause to be presented to federal or state program a claim that is:– For an item or service that the person knows was not

provided as claimed (e.g., upcoding).– False or fraudulent.– Presented as physician service or physician extender service

but the person who presented the claim knew that: Physician was not licensed, Physician’s license was improperly obtained, or Physician misrepresented that he/she was board certified.

– For a pattern of items or services that a person knows or should know are not medically necessary.

(42 USC 1320a-7a(a)(1))


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False or Fraudulent Claim

Penalties:– Denial of payment.– $10,000 for each item or service claimed.– 3x amount claimed for item or service.

Exclusion from Medicare and Medicaid– Exclusion from Medicare and Medicaid.(42 USC 1320a-7a(a))

May also trigger False Claims Act– $5,500 to $11,000 per false claim.– 3x the amount claimed.– Qui tam lawsuit.– Repayment of amounts improperly paid.


Cannot knowingly make, use, or cause to be made or used a false record or statement material to a false or fraudulent claim for payment for items and services furnished under a Federal health care program.

Penalty– $50,000 per each false statement or misrepresentation.– 3x amount claimed.– Denial of payment.– Repayment of amounts improperly paid.– Exclusion from Medicare and Medicaid.

(42 USC 1320a-7a(a)(8))


Physician cannot execute a document representing that patient meets requirements for home health services if the physician knows that all of the requirements are not met.

Penalty– $5,000$ ,– 3x amount of payments for home health services made

per such certification.(42 USC 1320a-7a(b)(3))


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False or Fraudulent Statement in Application or Contract

Cannot knowingly make or cause to be made false statement, omission or misrepresentation in any application, bid, or contract to participate in a Federal health care program.

Penalty– $50,000 for each false statement or misrepresentation of

material fact.– 3x amount claimed of items or services based on the

application containing the false statement or misrepresentations.

– Repayment of amounts improperly paid.– Exclusion from Medicare and Medicaid.

(42 USC 1320a-7a(a)(9))

Violation of Provider Agreement

Cannot knowingly present or cause to be presented to any person a request for payment that violates:– Assignment limitations.– Arrangement with a state agency not to charge a person

for an item or service over allowed charge.g– Agreement to be a participating provider.

Penalty – $10,000 per item or service– 3x amount claimed.– Repayment of amounts paid.– Exclusion from Medicare and Medicaid.

(42 USC 1320a-7a(a)(2))

Discharge

Cannot knowingly give or cause to be given to any person, with respect to Medicare inpatient coverage, information that he knows or should know is false or misleading, and that could reasonably be expected to influence the decision when to discharge such person or another individual from th h it lthe hospital.

Penalty– $15,000 for each individual for which false info given.– 3x amount claimed.– Repayment of amounts paid.– Exclusion from Medicare and Medicaid.

(42 USC 1320a-7a(a)(3))


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Kickbacks

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Kickbacks

Anti-Kickback Statute (“AKS”)– Cannot offer, solicit, receive or pay remuneration to induce or

reward referrals for items or services payable by Federal healthcare program unless fit in safe harbor.

– 5 years in prison– $25,000 fine.(42 USC 1320a-7b(b))

AKS violation = CMPL violation.– $50,000 per violation– 3x the remuneration offered– Repayment of amounts paid.– Exclusion from Medicare and Medicaid

(42 USC 1320a-7a(a)(7))

Kickbacks

No AKS or CMPL violation if fit within AKS safe harbor, e.g.,– Discounts– Waiver of beneficiary copays and deductibles– Bona fide employment– Personal services or management contractsg– Space or equipment rentals– Practitioner recruitment– Certain investments– Certain referral arrangements– Certain arrangements with managed care organizations– Others

(42 CFR 1001.952)


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Inducements to Program Beneficiaries


What’s the big deal?

“Offering valuable gifts to beneficiaries to influence their choice of a Medicare or Medicaid provider raises quality and cost concerns. Providers may have an economic incentive to offset the additional costs attributable to the giveway by providing unnecessary services or by substituting cheaper or lower quality services. The use of giveaways to attract business also favors large providers with greater financial resources for such activities, disadvantaging smaller providers and business.”

(OIG Bulletin, Offering Gifts and Other Inducements to Beneficiaries)

Inducing business increases utilization and costs to Medicare and Medicaid.


Cannot offer or transfer remuneration to Medicare or state program beneficiaries if the person knows or should know that the remuneration is likely to influence the beneficiaries to order or receive items or services payable by federal or state programs from a particular provider.

Penalty: – $10,000 for each item or service.– 3x amount claimed.– Repayment of amounts paid.– Exclusion from Medicare and Medicaid.

(42 USC 1320a-7a(a)(5)).


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Applies if know or should know that remuneration is likely to induce Medicare / Medicaid business.– No specific intent required.

“Remuneration” = anything of value, including but not limited to:– Waiver of co-pays and deductibles unless satisfy certain

conditions, and– Items or services for free or less than fair market value

unless satisfy certain conditions.(42 USC 1320a-7a(i); 42 CFR 1003.101; OIG Bulletin, Gifts to Beneficiaries)


“Remuneration” does not include:– Waivers or co-pays based on financial need or after failed

collection efforts if conditions met.– Items or services if there is financial need and conditions

met.– Incentives to promote delivery of preventative care.– Payments meeting Anti-Kickback Statute safe harbor– Retailer coupons, rebates or rewards offered to public.– Any other remuneration that promotes access to care and

poses a low risk of harm to patients and federal health care programs.

– Certain other situations.(42 USC 1320a-7a(i))

Free or Discounted Items or Services

May offer free or discounted items to beneficiaries if: Remuneration is not likely to influence the beneficiary to

order or receive items or services payable by federal or state health care program.(42 USC 1320a-7a(5))

Item or service is of low value, i.e., – Each item or service is less than $10, and– Aggregate is less than $50 per patient per year.

(OIG Bulletin, Offering Gifts and Inducements to Beneficiaries (8/02); 66 FR 24410-11)


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May offer items to beneficiaries if not “remuneration”. Item or service:

– Not offered as part of any advertisement or solicitation;– Not tied to provision of other federal program business;

Reasonable connection between item or service and– Reasonable connection between item or service and medical care of beneficiary; and

– Good faith determination that beneficiary has financial need.

(42 CFR 1320a-7a(i))


May offer items to beneficiaries if not “remuneration”. Item fits within an Anti-Kickback Statute safe harbor.

– 42 CFR 1001.952(h): Discounts. Item or service promotes access to care and poses low risk

of harm to patients or federal program.of harm to patients or federal program.– Adv. Op. 11-16: OIG concluded it would not seek sanctions

based on non-profit entity’s provision of transportation, lodging and meal assistance to patients and their family where, among other things: Program not advertised in advance. Costs not claimed on cost report. Public benefit offered through program.

(42 CFR 1320a-7a(i))


May offer item to beneficiaries if not “remuneration”. Incentives to promote certain types of preventative care

payable by Medicare or state program if:– Prenatal service or post-natal well-baby visit, or a service

described in the U.S. Preventive Services Task Force’s Guide to Clinical Preventive Services.

– Not tied (directly or indirectly) to provision of other services payable by Medicare or a state program.

– Not cash instrument or convertible cash.– Value of inducement not disproportionately large in relation to

value of the preventative care service or future health care costs that will be prevented.

(42 CFR 1320a-7a(i); 42 CFR 1003.101; Adv. Op. 12-21)


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Free or Discounted Items:Screening or Tests

OIG has approved free screening services or tests (e.g., free blood pressure check by hospital) where:– Not conditioned on the use of any items or services

from any particular provider.– Patient not directed to any particular provider.y p p– Patient not offered any special discounts or follow-up

services.– If test shows abnormal results, visitor is advised to see

his or her own health care professional.(Adv. Op. 09-11)

Advisory Opinions are not binding, but provide guidance.

Free or Discounted Items:Transportation

OIG has approved free transportation programs where, among other things:– Program open to all eligible patients; not selectively

limited to targeted beneficiary populations.– Type of transportation is reasonable (i.e., no limousine).yp p ( , )– Travel is local to physicians’ offices.– Public transportation and parking is limited.– Cost of program would not be claimed on cost report or

shifted to a federal program.(Adv. Op. 11-02; see also OIG Bulletin, Gifts to Beneficiaries)

Advisory Opinions are not binding, but provide guidance.

Free or Discounted Items:Provided by Third Party

CMPL does not prohibit an independent entity (e.g., charity) from providing free or discounted items or services to beneficiaries.

Providers could fund the items or services provided by third party so long as:– The independent entity makes and independent

determination of need, and– Beneficiary’s receipt of remuneration does not depend,

directly or indirectly, on the beneficiary’s use of a particular provider.

(OIG Bulletin, Gifts to Beneficiaries)


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But offering free or discounted items may violate other laws.

Physician or physician’s family member– May violate Stark unless structured to fit safe harbor.

Other referral source for federal program businessMay violate Anti Kickback Statute if one purpose is to– May violate Anti-Kickback Statute if one purpose is to induce or reward referrals for federal program business unless structured to fit safe harbor.

Private pay patients– May violate state laws prohibiting kickbacks.

Waiving or Discounting Co-Pays or Deductibles

What’s the big deal? Medicare typically pays 80% of reasonable charge, which is

based on provider’s customary and actual charges. “A provider … who routinely waives Medicare copayments or deductibles is misstating its actual charges…”“[I]f ti t i d t [ ] ti f th i th ill “[I]f patients are required to pay [a] portion of their care, they will be better health care consumers, and select items or services because they are medically needed, rather than simply because they are free. Ultimately, if Medicare pays more for an item or service than it should, or if it pays for unnecessary items or services, there are less Medicare funds available to pay for truly needed services.”

(OIG Fraud Alert, Routine Waiver of Copayments or Deductibles)

Waiving Co-Pays or Deductibles: Red Flags

Advertising no co-pay or deductible.– “Medicare accepted as payment in full”– “No out of pocket expenses”– “Insurance only billing”.

Routine use of “financial hardship” forms without Routine use of financial hardship forms without – Good faith attempt to collect – Determination of financial need.

Collection of copays only if patient has Medigap coverage.(OIG Fraud Alert, Routine Waiver of Copayments or Deductibles)


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May waive or discount Medicare co-pays or deductibles if: Not offered as part of any advertisement or solicitation; Do not routinely waive co-pays or deductibles; and Waive or discount after

good faith determination that the beneficiary is in– good faith determination that the beneficiary is in financial need, or

– unable to collect after reasonable collection efforts.(42 USC 1320a-7a(i)(6); see also Adv. Op. 12-16)

Document factors such as local cost of living; patient’s income, assets and expenses; patient’s family size; scope and extent of bills.


May waive or discount co-pays if fit within AKS safe harbor. Hospital inpatient stay paid under PPS.

– Waived amounts cannot be claimed as bad debt or shifted to any other payors.

– Offered without regard to the reason for admissionOffered without regard to the reason for admission, length of stay, or DRG.

– waiver may not be made as part of any agreement with third party payer with limited exceptions.

FQHC or other health care facility under any Public Health Services Grant.

(42 CFR 1001.952(k))


But waiving co-pays may violate other provisions.

Physician or family member of physician– May violate Stark if physician refers designated health

services unless fit within safe harbor. Referral sourceReferral source

– May violate Anti-Kickback Statute if one purpose is to induce referrals for federal program business unless fit within safe harbor.

Private pay patients– May violate managed care contracts.– May violate state laws prohibiting kickbacks, rebates, or

fee splitting.


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Prompt Pay Discounts

AKS safe harbor for waivers of copays may apply if:– Hospital inpatient.– FQHC.

OIG has approved prompt pay discounts if: – Amount of discount relates to avoided collection costs.Amount of discount relates to avoided collection costs.– Offered to all patients for all services without regard to

patient’s reason for admission, length of stay, or DRG.– Not advertised.– Notified private payors of program.– Costs not passed to Medicare, Medicaid or other payors.

(56 FR 35952; Adv. Op. 08-3)

Beware managed care contracts.

Payment to Induce Reduction or Limitation of Services


What’s the big deal?

When govt changed to prospective payment system (DRGs), – Payment for hospital episode of care was capped

despite costs involved in care.p– Govt concerned that hospitals would create incentives

to reduce costs by reducing or limiting services. Congress: “We must not tolerate hospitals paying

physicians to reduce or limit services to the elderly.”(OIG Bulletin, Gainsharing Arrangements)


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Hospital or CAH cannot knowingly make a payment, directly or indirectly, to a physician as an inducement to reduce or limit services provided to Medicare or Medicaid beneficiaries who are under the direct care of the physician.

Physician cannot knowingly accept such a payment. Penalties

– $2000 for each individual with respect to whom payment made.

– Any other penalty allowed by law.(42 USC 1320a-7a(b)(1))


“[A]ny hospital incentive plan that encourages physicians through payments to reduce or limit clinical services directly or indirectly violates the statute.” – Payment need not be tied to actual diminution in care so

long as the hospital knows that the payment may influence physician to reduce or limit services.

– No requirement that payment be tied to a specific patient or a reduction in medically necessary care.

(OIG Bulletin, Gainsharing Arrangements) Does not apply Medicare or Medicaid risk-based managed

care contracts and Medicare Advantage plans, which are governed by different statute.(Adv. Op. 12-22 at n.20)

Gainsharing

Gainsharing = arrangement in which a hospital gives physician a percentage or share of any reduction in the hospital’s cost for patient care attributable in part to the physicians’ efforts, i.e., physician shares in cost savings.(OIG Bulletin, Gainsharing Arrangements)

OIG concerned about “(i) stinting on patient care, (ii) ‘cherry picking’ healthy patients and steering sicker (and more costly) patients to hospitals that do not offer such arrangements; (iii) payments to induce patient referrals; and (iv) unfair competition among hospitals offering incentive compensation programs to foster physician loyalty and to attract more referrals.”(Adv. Op. 12-22)


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Gainsharing

OIG has periodically approved gainsharing in advisory opinions if certain safeguards included, e.g., – Proposed plan does not adversely affect patient care.

Quality evaluated by third party.– Low risk that incentive will lead physicians to provide

medically inappropriate care.– Payments limited in duration and amount.– Payments not tied to referrals or other suspect actions.

(See, e.g., Adv. Op. 12-22)

OIG advisory opinions do not apply to Stark.– CMS proposed Stark exception, but was not finalized.

CMS/OIG have issued interim rule waiving CMPL and Stark for ACOs.

Excluded Entities

Excluded Entities

HHS may exclude individuals and entities from participating in federal health care programs if they have been convicted of fraud, abuse, or many other offenses.– Mandatory exclusions: 42 CFR 1001.101– Permissive exclusions: 42 CFR 1001.201

States are required to exclude from Medicaid any person who has been excluded from federal programs.

Exclusion continues until OIG reinstates the entity or withdraws exclusion.– Must apply for reinstatement.

(42 USC 1320a-7 and 1320c-5; 42 CFR 1001 parts B and C)


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Excluded Entities

Excluded person cannot order or prescribe item or service if the person knows or should know that a claim for such item or service will be made under a federal health care program.

Penalty Penalty– $10,000 per item or service.– 3x amount claimed.– Repayment of amounts paid.

(42 USC 1320a-7a(a)(8))

Excluded Entities

Cannot knowingly present or cause to be presented a claim to a federal or state program that is for an item or service furnished by an excluded person.

Penalty: Penalty:– $10,000 per item or service.– 3x amount claimed.– Repayment of amounts paid.– Exclusion from Medicare and Medicaid.– Criminal sanctions

(42 USC 1320a-7a(a)(1)(D); 42 CFR 1001.1901).

Excluded Entities

Cannot hire or contract with an excluded entity or arrange for an excluded entity to provide items services payable by federal program if knew or should know if the exclusion.

Penalties– $10,000 per claim submitted.– 3x amount of claims.– Repayment of amounts paid.– Exclusion from Medicare and Medicaid.

(42 USC 1320a-7a(a)(6)).


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Excluded Entities

According to the OIG, prohibition against contracting with excluded individual:– Includes administrative and management functions necessary

to providing clinical items and services.– Applies to employees, contractors, temp personnel,

volunteers or persons paid by third parties.– Cannot use federal payments to cover an excluded

individual’s salary, expenses, or fringe benefits.(OIG Bulletin, Effect of Exclusion from Program)

May contract with excluded entity if:– Paid excluded individual’s salary, benefits, and expenses

solely from non-federal funds; and– Services furnished by the excluded individual relate solely to

non-federal program patients.(Adv. Op. 03-01; OIG Bulletin, Effect of Exclusion from Program)

Excluded Entities

Excluded person cannot:– retain a direct or indirect ownership or control interest in

an entity that is participating in a federal or state program if the person knows or should know of the action constituting the basis for the exclusion, or

– be an officer or managing employee of such an entity. Penalty

– $10,000 per day the relationship continues– 3x damages– Repayment of amounts paid.

(42 USC 1320a(a)(4)).

Entities that own or manage excluded entity may be subject to exclusion.

Excluded Entities

Medicare will not pay claim if person “knew or should have known” of exclusion.– Exception for certain emergency services.

(42 CFR 1001.1901(b) and .1003.102(a))

Knowledge = g– Have actual knowledge of exclusion or sufficient facts

that you should have known of exclusion.– Notified by HHS of exclusion, e.g., in response to claim.– Listed on the List of Excluded Individuals or Entities

(“LEIE”)


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List of Excluded Individuals and Entities (“LEIE”) “Providers and contracting entities have an affirmative duty to

check the program exclusion status of individuals and entities prior to entering into employment or contractual relationships, or run the risk of CMP liability if they fail to do so.”

Check LEIE before hiring or contracting with entities.– Employees, contractors, vendors, medical staff, etc.

Ch k LEIE i di ll t d t i t t Check LEIE periodically to determine status.– Employees, providers, vendors, medical staff members,

ordering providers, others?– Excluded provider list updated monthly. CMS Medicare: check LEIE “periodically” or “routinely,

e.g., at least annually)” (OIG Supplemental Compliance Guidance, 70 FR 4876) CMS Medicaid: check LEIE monthly

(Letter from H. Kuhn, CMS Medicaid, 1/16/09).

https://oig.hhs.gov/exclusions/exclusions_list.asp

Failure to Report and Repay


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Failure to Report and Repay

If know of overpayment, must report and return overpayment within 60 days per False Claims Act requirements.– “Overpayment” = payment to which you are not entitled,

including payment in violation CPML.– See CMS’s Proposed Repayment Rule, 77 FR 9179.

Penalty– $10,000 for each item or service.– 3x amount claimed.– Exclusion from Medicare and Medicaid.

May also be subject to False Claims Act penalties.(42 USC 1320a-7a(a)(10)).

Failure to Grant Access

Failure to Grant Access

Cannot fail to grant timely access, upon reasonable request, to the OIG for purposes of audits, investigations, evaluations or other statutory functions of the OIG.

Penalties– $15,000 for each day that fail to grant access.$ , y g– Exclusion from Medicare and Medicaid.

(42 USC 1320a-7a(a)(9); 42 CFR 1001.1301)


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Accountable Care Organization (ACO) Waivers

ACO Waivers

Medicare Shared Savings Program (“MSSP”) promotes actions that might be prohibited under CPML, e.g.,– Inducing reduced costs to Medicare by sharing

t i ith ACO idcost savings with ACO providers.– Inducing beneficiaries to receive services from

ACO members.

ACO Waivers

CMS/OIG issued interim rules waiving CMPL, AKS and Stark for ACOs participating in MSSP.– ACO pre-participation waiver– ACO participation waiver– Shared savings distribution waiverShared savings distribution waiver– Compliance with Stark, AKS, and Gainsharing CMPL

waiver– Patient incentives wavier

Each waiver requires compliance with certain conditions.(76 FR 67992)


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ACO Waivers:ACO Pre-Participation

Pre-Participation Waiver– Arrangement undertaken in good faith with intent to

develop ACO that will participate in MSSP.– Parties developing ACO must take diligent steps to

develop the ACO in target year.p g y– ACO’s governing body has made and duly authorized

bona fide determination that arrangement is reasonably related to MSSP purpose.

– Must document actions and maintain documents.– Must publicly disclose arrangement.

(76 FR 67992)

ACO Waivers:ACO Participation

ACO Participation Waiver– ACO participating in MSSP and remains in good

standing.– ACO meets the MSSP requirements.– ACO’s governing body has made and duly authorizedACO s governing body has made and duly authorized

determination that arrangement is reasonably related to MSSP purpose.

– Must document actions and maintain documents.– Must publicly disclose arrangement.

(76 FR 67992)

ACO Waivers:Shared Savings Distribution

Shared Savings Distribution Waiver– ACO participating in MSSP and in good standing.– Shared savings are earned ACO pursuant to MSSP.– Shared savings are distributed among ACO

participants or used for activities related to MSSPparticipants, or used for activities related to MSSP.– For CMP gainsharing, shared savings from hospital to

physician are not made knowingly to induce a physician to reduce or limit medically necessary items or services.

(76 FR 67992)


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ACO Waivers:CMPL, AKS and Stark

CMP Gainsharing, AKS and Stark Waiver– ACO participating in MSSP and in good standing.– Financial relationship is reasonably related to MSSP.– Financial relationship fits within a Stark safe harbor.

(76 FR 67992)(76 FR 67992)

ACO Waivers:Patient Incentives

Patient incentive wavier.– ACO participating in MSSP and in good standing.– Reasonable connection between items or services and

medical care to beneficiary.– Items or services are in-kind not cashItems or services are in kind, not cash.– Items or services are preventative care or advance the

following clinical goals: Adherence to treatment regime Adherence to drug requirement Adherence to follow-up care plan Management of chronic disease or condition

(76 FR 67992)

OIG Guidance


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Advisory Opinions

Published advisory opinions cover such things as:– Free screenings or tests– Free preventive services– Gift cards to patients to respond to patient complaints or

promote wellness screenings– Waiving copays or deductibles– Prompt pay discounts– Gainsharing arrangements– Free transportation or other services for patients– Support for financially needy patients– Reward cards, coupons, etc. by retailer

Opinions are fact-specific, but offer guidance.

https://oig.hhs.gov/compliance/advisory-opinions/index.asp

Fraud Alerts, Bulletins, etc.

Offering Gifts or Inducements to Beneficiaries (8/02) Routine Waiver of Copayments or Deductibles (12/94) Hospital Discounts Offered to Patients Who Cannot Afford to

Pay Their Bills (2/04) Questions on Charges for the Uninsured (2/04) Effect of Exclusion from Participation in Federal Health Care

Programs (9/99) Guidance for Implementing Permissive Exclusion Authority

Under Section 1128(b)(15) of the Social Security Act.

Gainsharing Arrangements and CMPs for Hospital Payments to Physicians to Reduce or Limit Services to Beneficiaries (7/99)

Beware changes in law.


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https://oig.hhs.gov/compliance/alerts/index.asp

Responding to a Potential CMPL Problem

If you think you have an CMPLproblem…

Don’t ignore it or attempt to sweep under rug.– Remember the False Claims Act penalties.

Don’t submit claims to Medicare or Medicaid until situation resolved.

If possible, stop suspect conduct until questions resolved. Evaluate the situation carefully.

– Confirm facts.– Review CMPL for possible exceptions.– Check for Advisory Opinion, OIG Bulletin, etc. – As necessary, seek qualified expert advice.

As necessary, revise the arrangement going forward. If necessary, repay CMS…


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Repayment Obligation

False Claims Act: – Must report and repay “overpayment” within 60 days.– Overpayment = payment to which you are not entitled,

including payment in violation of Anti-Kickback Statute. Knowing failure to repay =Knowing failure to repay

– Violation of False Claims Act $5,500 to $11,000 per claim 3x damages

– Violation of Civil Monetary Penalties Law $10,000 per claim

See CMS’s Proposed Repayment Rule, 77 FR 9179 (2/16/12)

OIG Self-Disclosure Protocol

Voluntary program to self-report violations. SDP should only be used to resolve matters that

“potentially violat[e] Federal, criminal or civil or administrative laws. Matters exclusively involving overpayments or errors that do not suggest that violations of law have occurred should be brought directly to theof law have occurred should be brought directly to the attention of the [contractor].” (63 FR 58400)– Generally, SDP applies to violations that involve: Actual knowledge Reckless disregard Deliberate ignorance

– Not honest mistakes or errors.(63 FR 58399; Letters dated 4/15/08 and 3/24/09)

OIG Self-Disclosure Protocol

Benefits OIG may reduce penalties if

fully disclose and cooperate. Probably no corporate integrity

agreement. May preclude qui tam lawsuits

Risks OIG may broaden investigation. New matters discovered by OIG

are outside protocol. Failure to fully disclose or

cooperate may result in additional May preclude qui tam lawsuits. Suspends repayment under

Proposed Repayment Rule.

cooperate may result in additional penalties.

OIG may report to other government agencies.

Participation is burdensome. Likely will waive of privilege.


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Self-Disclosure:Pros and Cons Example: excluded employee

– If self-report: OIG will require repayment.Salary and benefits of excluded individual

x Medicare/Medicaid %x Multiplier of 1 to 2%

Repayment amountsp y– If don’t report: things go badly if caught.

if subsequent employer reports, OIG will obtain excluded individual’s work history, then go against you.

Too late to self-report and get benefit. Subject to False Claims Act penalties for submitting improper

claims and/or failing to repay overpayment.– $5,500 to $11,000 per false claim– 3x amount of claims– Program exclusion

https://oig.hhs.gov/compliance/self-disclosure-info/index.asp

Action Items


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Action Items

Review arrangements with program beneficiaries.– Free items or services, such as screening.– Waivers of copays or deductibles.– Financial need policy.– Marketing or advertising programs.g g p g– Prompt pay discounts.

Review financial arrangements with physicians to ensure no inducements to limit services.– Cost savings programs.– Bonuses or compensation tied to cost savings.– Gainsharing

Establish process for monitoring .

Action Items

Make sure you are checking for excluded providers.– New hires, contracts, etc.– Medical staff credentialing.– Ordering physicians.

Periodic checks of all employees and contractors– Periodic checks of all employees and contractors. Require contractors to confirm no exclusion, including

amending contracts to require same.– Provider contracts.– Temp agencies.– Vendors.

Action Items

Ensure your compliance policies address CMPL.– See, e.g., OIG Supplemental Hospital Compliance

Program Guidance, 70 FR 4858 (2005). Train key personnel regarding CMPL compliance.

– Administration.– Compliance officers and committees.– Human resources.– Physician relations and medical staff officers.– Marketing / public relations.– Governing board members.– Purchasing.– Accounts payable.

Document training.


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Action Items

If you think you have a problem:– See comments above….

Additional Resources

https://oig.hhs.gov/compliance/


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OIG Website

Compliance 101 series OIG Compliance Program Guidance

– OIG Supplemental Compliance Program Guidance for Hospitals, 70 FR at 4863-69OIG C li P G id f Ph i i– OIG Compliance Program Guidance for Physicians

Advisory Opinions Special Fraud Alerts Fraud Bulletins Letters Other materials

Additional Holland & Hart Resources

Future webinars– Health Law Basics monthly webinar series– 3/14 Physician Contracts– 4/11 HIPAA

5/9 EMTALA– 5/9 EMTALA Healthcare Update and Health Law Blog

– Under “Publications” at www.hollandhart.com.– E-mail me at [email protected].

Questions?

Kim C. StangerHolland & Hart LLP

[email protected]@hollandhart.com(208) 383-3913
