11

COMPLIANCE ISSUES FACING GROUP PRACTICES

Growing and Operating a Large Medical Practice

Broad and CasselHyatt Regency Orlando

International AirportMarch 3, 2006

GABRIEL L. IMPERATO, ESQ.Broad & Cassel

Fort Lauderdale, FL

22

OVERVIEW

1) RECENT TRENDS IN GOVERNMENT ENFORCEMENT

2) PRIVATE PAYOR HEALTH CARE FRAUD3) THE ANTI-KICKBACK STATUTE4) THE STARK LAW5) THE FALSE CLAIMS ACT6) OFFICE OF INSPECTOR GENERAL WORK

PLAN

33

TRENDS IN GOVERNMENT ENFORCEMENT

Health Care Fraud Enforcement Continues As a Priority and Includes Anything Whistleblowers May Target

Medicare Reform Act-Expansion of Prescription Drug Benefit – New Fraud Opportunities

Corporate Liability and Compliance Quality of Care Stark Law and Anti-Kickback Violations OIG Work Plan 2006

44

HOT TOPICS

Physician Recruitment Medical Directorships Joint Ventures Pharma and Medical Device

Marketing Clinical Research

55

PHYSICIAN RECRUITMENT

Community need (vs. hospital need)Community need (vs. hospital need) Physician relocating practice to hospital Physician relocating practice to hospital

service areaservice area Benefits geared to reasonable financial Benefits geared to reasonable financial

security of physician in startup phasesecurity of physician in startup phase Payout period limited to 3 yearsPayout period limited to 3 years No benefits to existing group practice No benefits to existing group practice

beyond actual incremental additional costs beyond actual incremental additional costs of adding new physicianof adding new physician

No relationship to anticipated referralsNo relationship to anticipated referrals OK to require maintenance of hospital OK to require maintenance of hospital

privilegesprivileges

66

MEDICAL DIRECTORSHIPS

Actual, necessary, non-duplicative services

Fair market value payments Contemporaneous time and effort

documentation No relationship to referrals

77

JOINT VENTURES

Issue: Excessive reward to referral sources?Any relationship of investment opportunity to

referral volumeMinimal investment by referral sourcesTracking/pressure regarding referralsExtraordinary returns on investmentRequired divestments/non-transferability of

investment interests“Shell” structures: contractual joint ventures

88

MARKETING OF PHARMACEUTICALS AND MEDICAL

DEVICES Discounts and remuneration to purchasers

Educational grantsResearch grants“Switching” or conversion payments

Formularies and formulary supportRelations with formulary committee membersFormulary placement payments

Relationships with physiciansConsulting and advisory paymentsBusiness courtesies and giftsEducation/research funding

99

CLINICAL RESEARCH

NIH Guidance on Financial Conflicts of InterestAny relationship between outcome and

compensationResearcher’s proprietary interest in studied

productEquity interest in the sponsorOther significant compensation by sponsorGrants for unnecessary or duplicative researchCost mischarging

1010

Clinical Research Grants

Commercial SourcesPharma and medical deviceConsultant Arrangements with Clinical Trial

Sponsors (Pharma CPG)Recruitment of clinical trial subjects Integrity of reporting of clinical trial informationMedical treatment of clinical trial subjects

Federal GrantsNIH and other

Clinical Investigations time allocation Billing for services covered under a grant

Recent CPG

1111

Hospital Specific Billing Issues

Discharge/TransfersDischarge/Transfers Inpatient DRG CodingInpatient DRG Coding

Suspect Pairings PneumoniaPneumonia SepticimiaSepticimia

Post Acute DRGs (29 existing DRGs) Bill as transfer, not dischargeBill as transfer, not discharge OIG highlights in its semi-annual report OIG highlights in its semi-annual report

($116 million Medicare overpayment in 2 ($116 million Medicare overpayment in 2 year period)year period)

1212

Hospital Specific Billing Issues

Outpatient PPSPass-through costs

Outpatient Cardiac RehabIncident to/direct supervision by

Physician Diagnostic Testing in ERs

Contemporaneous interpretationsMedically necessary?

1313

Hospital Billing/Medical Necessity Issues

Coronary Artery StentsMedically necessaryMultiple procedures70% now drug eluting stents ($ 4,859

extra payment on OPPS)

1414

Hospital and Physicians – Hospital and Physicians – Medical Necessity ConundrumMedical Necessity Conundrum

Physicians decide what is medically necessary

Staff Physicians not employed by hospital Independent Peer Review function Overutilization? Patient Care/Safety United Memorial Hospital/Corporate Liability Redding Hospital/Physician and Corporate

Liability

1515

Physician Billing Issues Billing Issues

E&M coding (perennial target - $ 23 billion in 2001)

Consultations Use of -25 Modifier (E&M service

unrelated to procedure code on same day)

Place of Service coding errors

1616

Physician Billing Issues

Medical Necessity of Diagnostic TestsMedical Necessity of Diagnostic Tests Radiation Therapy Management ServicesRadiation Therapy Management Services

One billable unit for every five sessionsOne billable unit for every five sessions Services and Suppliers “Incident to”Services and Suppliers “Incident to” Training and billing Reviews for physician Training and billing Reviews for physician

practicespracticesEssential in OIG’s viewEssential in OIG’s view

1717

PHARMACEUTICAL FRAUD

Medicaid Rebates – Best Price Violations Price Manipulation (“AWP”/”ASP”) Promotion of Off Label Use Relationships with Health Care

Professionals and Inducements to Prescribe Marketing Schemes Pharmacy Benefit Managers and Switching

Arrangements and Contract Kickbacks Shorting Prescriptions and Drugs Returned

to Stock Secondary Market and Internet Purchases

1818

Quality of Care

Hospital/Physician ServicesCardiac Catheterization ProceduresHospital/Medical Staff Responsibility

Quality of Care in Nursing HomesServices Not Provided“Deficient” Services vs. “Worthless”

Services Physician Services

1919

CORPORATE LIABILITY,COMPLIANCE AND

GOVERNANCE

HIPPA 96” and Corporate Scandals The New Era of Corporate Responsibility Sarbanes-Oxley Act of 2002 United States Sentencing Guideline

Amendments of 2004 Department of Justice Principles of Federal

Prosecution of Business Organizations

2020

SARBANES-OXLEY AND THE SENTINEL EFFECT ON HEALTH CARE

ORGANIZATIONS

Public Companies – Governance and Integrity of Reporting Financial Information

Private Companies – Fiduciary Obligations of Board of Directors and Shareholder Derivative Liability

Not-for-Profit Organizations – Fiduciary Obligations and Attorney General Oversight

Caremark Decision – All Organizations

2121

SENTENCING GUIDELINE AMENDMENTS RAISE THE STAKES FOR BUSINESS

ORGANIZATIONS

Codification of Principles of the Caremark Decision Oversight and Responsibility of the Board of

Directors and High Level Personnel of the Organization

Board Knowledge About the Content and Operation of the Compliance Program to Prevent and Detect Violations of the Law

Board Exercises Reasonable Oversight with Respect to Implementation and Effectiveness of the Compliance Program

Risk Assessment as an Essential Component of Design Implementation of an Effective Compliance Program

Assessment of Likely Compliance Risks Given an Organization’s Business Activities

2222

UNITED STATES SENTENCING GUIDELINE AMENDMENTS AND DEPARTMENT OF JUSTICE PRINCIPLES OF FEDERAL

PROSECUTION OF BUSINESS ORGANIZATIONS“COOPERATION” OR “UNCONDITIONAL SURRENDER”

Voluntary Disclosure and Self-Reporting as Quasi Mandatory Function of Cooperation

Cooperation in Investigating Business Organizations Own Wrongdoing

Effects Charging Decision Against Business Organization

Effects Scope of Liability for Business Organization Effects Sentence under Sentencing Guidelines Business Organization’s Cannot Run the Risk of Failing

to Have an Effective Compliance and Governance Program

Failure to Detect and Prevent Wrongful Conduct will Result in Consequences for Any Business Organization in Current Compliance Environment

2323

Corporate Integrity Agreements

A part of global criminal and/or civil settlement

May represent OIG’s opinion on the organization’s compliance programs

7 significant elements of an effective compliance program, including:Specific training languageFocused audits/reviewsIndependence of Compliance Officer

Annual Reporting Requirements Under CIA

2424

Independence of theCompliance Officer

Dual responsibility of compliance officers are increasingly suspect to the OIG at large organizations

Sufficient commitment of resources Reporting to Board of

Directors/Trustees CCO Subordinate to General Counsel

or CFO Not Favored by OIG

2525

OIG Expectations:Compliance Training

Broad based compliance program Broad based compliance program trainingtraining

Extensive and specific training for risk Extensive and specific training for risk areasareas

Document trainingDocument training Efforts made to train physiciansEfforts made to train physicians Technology training Technology training Essential for effective compliance Essential for effective compliance

programsprograms

2626

Private Payor Fraud

What is Private Payor Insurance Fraud?Fraud against those who pay for private heath insurance coverage

2727

Federal Statutes Prohibiting Private Payor Insurance Fraud

Mail Fraud Wire Fraud Fraud against health care benefit

plans Conspiracy to commit fraud through

false claims and false statements Fraud under the RICO statute

2828

Federal Prosecutions involving Fraud Against Private Persons

Examples US v. Posner, D.C., et. Al (S.D. Fla.)

Mail fraud; 18 U.S.C. § 1341; Wire fraud; 18 U.S.C. §1343; and Conspiracy; 18 U.S.C. § 371 – for submission of claims to private payors for services not rendered, not rendered as claimed and for medically unnecessary services

US v. Individual ChiropractorHealth care fraud; 18 U.S.C. § 1347; Conspiracy; 18 U.S.C. § 371 – for claims for services in accordance with a standard treatment protocol lasting approximately three months regardless of the patient injuries or the medical necessity of the treatment protocol, and for submission of claims for medical, chiropractic and therapeutic services which were not performed during the treatment protocol and/or never occurred

2929

Private Payor Attempts to Limit Fraud and Abuse through State

Legislation

Examples:Examples:Florida legislation regulating activities

under the personal injury protection program – limiting solicitation of patients; imposition of Medical Director responsibilities on personal injury medical clinics

Licensure and registration of clinics and denial of payment for unlicensed or unregistered clinics by private health plans

3030

Examples of Private Payor Positions

in Civil Litigation

Violations of federal or state false claims statutes

Violations of federal or state Anti-Kickback and self-referral laws

Violations of state law governing insurance and provider relationships

Submission of claims which are allegedly medically unnecessary and/or unreasonable

3131

Private Payor Affirmative Litigation Against Providers in

State and Federal Courts Examples:Examples:

State Farm Mutual Automobile Insurance Company v. Universal State Farm Mutual Automobile Insurance Company v. Universal Medical Center of South Florida, Inc.Medical Center of South Florida, Inc. (Dade County, Court of Appeal) (Dade County, Court of Appeal) – Denial of payment because physical therapy performed by medical – Denial of payment because physical therapy performed by medical assistants (not licensed physical therapists) provided under assistants (not licensed physical therapists) provided under physician supervision is prohibited under State law. physician supervision is prohibited under State law.

State Farm Mutual Automobile Insurance Company v. State Farm Mutual Automobile Insurance Company v. Comprehensive Medical Group, Inc., et alComprehensive Medical Group, Inc., et al (N.D. Illinois) – Complaint (N.D. Illinois) – Complaint by insurance company against multiple providers for false and by insurance company against multiple providers for false and fraudulent claims for worthless and unnecessary diagnostic tests fraudulent claims for worthless and unnecessary diagnostic tests rendered to victims of automobile accidents on an a nation-wide rendered to victims of automobile accidents on an a nation-wide scale. scale.

Medically unnecessary diagnostic tests of no clinic valueMedically unnecessary diagnostic tests of no clinic value Misleading diagnostic findingsMisleading diagnostic findings False claims for multiple procedure codesFalse claims for multiple procedure codes Diagnostic studies rendered to maximize profit without regard to Diagnostic studies rendered to maximize profit without regard to

medical necessitymedical necessity Spinal ultra sounds; somotosensory evoke potential; dermatome Spinal ultra sounds; somotosensory evoke potential; dermatome

evoke potentials; and nerve conduction velocity studies, having evoke potentials; and nerve conduction velocity studies, having no clinical value in confirming or excluding the existence of no clinical value in confirming or excluding the existence of nerve root injury or location of neurological dysfunction or nerve root injury or location of neurological dysfunction or inflammation inflammation

Purpose of performing the test is merely for financial gain Purpose of performing the test is merely for financial gain

3232

REVIEW OF PAYMENT & REFERRAL RELATIONSHIPS

UNDERSTATE AND FEDERAL LAW

3333

I. THE ANTI-KICKBACK STATUTE

42 USC § 1320a-7b(b)(2)  

It is unlawful to knowingly and willfully offer or pay any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such person--      (A) to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or      (B) to purchase, lease, order, or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program.

3434

The Anti-Kickback Statute

What It All Means? - Prohibits anyone What It All Means? - Prohibits anyone from purposefully offering, soliciting, from purposefully offering, soliciting, or receiving anything of value to or receiving anything of value to generate referrals for items or generate referrals for items or services payable by any Federal services payable by any Federal health care program.health care program.

42 States and D.C. have enacted 42 States and D.C. have enacted anti-kickback statutesanti-kickback statutes

3535

Purpose of the Law

Prevent the corruption of medical decision-making

Prevent the overutilization of items or services

Prevent unfair competition

3636

Elements

Remuneration Offered, Paid, Solicited, or Received Knowingly & Willfully To Induce or In Exchange for

Federal Program Referrals

3737

Remuneration

Anything of value “In-cash or in-kind” Paid directly or indirectly Examples: cash, free goods or

services, discounts, below market rent, relief of financial obligations

3838

Offered, Paid, Solicited, or Received

Different Perspectives – Payors and Payees

“It Takes Two To Tango” Old Focus: Payors Subject to

Prosecution New Focus: Payees (usually doctors)

3939

To Induce Federal Program Referrals

Any Federal Health Care programAny Federal Health Care program A nexus between payments and A nexus between payments and

referralsreferrals Covers any act that is intended to Covers any act that is intended to

influence and cause referrals to a influence and cause referrals to a Federal Health Care programFederal Health Care program

One purpose testOne purpose test

4040

Knowingly & Willfully

The Anti-Kickback law requires that the individual have a particular “state of mind”, acting with knowledge and purpose when committing the offense

This “Knowingly & Willfully” requirement has been interpreted differently by the various Circuit Courts: 9th Circuit: Must have knowledge of the Anti-Kickback

statute and have specific intent to violate the statute 8th Circuit: Mere knowledge that the conduct was

“wrongful” satisfies the “Knowingly & Willfully” standard 11th Circuit: Must show that one acted with an intent to

“disobey or disregard” the law

4141

Fines and Penalties The Government may elect to proceed:

Criminally: Felony, Imprisonment up to 5 Years & a fine up to $25,000, or both Mandatory exclusion from participating in Federal Health Care programs Brought by the DOJ

Civilly: Violation is based on express or implied certification of compliance with

violations of the Anti-Kickback and Starks statutes Penalties are same as under False Claims Act (more later) Controversial, yet expanding use of the FCA

Administratively: Monetary penalty of $ 50,000 per violation & assessment of up to three

times the remuneration involved Discretionary exclusion from participating in Federal Health Care

programs Brought by the OIG

4242

Exceptions and Safe Harbors

Many harmless business arrangements may be subject to the Statute

Approximately 24 Exceptions (“Safe-Harbors”) have been created by the OIG

Compliance is Voluntary Must meet all conditions to qualify for

Safe Harbor protection Is substantial compliance enough?

4343

Statutory Exceptions

The 5 exceptions that have been enacted by Congress:1)Discounts and other price reductions2)Payments to employees3)An amount paid by a vendor of goods or

services to a group purchasing agent4)Waiver of Part B co-payments by

Federally qualified health centers5)“Shared Risk” exception

4444

Regulatory Safe Harbors

Investments in large entities Investments in small entities Investments in small entities in

underserved areas Investments in group practices Investments in ambulatory surgical

centers (ASCs)

4545

Additional Safe Harbors

Space and Rental Equipment

Personal Services and management contracts

Employees Discounts Managed Care Managed Care

“shared risk” arrangements

Practitioner recruiting in underserved areas

Ambulance restocking

Sale of practice Referral services Warranties Group purchasing

organizations Routine waiver of co-

payments and deductibles Subsidies for obstetrical

malpractice insurance in underserved areas

Cooperative Hospital Services Organizations

Specialty referral arrangements between providers

4646

Guidance on the Anti-Kickback Statute

Advisory Opinions from the OIGA party may request advice on the law,

concerning 1) remuneration within the meaning of the law, 2) whether they are meeting one of the law’s exceptions or safe harbors, or whether their arrangement warrants the imposition of a sanction

Recent Advisory Opinions on Gainsharing arrangements

Fraud Alerts and Special Advisory Bulletins Preamble to the Safe Harbor Regulations Compliance Program Guidance's www.oig.hhs.gov

4747

The Stark Law

Section 1877 of the Social Security Act, 42 U.S.C 1395nn

The law is complicated and consists of the original statute (Stark I) and the amended provisions (Stark II)

Most Stark II regulations went into effect in 2002, but some are still pending

4848

The Stark Law

A Prohibition on Physician Self-ReferralsIf a physician (or immediate family

member) has a direct or indirect financial relationship (ownership or compensation) with an entity that provides designated health services (“DHS”), the physician cannot refer the patient to the entity for DHS and the entity cannot submit a claim for the DHS, unless the financial relationship fits in an exception

4949

Penalties

Nonpayment of claims Civil Money Penalties of $ 15,000 for each service rendered plus an Assessment of three times the amount claimed Penalty of up to $100,000 for “Circumvention Scheme” Don’t Forget FCA Liability

5050

Difference Between Anti-Kickback Statute and The

Stark Law

Physician Referrals only No “Knowingly and Willfully

Standard” – Strict Liability Involves Designated Health

Services (DHS)

5151

Types of Designated Health Care Service (DHS)

Clinical laboratory Physical therapy Occupational therapy Radiology and Imaging Services (MRI, CAT scan,

ultrasound) Radiation therapy & supplies Durable medical equipment and supplies Parenteral and enteral nutrients, equipment and

supplied Prosthetics, orthotics, and prosthetic devices and

supplies Home health services Outpatient prescription drugs Inpatient and outpatient hospital services

5252

What is a Financial Relationship

Nearly any type of investment or compensation agreement between the referring physician and the DHS entity will qualify as a financial arrangement under the Stark lawExamples: Stock Ownership Partnership Interest Rental Contract Personal Service Contract Salary

Compensation agreements can be Direct or Indirect Exceptions for certain indirect compensation

arrangements

5353

Exceptions Compliance Is Mandatory Types of Exceptions:

In-office ancillary services Personal Physician Services by Member of Group

Practice Pre-Paid Health Plan Certain Publicly Traded Securities Rural provider (investment interests) Hospital Ownership (must be in the “whole” hospital) Rental of Office Space and Equipment Bona Fide Employment Personal Services Arrangement Physician Recruitment Fair Market Value Payment by Physicians

5454

Additional ExceptionsAdded in January 2002

Fair Market Value compensation arrangements

Academic medical center arrangements

Implants provided in an ASC (Implants are DHS, but are not included in the bundled Medicare ASC payment)

EPO and other dialysis-related drugs furnished in or by an ESRD facility

Preventing screening tests, immunizations, and vaccines

Eyeglasses and contact lenses following cataract surgery

Non-monetary compensation up to $300

Medical staff incidental benefits provided by a hospital

Risk sharing arrangements Compliance training Indirect compensation

arrangements

5555

The False Claims Act

31 U.S.C. § 3729, the False Claims Act (“FCA”) sets forth seven bases for liability. The most common ones are:

1. Knowingly presenting, or causing to be presented, to the Government a false or fraudulent claim for payment

2. Knowingly making, using, or causing to be made or used, a false record or statement to get a false or fraudulent claim paid

3. Conspiring to defraud the Government by getting a false or fraudulent claim allowed or paid

4. Knowingly making, using, or causing to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Government

5656

Elements of an FCA Offense

The Defendant must:Submit a claim (or cause a claim to be

submitted)To the GovernmentThat is false or fraudulentKnowing of its falsitySeeking payment from the federal

treasuryDamages (Maybe)

5757

Knowing & Knowingly

No proof or specific intent to defraud is required

The Government need only show Person:Had “actual knowledge of the information”;

orPerson acted in “deliberate ignorance” of

the truth or falsity of the information; orPerson acted in “reckless disregard” of the

truth or falsity of the information

5858

Penalties

1. Civil penalty of no less than $5,500 and no more than $ 11,000 per false claim

2. Three times the amount of damages which the Government sustained

5959

DEPARTMENT OF JUSTICEINVESTIGATIVE GUIDELINES

Were false claims submitted by a provider with knowledge of their falsity? Was there actual or constructive notice of the rule or

policy on which a potential case would be based? Was the rule or policy clear? Does the size of the false claim support inference of

knowledge or inference of mistake? What plans did the provider make to adhere to the

rules? Are there any past remedial efforts? Did the provider receive guidance by program agents on

the issue? Have there been previous audits to the provider of same

or similar billing errors?

6060

Qui Tam Actions & Government Intervention

A private person (“Relator”) may bring a False Claim Act actions under the qui tam provisions of the FCA – The Whistleblower

Government may intervene in a suit brought by Relator

The relationship between Relator and Government

6161

FCA Statistics

If the government intervenes and obtains recovery, the Relator receives between 15% and 25% of the proceeds

Since 1986, of all of the qui tam actions filed, the average yearly intervention rate has been about 25% (approximately 300-400 cases)

About $1.5 billion of the $1.7 billion in health care FCA recoveries in FY’ 03 were from whistleblowers

Recoveries Have Increased (higher penalties and publicity)

Whistleblower protection is provided to those that take lawful actions in furtherance of the qui tam suit, including investigation, initiation, testimony for, or assistance in the action

6262

Role of the OIG in FCA Cases

May assist in the InvestigationSettles as client agency on behalf of

HHSPermissive exclusion authorityMay waive exclusion authority in

exchange for Corporate Integrity Agreement

- Monitoring and Annual Reports

- Successor Liability

6363

Types of FCA Cases

Unbundling (billing single service as if one service) Services not rendered Billing for items or services that are not covered Upcoding Duplicate billing Submitting false or inflated cost reports Quality of Care (“standard of care claims” or “worthless

claims”) Research Grant and Clinical Trial Fraud Actions under the Food, Drug & Cosmetic Act

misbranding & adulteration of drugs and promotion of off label use

False Claims Act cases based on violations of the Stark Law and/or the Anti-Kickback Statute (“Tainted Claims”)

6464

OFFICE OF INSPECTOR GENERAL WORK PLAN

2006

6565

OIG Work Plan

Articulates areas of high compliance risk

Priorities for enforcement activity

Identify Federal Health Program vulnerabilities

Road map for compliance program effectiveness and auditing and monitoring agenda for health care organizations

Work plan assists in identification and focus for compliance efforts for health care organizations.

6666

Medicare Hospitals – Areas of Focus for OIG Work Plan 2006

Adjustments for Graduate Medical Education Payments Payments for Observation Services versus Inpatient Admissions for Dialysis

Services Medical Education Payments for Dental and Podiatry Residents Nursing and Allied Health Education Payments Inpatient Prospective Payment System Wage Indices Inpatient Rehabilitation Facilities Payments Inpatient Hospital Payments for New Technologies Inpatient Psychiatric Hospitals Inpatient Rehabilitation Payments – Late Assessments Long Term Care Hospital Payments Critical Access Hospitals Organ Acquisition Costs Rebates Paid to Hospitals Coronary Artery Stents Outpatient Outlier and Other Charge-Related Issues Outpatient Department Payments Unbundling of Hospital Outpatient Services “Inpatient Only” Services Performed in an Outpatient Setting Diagnosis-Related Group Coding Hospital Reporting of Restraint-Related Deaths

6767

Medicare Hospitals – Area of Focus

Added to OIG Work Plan 2006 Adjustments for Graduate Medical Education PaymentsAdjustments for Graduate Medical Education Payments

Payments for Observation Services versus Inpatient Admissions for Dialysis Payments for Observation Services versus Inpatient Admissions for Dialysis ServicesServices

Inpatient Hospital Payments for New TechnologiesInpatient Hospital Payments for New Technologies

Inpatient Psychiatric HospitalsInpatient Psychiatric Hospitals

Outpatient Department PaymentsOutpatient Department Payments

Unbundling of Hospital Outpatient ServicesUnbundling of Hospital Outpatient Services

““Inpatient Only” Services Performed in an Outpatient SettingInpatient Only” Services Performed in an Outpatient Setting

6868

Medicare Hospitals – Areas of Focus

Continued from OIG Work Plan 2005

Medical Education Payments for Dental and Podiatry Residents

Nursing and Allied Health Education Payments Inpatient Prospective Payment System Wage Indices Inpatient Rehabilitation Facilities Payments Long Term Care Hospital Payments Critical Access Hospitals Organ Acquisition Costs Rebates Paid to Hospitals Coronary Artery Stents Outpatient Outlier and Other Charge-Related Issues Diagnosis-Related Group Coding Hospital Reporting of Restraint-Related Deaths

6969

Deleted From OIG Work Plan 2005 and Not Included in OIG Work Plan

2006 Quality of Improvement Organization Mediation of Beneficiary

Complaints

Graduate Medical Education Voluntary Supervision in Non-hospital Settings

Postacute Care Transfers

Inpatient Outlier and Other Charge-Related Issues

Consecutive Inpatient Stays

Level of Care in Long-Term Care Hospitals

Outpatient Cardiac Rehabilitation Services

Lifetime Reserve Days

7070

NEW FOCUS AREA FOR HOSPITALSIN 2006 WORK PLAN

Only seven (7) focus areas in OIG Work Plan 2006 are areas not previously identified in prior work plans. The most important areas of focus, from a liability perspective, are as follows: Payments for observation services versus inpatient admissions

for dialysis services Payment for interrupted stays and outlier payments at

inpatient psychiatric hospitals Payments for hospital outpatient departments for multiple

procedures, repeat procedures and global services Unbundling of hospital outpatient procedures

The most important recurring areas of focus in 2006 OIG Work Plan are as follows: Outlier payments to hospital outpatient departments Hospital reporting of restraint related deaths Medicaid diagnosis related group payment for hospital services

within three days of admission.

7171

RISK AREAS FOR PHYSICIANSNEW FOCUS AREAS IN OIG WORK PLAN

20061. Duplicate physical therapy claims

2. Payment to physicians for initial preventative physical examinations pursuant to coverage under the Medicare Modernization Act

Recurring Focus Areas

1. Propriety of contractual relationships between physicians and billing companies

2. Payments to physicians employed at VA hospitals

3. Physician hospice care plan oversight

4. Excluded physicians ordering or performing services

5. In office pathology services

6. Cardiography professional and technical component billing

7. Authorization, medical necessity and physician certification for physical and occupational therapy services

8. Medical necessity of physician office mental health services

9. Medical necessity of wound care services and claims by physicians.

7272

OTHER AREAS OFPHYSICIAN CONCERN

1. Medical necessity for coronary artery stents

2. Medical necessity of rehabilitation and infusion therapy services in nursing home

3. Medical necessity and excessive billing of imaging and laboratory services in nursing homes

4. Medical necessity and receipt of DME

5. Reimbursement for Medicare drug benefit

6. Focus on physician services in Independent Diagnostic Testing Facilities (“IDTF’s”) regarding appropriate supervision and licensure of personnel performing tests

7. Medical necessity of CORF services

8. Inappropriate payments and utilization of covered preventative care services

9. Physician prescribing of drugs, such as Oxycontin

7373

Office of Inspector GeneralOffice of Investigations (“OI”)

OI Conducts Investigations of Fraud and Misconduct and Health Care Fraud

Identifies Systematic Weaknesses in Vulnerable Program Areas and Recommends Management, Regulatory and Legislative Corrective Action

Provides Investigative Assistance in Criminal and Civil False Claims, Civil Money Penalty and Exclusion Cases

Responds to Thousands of Complaints of Health Care Fraud from Various Sources, including “Whistleblowers”

Provider Self-Disclosure Program

False Claims and Anti-Kickback Violations

7474

Office of Inspector GeneralOffice of Legal Counsel

(“OCIG”)

Resolution of Civil False Claims Act cases and negotiation of Corporate Integrity Agreements (“CIA”)

Providers compliance with Corporate Integrity Agreements

Industry Guidance: Advisory Opinions and Fraud Alerts

Development of regulations, including safe harbors to the Anti-Kickback Statute

Enforcement of the Civil Money Penalty and Exclusion Statutes

Enforcement of the Patient Anti-Dumping Statute

7575

HOSPICE

7676

Hospice Providers

Hospice providers meet quality of care standardsProvider oversight activities and quality

of careEvaluate arrangements between

Hospice and nursing homes

7777

Excluded Providers

Evaluating the extent to which Medicare is billed for Part B services ordered by providers excluded from the Medicare program

Part of physician section, but effects Medicare Part B ServicesHome HealthDMEOutpatient radiologyLaboratories

7878

DRG Coding

Analysis of “aberrant” coding patterns

7979

Home Health

8080

Outlier Payments Long term high intensity cases where episode Long term high intensity cases where episode

of care costs exceed threshold amount.of care costs exceed threshold amount. Evaluate the frequency of outliersEvaluate the frequency of outliers

AnalysisAnalysis

Payment is based on CMI and historical Payment is based on CMI and historical average number of visits for a given diagnosisaverage number of visits for a given diagnosis

Rural areas tend to have higher number of Rural areas tend to have higher number of visits per episode than urbanvisits per episode than urban

8181

Enhanced Payment Evaluate payment to HHA for therapy services

Number and duration of therapy services

Analysis Following certain orthopedic procedures patients

are required to go home with therapy services rather than be directly admitted to rehabilitation hospital

Places HHAs between rock and hard place Accurate coding of diagnoses for patients being

treated by HHA Completion of OASIS forms

8282

Other HHA Topics

Survey certifications regarding quality of carePerformed by the StateFollow-up on deficiencies in the

nature of “cyclical non-compliance”

8383

Skilled Nursing Facilities

8484

Rehab and Infusion Therapy

Analysis of whether rehab and infusion therapy services were: Medically necessary Adequately supported in documentation Actually provided

Analysis Analyze MDs assessment data Diagnosis coding Facility Professional

Professional billings

8585

Imaging and Laboratory Services

Evaluate the medical necessity and Evaluate the medical necessity and excessive billing for imaging and laboratory excessive billing for imaging and laboratory services provided to nursing home residentsservices provided to nursing home residents

Evaluate a sample of services and examine Evaluate a sample of services and examine utilization patternsutilization patterns

Data AnalysisData Analysis Diagnosis coding on claimsDiagnosis coding on claims MDs dataMDs data Quality of CareQuality of Care

8686

Other Topics

Consolidated billing Payments for Day of Discharge Consecutive Inpatient Stays Deficiency Trends

Quality of CareQuality of Care Enforcement Action Against Noncompliant Enforcement Action Against Noncompliant

Nursing HomesNursing Homes Compliance with Complaint InvestigationsCompliance with Complaint Investigations

Immediate jeopardyImmediate jeopardy Actual harmActual harm

8787

Medical Equipment & Supplies

8888

DME for Home Health

Medical necessity of durable medical equipment and supplies

Analysis OASIS data Post orthopedic surgery cases receiving therapy? Relationship between HHA and DME Company

8989

DME Other Topics

Medical Necessity Therapeutic Footware

Pricing of equipment and supplies Home Glucose Testing Supplies

Test strips Lancets

Analysis Utilization of test strips Based on type of diabetes

Diagnosis coding– Insulin dependent– Non-insulin dependent

9090

Other Topics

Laboratory services during inpatient staysLaboratory services during inpatient stays Part B radiology services provided to Part B radiology services provided to

inpatientsinpatients Separately billable lab services under ESRDSeparately billable lab services under ESRD Lab proficiency testingLab proficiency testing Quality of care in dialysis facilitiesQuality of care in dialysis facilities Ambulance servicesAmbulance services

GroundGround Hospital inpatientsHospital inpatients

9191

THE END